Top year-end strategies to reduce your tax burden

As the year wraps up, it’s the ideal time to make some last-minute, yet smart financial moves that reduce your tax burden. From investing in equipment and professional growth, to maximising deductions on mixed costs. Below are 10 strategies that can save you money without unnecessary spending. Let’s go!

1. Invest in your retirement plan

Contributing to your pension is a powerful way to lower your tax bill while securing your future. If you’re self-employed, the VSPSS (Voluntary Supplementary Pension for the Self-Employed) allows you to contribute 8.17% of your net taxable income, up to a maximum of €3,965.77 for 2024. In Dutch, this is known as VAPZ, and in French, it’s called PLCI.

For the social VSPSS/VAPZ/PLCI, the contribution limit is 9.40% of net taxable income, with a maximum of €4,562.82 for 2024.

The great news is that it’s not too late to make a contribution for this year—just ensure your total contributions for 2024 reach your pension provider’s account by December 30th.

These contributions are fully tax-deductible, offering substantial savings. As your net taxable income decreases, you’ll also pay lower social security contributions, making this an effective strategy to reduce your tax burden.

💡Read more about the VSPSS

2. Client gifts

Gifts for your clients or people you work with, are a great way to optimise your taxes before the year ends. Here’s how they work:

• Gifts valued at less than €250 are 50% tax-deductible.
• Gifts exceeding €250 are 100% deductible, but your client will be taxed on the gift (VAA/ATN).
• Gifts given abroad, such as during a business trip, are 100% tax-deductible, regardless of the gift’s value.

If the gift costs less than €50, you can also recover the VAT. However, you can only claim VAT on one gift per client, per year. For gifts over €50, the VAT can’t be recovered, but the total amount (including VAT) is still tax-deductible.

Example:

Have you thought about giving your client a sparkling bottle of champagne? Here’s how it works:

• Price of bottle (incl. VAT): €48
• 21% VAT: €8.33 (100% deductible)
• Price without VAT: €39.67
• 50% of €39.67 = €19.84 deductible from your taxes

Keep in mind that the VAT is usually non-deductible on alcohol, but exceptions apply to champagne, sparkling wine, and beer.

💡Read more in detail about client gifts here

3. Give your tech accessories an upgrade

Another effective way to reduce your 2024 tax burden is by upgrading your tech accessories or investing in a new gadget that enhances your work setup. Consider items like:

• Second computer screen
• Headphones or headset
• Phone
• Laptop
• Tablet
• Keyboard and mouse
• VR glasses

Keep in mind that most tech accessories are treated as investments, meaning their cost must be spread out over multiple years. For tech items, a typical amortisation period is 3 years, allowing you to deduct 33% per year.

Example:

Let’s say you’re a software developer and need VR glasses to test something.

• Cost of VR glasses (incl. VAT): €330
• VAT: €57.27 (100% deductible this year)
• Price without VAT: €272.73
• Amortization over 3 years: €90.91/year

Now imagine that your average tax rate in 2024 is around 35%, then you save €31.82 in taxes + €57.27 in VAT recovery.

So, by purchasing this item before the end of the year, you could reduce your tax bill by €89.

4. Consider taking out professional insurances

Now is a great time to consider professional insurance to protect both your business and personal finances, and to make your first contribution before the year ends. Here are some options to consider:

• Guaranteed income insurance: This coverage protects you in case of income loss. It provides an additional benefit, helping you stay financially stable if you’re unable to work due to illness or injury.
  
• VAPZ/PCLI: While paying your social contributions is important, it may not be enough to ensure a comfortable retirement. The Voluntary Supplementary Pension Scheme for the Self-Employed (VSPSS/PCLI/VAPZ) offers a tax-efficient way to supplement your savings.
  
• Civil liability insurance (CLI): As an entrepreneur, personal liability insurance won’t cover you in the event of business-related accidents. Civil liability insurance steps in to protect you.

These professional insurance premiums are 100% tax-deductible, making them an effective and beneficial way to reduce your tax burden.

💡Read more about professional insurances

5. Marketing and branded merchandise

Investing in marketing assets such as branded merchandise is a smart move. Consider items like:

• Hoodies, sweatshirts, or T-shirts with your logo (a branded hoodie will not only promote your business but also keep you warm and cosy during the Christmas holidays!)
• Business cards
• A professional website

These marketing expenses are 100% tax-deductible, making them an excellent way to lower your taxes while boosting your business visibility.

6. Company car

If you’re considering buying or leasing a company car, it’s better to act sooner rather than later, as tax deductibility is expected to decrease in the coming years.

• Electric cars: 100% deductible until January 1, 2027.
• Hybrid and fuel-powered cars: Deductibility can be up to 100% until the end of this year. Starting in 2025, the maximum deductibility will decrease to 75%.

💡More information on car deductibility for self-employed in Belgium

7. Courses and training

If you want to reduce your 2024 tax burden, you can consider investing in your personal and professional growth. It’s possible to deduct the cost of training that improves your professional skills in 2024, even if you pay for it now but attend in 2025.

This includes technical courses, industry conferences, personal development, leadership training, and more, as long as it helps you maintain or increase your income.

💡Read more about deducting training expenses

8. Book your next business trip

Planning a business trip at the start of the new year? Booking and expensing the trip now can help optimise your 2024 taxes.

As a self-employed in Belgium, you can deduct travel expenses for business purposes, including attending meetings, conferences, or client visits. Deductible expenses include:

• Train & plane tickets
• Local transportation (e.g., train or bus tickets, mileage if using your own vehicle)
• Accommodation
• Meals
• Conference or training fees

To qualify for deductions, the trip must be business-related. Only days spent working are deductible—weekend activities or accommodation are considered personal expenses.

The deduction process differs depending on your business structure:

• Company directors can deduct a “per diem” (lump sum for meals and expenses), which varies by country.
• Natural persons can only deduct actual travel costs, so keep all receipts and invoices. Per diems do not apply in Belgium.

💡More about business trip deductions

9. Holiday team events

Planning your work Christmas party? Here’s some good news: holiday event expenses can be deductible.

If you’re hosting a party or event for your team or clients, the costs of food, drinks, and decorations are deductible—provided it’s for business purposes. You can deduct up to 100% of the expenses if:

• The event is held only once a year
• It’s for all staff members
• The cost per staff member is reasonable

So, whether it’s a holiday celebration or a thank-you party, you can reduce your tax burden while spreading some festive cheer!

10. Home office furniture

Or perhaps you’re a freelancer without a team, so you’ll be missing out on the Christmas party. In that case, you’ve likely spent a lot of time working from home recently.

Why not make your workspace more comfortable and productive? With the year drawing to a close, now’s the perfect time to upgrade your home office.

The good news is that home office furniture—like ergonomic chairs, a second screen, a client waiting sofa, or even office plants—is 100% tax-deductible.

So, if you’ve invested in improving your workspace, those expenses can help lower your tax bill, as long as they’re used for business purposes.

Don’t forget mixed costs and subscriptions

We hope the ideas above have inspired you, but don’t overlook smaller expenses like mixed costs, such as your electricity or water bill, software subscriptions, and even the coffee in your home office (as long as it’s shared with clients). When added up, these smaller costs can make a big difference in your tax deductions.

The best way to lower your tax bill is by maximising your deductions. For over 101 deductible expenses, be sure to check out deductibles.com for more tips!

We wish you a wonderful end to the year and a successful start to the next! ✨