How to make optimum use of the investment allowance
The small-scale investment allowance (Dutch acronym: KIA) is an allowable tax deduction whose aim it is to incentivise investments in operating assets. It amounts to 28 percent of the outlay for investments within the € 2,300 to € 56,642 range to a maximum of € 15,863. The amount in KIA remains the same for amounts invested of up to € 104,891, from which point onwards it starts to decline until the investment total has reached € 314,673, which is where the KIA entitlement runs out altogether. A total outlay of € 56,642 in investments is where the KIA scheme truly comes into its own (this amount will turn out slightly higher in 2019 due to indexation). You can optimise the benefits to be gained from the KIA scheme by strategically planning your investments. We would point out that there are certain operating assets which are excluded from the KIA scheme.
Carefully plan your divestment of operating assets
The divestment of operating assets for which KIA has been collected at an earlier stage will involve part of the past allowance having to repaid where the operating asset in question is sold within a five-year term of the start of the year during which it was purchased. This makes it lucrative to defer the sale (where you can) until after the fifth year has expired, as this would exempt you from having to augment your business earnings by recaptured investment allowance.
Additional investment allowance
In addition to qualifying for KIA, you may be eligible for an energy investment allowance (Dutch acronym: EIA) or environmental investment rebate (Dutch acronym: MIA) as well. The EIA scheme is available for investments made in energy efficient operating assets, with the allowance in question totalling 55 percent of the amount invested to a maximum outlay of € 120 million. The environmental investment rebate is available for investments in operating assets forming part of the MIA/Vamil inventory, which is subject to annual revision. If you want to make sure that your investment meets the environmental investment rebate criteria, complete the outlay before the current year is out!
Prompt filing of application
Make sure your applications for admission to the EIA, MIA and/or Vamil (Arbitrary Depreciation of Environmental Investments) schemes reach the Netherlands Enterprise Agency (or RVO.nl, as it is known in Dutch) within three months of your having taken on the relevant investment commitment.
Dutch version: Optimaliseer de investeringsaftrek