Paying Private Individuals in the Netherlands (2026): Proof, VAT, UBD, and Payroll Risk

When can a Dutch freelancer pay a private individual and deduct it as a business cost?

Yes. A Dutch freelancer can pay a private individual for a one-off service (for example, translation, photography, or small repairs) and deduct the payment as a business cost if the cost is directly connected to the business and reasonable in amount. Pure business costs are typically 100% deductible from profit; mixed costs are deductible only for the business share.

Browse the [Knowledge Hub](/knowledge-hub) for more freelancer accounting guides. Treat the payment as a normal expense in the profit-and-loss statement, using the payment date and a clear description of what was delivered. Keep evidence (receipt, contract, emails) in the administration for 7 years, because the Belastingdienst must be able to audit the records. For other common expense rules, see the guide to [deductible expenses for freelancers](/knowledge-hub/deductible-expenses-freelancers-netherlands).

Use 2 quick checks before booking the cost: (1) the service was needed for business activities, and (2) the price is in a reasonable relationship to the business benefit. The Belastingdienst usually does not second-guess business policy, but can question expenses if amounts are disproportionately high compared with the business interest. If the private individual later issues a proper invoice, replace the receipt with that invoice in the records.

What proof do you need if the private individual cannot issue an invoice?

You can still record the expense, but you need proof. If the private individual cannot issue an invoice, create a simple receipt (kwitantie) and store it in your administration. The receipt should show who was paid, what was delivered, when the payment happened, and the exact amount in euros. Keep the receipt in its original form for 7 years (10 years for invoices about real estate).

A receipt is strongest when it links the payment to a specific business purpose and matches your bank transfer. If you paid cash, write “cash” and keep a dated signed receipt. You may scan paper receipts and keep them digitally if the scan is a complete and accurate copy of the original. Store the file so it can be shown within a reasonable time during an audit.

• Payment date (DD-MM-YYYY) and, if different, the service period (for example, 01-03-2026 to 15-03-2026).
• Full name and address of the private individual who received the money.
• Your business name (and address) as payer.
• Description of the service or item delivered, with a measurable unit (for example, 3 hours of editing or 1 repaired bike).
• Gross amount paid in EUR and a note such as “VAT: €0 (private individual, no VAT invoice)”.
• Payment method and reference (bank transfer with IBAN or “cash”), plus any contract/order number.
• Signature of the private individual and the date of signing.

Can you reclaim VAT (BTW) on payments to private individuals?

Usually no. You can reclaim VAT (BTW) only when you receive a VAT invoice that meets the invoice requirements and shows VAT (for example 21% or 9%). If a private individual is not VAT-registered, the document typically shows €0 VAT, so the VAT reclaim is 0. In that case, treat the full gross amount as the cost for income tax profit calculations.

In a Dutch VAT return (BTW-aangifte), input VAT can be deducted only if the purchase is used for taxable turnover (21%, 9% or 0%) and you have a compliant VAT invoice. A receipt from a private individual without VAT is not a VAT invoice, so nothing goes into input VAT boxes. For step-by-step filing, see the [VAT returns guide](/knowledge-hub/vat-returns-netherlands-expat-freelancer-guide).

When do you have to report the payment as UBD (Uitbetaalde bedragen aan derden), and by which deadline?

If you are required to file payroll tax returns (you are an “inhoudingsplichtige uitbetaler”), you must report certain payments to non-employees as UBD (uitbetaalde bedragen aan derden). UBD generally applies from €1 and includes payments where no VAT was charged (for example €0 VAT, 0% VAT, or “VAT shifted”). You must submit the information before 1 February after the calendar year of payment.

UBD is separate from bookkeeping: it is an annual information report to the Belastingdienst about who received what. For payments made in 2026, the UBD deadline is before 1 February 2027, and the payment date decides the year. As a payroll-filing business, you are required to submit UBD without waiting for an invitation; non-payroll businesses are required only if invited.

Collect the data at payment time so you do not chase it in January. The required fields include the total amount paid per person, the payment date(s), and personal details such as name, address and date of birth. Payroll-filing businesses must also report the recipient’s BSN and should verify the BSN belongs to the recipient.

When does paying a private individual turn into payroll (loonheffingen) risk?

Payroll risk starts when the relationship looks like employment (loondienst). Loondienst has 3 core characteristics: the possibility of employer authority (gezag), the obligation to perform personal work, and payment for the work. If these elements are present in practice, the payer can become an employer and may need to withhold and pay payroll taxes (loonheffingen) instead of treating the payment as a simple expense.

Authority is often the decisive factor. If the payer can determine how, when, where, or with whom the work must be done, that is a strong indication of authority. The Belastingdienst treats one or more “yes” answers to authority-style questions as a strong signal. In unclear situations, use the government webmodule to assess the relationship based on facts and circumstances.

• Can the payer determine how the private individual performs the work (methods, tools, protocols)? If “yes”, that indicates authority.
• Can the payer set fixed working times or require a minimum number of hours (for example, 16 hours or 2 days per week)? If “yes”, that indicates authority.
• Can the payer decide where the work must be performed (for example, always at the payer’s location)? If “yes”, that indicates authority.
• Is the private individual required to do the work personally (no substitution) and integrated into the payer’s organisation? If “yes”, payroll risk increases.
• Does the private individual do the same work as employees and can the payer give the same instructions? If “yes”, payroll risk increases.
• Does the work fit a “fictitious employment” category (for example, a ‘gelijkgestelde’ working 2+ days per week and earning at least 2/5 of minimum wage)? If “yes”, payroll rules may apply.

What about volunteers, small allowances, and reimbursements in 2026?

Volunteer payments can be tax-free only within strict 2026 limits. In 2026, the maximum volunteer allowance is €220 per month and €2,200 per year. If the volunteer is paid per hour, the Belastingdienst treats €5.75/hour (age 21+) or €3.40/hour (under 21) as the maximum for a “non-market” rate. Above the limits, the organisation usually has to withhold tax.

Volunteer rules matter when a freelancer pays someone for help at an event, in a club, or for community work. The monthly (€220) and yearly (€2,200) caps apply to the total: allowance for time plus any reimbursements, unless the reimbursement is exactly equal to proven costs. If the total goes over the cap, the payment is no longer treated as a volunteer allowance.

Reimbursements of actual costs can still be possible without tax when the reimbursement equals the cost and you keep evidence (for example, train tickets or receipts). Track the amounts per month so you do not cross the €220 cap unintentionally. If the work is commercial and paid at market rates, treat the person as a contractor or employee instead of a volunteer.