Tax Deductions for Side-Hustle (in Fribourg)

Taxes
1

Hi there,

I’m employed, and I also have a side hustle as an independent contractor for a data annotation company. It’s registered as a sole proprietorship (“raison individuelle”) in Fribourg.

I’m trying to understand what business expenses I can reasonably deduct and how “reasonable” tends to be interpreted in practice. I understand that expenses must be business-related and proportionate, but the line feels a bit unclear.

For example, I was planning to deduct:

  • One third of my rent, since I use 1 out of 3 rooms in my apartment as a dedicated office

  • Half of my internet/mobile bills

  • The new computer I bought this year, which is my main workstation

Does that seem “within reason” to you? Or would you suggest being more aggressive/conservative in how I claim these deductions?

I’m especially interested in hearing from people with experience in Fribourg, but any input is welcome.

Thanks!

2

You can probably try (there’s little downside except extra scrutiny if they start looking?)

That said rent might be weird to justify given that you have a full time job?

Edit: can’t find the annexe 3 online, does it have more instructions maybe?

3

Sounds unreasonable to me honestly, but I don’t know the standards.

How many hours a week are you spending on this roughly? How much income is it compared to the potential deductions? Do you do home office for your main job? Is the workstation used for something else?

4

Thanks for your inputs, that’s helpful!

How many hours a week are you spending on this roughly?

About 12h on average. I should say that my job is a part-time 80%.

How much income is it compared to the potential deductions?

Those deductions would be about a third of the income (5’000/15’000).

Do you do home office for your main job?

Nope

Is the workstation used for something else?

Light personal use, but mostly for my job.

I guess I’ll try, and see what the tax office’s response is.

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5

My gut feeling: one time costs are easier and more logical to deduct then recurring costs for shared things. With this logic, deducting the computer would make sense, same as for restaurants and transportation (a car) and furniture for the office. But partial rent and partial electricity in the house where you live with your family might be more tricky.

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6

That sounds too much for me. First, one room out of 3 is not necessary one third of a rent, compare with subrenting. Second, the requirements for home office deductions are very strict, like you should have a dedicated office room and not use it for anything else. Third, you use it like 1.5 days per week. You wouldn’t rent an office full time to use it 1.5 days per week, right?

Besides, do you have any profit to declare after such a deduction?

Paying 1/3 of turnover as business expenses in a light office activity doesn’t sound like a reasonable business model to me, although I don’t really know. I guess that is how your deductions are going to be evaluated.

My guess is you can try with 15% of the rent.

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7

Yes, I feared that trying to deduce 1/3 of the rent would be too much… 15% does indeed seem more reasonable. I might go with that instead, thanks!

8

Do you have actually have to list all the deductions for the sole proprietorship separately, I thought it would all be part of the net income number and if they request the breakdown it would then be in the P&L

9

Do you have actually have to list all the deductions for the sole proprietorship separately, I thought it would all be part of the net income number and if they request the breakdown it would then be in the P&L

I have listed everything in the P&L and only gave the net profit on the declaration proper (which is how you should do it, unless I misunderstood something). But they ask for the P&L with the declaration anyway.