When you invest in business resources, you can use small investment deductions, known as KIA for short. These deductions provide financial benefits to your company. What do you need to know if you want to use KIA?
What are minimal investment deductions?
KIA, also known as small deductions, is a deduction for entrepreneurs investing in commercial real estate. Thanks to this arrangement, you can significantly reduce your company’s annual profits, especially by making investments. The commercial property you are investing in must comply with the KIA requirements. The amount you can deduct from the profit depends on the amount of your investment for the financial year.
Amount of investment for KIA
As the name suggests, small investment deductions are intended to take small and medium-sized entrepreneurs. That’s why you benefit the most from KIA deductions when small amounts are involved. The larger your investment amount, the less discounted you will receive. You can see this in the table below, with KIA 2022 and 2021.
Minimum investment deductions 2022
|Amount of investment||Makato|
|€ 2,401 to € 59,939||28% of the investment amount|
|€ 59,940 to € 110,998||€ 16,784|
|€ 110.999 to € 332.994||€ 16,784 excluding 7.56% of the total investment amount exceeding € 110,999|
|> € 332,994||0%|
Terms of cut for small investment
Of course you must meet certain conditions if you want to qualify for KIA. A few key elements to being able to participate in this program:
You are an entrepreneur for income tax or corporate tax
Your company is in the Netherlands
You are investing in one or more new or second-hand assets for your company
The amount of investment is at least € 2,401 per financial year
The minimum amount for each investment is € 450
Suppose you are selling a property worth more than € 2,400 within five years. Or you give. In that case, you must consider the addition to the disinvestment: you must pay a portion of the discount you have received. The amount you must pay is not greater than the amount of deductions you received.
When are you not entitled to KIA?
Many business resources qualify for small investment cuts, but there are a number of differences. You cannot use KIA for items such as:
passenger vehicles that are not intended for professional transportation
instruments intended for the purpose of representation
Business resources intended to be used abroad are also not eligible.
Items that you can use for KIA must cost at least € 450 excluding VAT. If you do not have the right to deduct VAT, that amount is € 450 plus VAT. Minimum investment deductions do not apply to cheap commercial assets. In total you must have invested at least € 2,401 in the financial year in order to use KIA.
If you make good use of KIA, you can benefit greatly. For example: you want to invest in a tablet for your company. It is probably easier to buy a more expensive model, so one for more than € 450. The model ‘shares’ with KIA. Or instead of buying office accounts from various companies, you can buy packages from certain companies, to still exceed € 450 per investment.
So if you want to buy a new laptop for a year, it might be interesting to go for a more expensive model, so you can qualify for a small discount by going one. That means: the higher the purchase, the more profit. Not surprisingly, many independent entrepreneurs and other entrepreneurs are looking for a more sophisticated computer. It is about to feel like a KIA grant.
Minimum investment deductions in case of loss
KIA reduces profits or increases corporate losses. Therefore, small investment deductions can be used in the year of loss.
Other investment reduction programs
In addition to KIA, there are other investment deduction programs. The main ones are:
Thanks to these types of projects, investing is much cheaper.