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Written by:
Bas Hollenberg


Activities in aid of general partnership fail to qualify as “predominantly ancillary”

Entrepreneurs are entitled to tax relief for the self-employed on condition that they should pass the hours criterion, according to which they should annually devote at least 1,225 hours and over 50% of their time to their business. No allowances are made for the time devoted by the entrepreneur to so-called ancillary duties performed at the level of a joint venture involving an affiliate where it is not customary for non-affiliated persons to conclude the relevant kind of joint venture between them.

A married couple operated a car sale and repair business under the format of a general partnership, the husband having originally launched the business as a sole tradership. The wife was entitled to 40% of the profit, against 60% for the husband. According to the Tax and Customs Administration virtually all duties performed by the wife were of an ancillary nature whereas the joint venture format between the spouses was not customary. The wife, it was argued by the taxman, was not entitled to tax relief for the self-employed as she was failing the hours criterion .


The District Court went with the wife’s assertion to the effect that it was she who was taking care of virtually all regular duties at the level of the business. Having suffered burnout, her husband had subsequently been unable professionally to return to his original level of performance, leaving his wife no choice but to take over the following duties:

  • managing the entire business,
  • planning and organising the workshop,
  • making personnel policy decisions,
  • making investment decisions,
  • maintaining contact with suppliers,
  • heading up the team of mechanics,
  • preparing quotes and liaising with customers concerning additional maintenance and/or repairs to their vehicles,
  • selling and trading in vehicles.

According to the Court a further consideration worthy of note was that during the time the husband had been occupationally disabled it had been the wife who had carried on the business all by herself, without any assistance, for a period of over six months. There was no question, the Court ruled, of the wife’s duties being of a “predominantly ancillary” nature. Having passed the hours criterion, the wife was entitled to tax relief for the self-employed.

Dutch version: Werkzaamheden in vof niet hoofdzakelijk ondersteunend

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