Investment deduction (2023): here's what you need to know

Introduction

Are you going to invest in your business, for example, because it will make it easier for you to grow further? Or do you want to invest in making your company more energy efficient? Then find out whether you are eligible for an investment deduction. There are three types of investment deduction in the Netherlands, with which you pay less tax at the end of the day.

What is an investment deduction?

The investment deduction is a scheme for business owners to invest in their business in a more tax-efficient way. With this tax scheme, you reduce your taxable income or your taxable profit, so you pay less tax at the bottom of the line.

Three types of investment deduction Netherlands

There are three types of investment deduction in the Netherlands, each intended for an investment in specific business assets:

• The small-scale investment deduction (KIA)
• The Environmental Investment Allowance (MIA) and the Arbitrary Depreciation of Environmental Investments (VAMIL)
• The energy investment allowance (EIA).

Kleinschaligheidsinvesteringsaftrek

You may be eligible for the small-scale investment deduction (KIA) if you invest in general business assets, such as furniture, computers and tools, during a fiscal year. However, you must meet a number of conditions. Your company must be established in the Netherlands and you must be liable for income tax or corporation tax. The investment per asset must also be at least € 450. The amount of the deduction depends on the amount you invest. In 2023, the deduction applies to an amount between € 2,601 and € 353,973. You apply the small-scale investment deduction on your income tax or corporate income tax return.

Amounts and percentages small-scale investment deduction 2023

Environmental investment deduction and Vamil

The environmental investment allowance (MIA) can be used if you invest in environmentally friendly equipment or techniques. You must meet several conditions. For example, you must invest in assets that are on the government's Environmental List. The means may not have been used before and you must invest a minimum of € 2,500 per means. Of course, your company must be established in the Netherlands (or the Netherlands Antilles) and you must pay income tax or corporation tax. The MIA is often used in combination with the VAMIL.

How high is the investment deduction through the MIA?

The investment deduction through the MIA can be up to 45% of the amount you invest. This means that you can deduct a maximum of 45% of this amount from your profit. Very attractive! The exact percentage depends on the environmental impact and prevalence of the asset in which you invest.

How high is the investment deduction through VAMIL?

VAMIL allows you to write off up to 75% of the investment cost. You can do that at any time. By depreciating more quickly, you can reduce your taxable profit. You will then pay less tax that year, which will benefit your liquidity. As with the MIA, the VAMIL also concerns investments in assets on the Environmental List.

Energy investment deduction

If you invest in_{CO2 reduction}, energy efficient techniques, renewable energy or energy saving business assets, you can use the energy investment deduction (EIA). This scheme was developed to stimulate companies to invest in sustainable energy and business assets. It allows you to deduct 45.5% of the investment costs from your profit.

Conditions energy investment deduction

There are several conditions attached to making use of the EIA. For example, the asset you purchase must be on the government's Energy List. The investment amount must be at least € 2,500 per asset and the asset has not been used before. You may not use both the energy investment deduction and the environmental investment deduction for the same asset at the same time.

Engage a tax expert

It is important to familiarize yourself with the investment deduction in the Netherlands and all the conditions involved. It is advisable to get help from a tax advisor or an accountant, so you can be sure you are making the right choices fiscally. Or read more interesting articles within our knowledge base.