Stopping or pausing as a freelancer: what to arrange fiscally?
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
If you stop for good you settle up over the cessation profit and may deduct the one-off cessation deduction of 3,630 euros; pausing does not trigger that settlement.
- You may apply the cessation deduction only once in your lifetime.
- Assets you keep privately are taken at market value, sometimes with VAT due.
- You keep your records for another seven years after stopping, and ten for immovable property.
- As long as your VAT number is active you file every period, even at zero.
Sometimes you decide to stop your business, or pause it temporarily. In both cases there are fiscal matters to arrange, otherwise you keep obligations you no longer want. This article covers what to arrange step by step when stopping, what cessation profit costs you, and when pausing beats deregistering.
Stopping or pausing: what is the difference?
Stopping is final: you deregister, settle up for tax and you are done. Pausing means you stay registered but generate little or no turnover. That difference matters, because only when stopping do you settle up over the hidden reserves in your business.
| Stopping | Pausing | |
|---|---|---|
| Chamber of Commerce registration | Deregister | Stays active |
| VAT return | Final return, then done | Continues, even at zero |
| Cessation profit | Yes, you settle up | No |
| Self-employed deduction | Ends | Only at 1,225 hours |
| Record retention | Another seven years | Continues |
What do you arrange when stopping?
If you stop permanently, you deregister with the Chamber of Commerce, which passes this on to the tax authorities. Then comes the fiscal settlement. Work through these steps and nothing gets left behind.
- Deregister with the Chamber of Commerce as of the date you actually stop, not retroactively.
- File your final VAT return for the period in which you stop and reclaim any outstanding input VAT.
- Take business assets you keep privately at market value. You settle up over the difference with the book value, and sometimes VAT too.
- Send outstanding invoices and chase them; collecting after deregistration is much harder. See client does not pay.
- Cancel subscriptions, insurance and your business account, but only after the last payments have come in.
- In the following year, file the closing income tax return, including the cessation profit.
- Keep your records for another seven years. The retention obligation does not end when your business does.
Cessation profit and the cessation deduction
Ending your business often creates cessation profit, also when you sell your sole proprietorship instead of closing it: the difference between the real value of what is in your business and the book value in your records. A van carried at 3,000 euros but worth 8,000 yields 5,000 euros of cessation profit. An old retirement reserve is also released at that moment.
Against that stands the cessation deduction: a maximum of 3,630 euros in 2026, and you may use it only once in your lifetime. If you later stop another business, it is gone.
Worked example: stopping with a van and some tools
- Market value of business assets
- € 12,000
- Book value in the records
- € 4,000
- Cessation profit
- € 8,000
- Less: cessation deduction 2026
- € 3,630
Result: € 4,370 counts as profit in your closing return. You pay box 1 income tax on it, on top of your regular profit that year
Pausing: what does it mean for tax?
If you want to stop temporarily, for example due to personal circumstances or a job on the side, you need not deregister. You stay registered and put your business on a low flame. Less changes for tax than people think, but three points do matter.
Your VAT return continues
As long as your VAT number is active you must file every period, even when the amount is zero. Forget it and you get a penalty for something you did not even earn. If you expect no turnover for a long time, ask the tax authorities for a different filing period or to deactivate your VAT number.
You probably will not meet the hours criterion
If you do not reach 1,225 hours, the self-employed deduction lapses for that year. See self-employed deduction and the hours criterion. That is less dramatic than it used to be, since the deduction is 1,200 euros in 2026 and keeps declining, but count on it.
Costs remain deductible, but watch the balance
Ongoing business costs stay deductible as long as your business exists. If you run barely any turnover for years while booking costs, the tax authorities may at some point argue there is no source of income any more. The deduction then lapses retroactively. A one-year pause is no problem; lying idle for five years is.
Frequently asked questions
Must I deregister if I am inactive for a while?
No. You may stay registered and put your business on a low flame. Deregistering is final and triggers settlement over your hidden reserves, so only do it if you really stop.
How much is the cessation deduction in 2026?
A maximum of 3,630 euros, and never more than your cessation profit. You may use it once in your lifetime, so it is no longer available for a second business you cease later.
Do I pay VAT on items I keep privately?
Often yes. If you reclaimed VAT on purchase and keep the asset privately, you pay VAT on its value at that moment. For fully depreciated items of little value that is usually negligible.
Must I keep filing VAT returns without turnover?
Yes, as long as your VAT number is active. A nil return takes two minutes, but forgetting costs a penalty. If you expect nothing for a long time, ask to have your VAT number deactivated.
How long must I keep records after stopping?
Seven years, counted from the end of the year in which you stopped. For data on immovable property it is ten. Deregistering changes nothing about that. So arrange an export beforehand; see backing up and exporting your bookkeeping and, for your income afterwards, no unemployment benefit as a freelancer.
When is the best moment to stop?
It depends on your profit in the current year. Cessation profit comes on top of your regular income, so stopping in a year when you already earned a lot can push you into the top bracket. Have both years calculated before picking a date.
Sources
- Cessation deduction 2026Belastingdienst · belastingdienst.nl
- Keeping records: 7 and 10 yearsBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
