Small investment deduction: what is KIA property? – SME Service Desk

When you invest in business assets, you can use the small investment deduction, 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? And which property can you apply for KIA in 2024?

What is the small investment deduction (KIA)?

KIA stands for small investment deduction and is also often called small investment deduction. It is a discount for entrepreneurs who invest in business assets. Consider a company car, office furniture or a laptop. This applies to new properties, but also to second-hand properties. To determine whether there is an investment, the tax authorities look at the time when you entered the payment obligation. For example, when you have accepted a quote, signed a contract or purchased a property. The amount you can deduct from your profit depends on the amount of your investment for the financial year. The terms and amount of KIA may change every year.

Minimum deduction requirements 2024

To be eligible for KIA, you must meet several conditions:

• You are a trader for income tax or corporation tax purposes

• Your company is located in the Netherlands

• You invest in one or more new or used assets for your company

• The investment amount is at least €2,801 per financial year

• The minimum amount per investment is €450.

Properties eligible for KIA

KIA is used for many different properties. The list from the Tax Authorities can be extended and revised every year. Some properties are also examined separately for each case. Assets that have met the conditions to obtain KIA in 2024:

Tangible fixed assets:

Intangible assets

• Program

• Patent

• Royalty

This list is not complete. Check the latest information from the Tax Authorities for KIA eligible investments. For example, look at the general one terms of investment projects.

Amount of investment for KIA

Small investor deduction (KIA) is intended to serve small and medium entrepreneurs. That’s why you get the most out of the KIA deduction when a small amount is involved. To qualify for KIA you must invest between €2,801 and €387,580 (2024). The bigger your investment amount, the less deductions you get.

Small investment deduction 2024: amount and percentage of deduction

Small investment deduction 2023: amount and percentage of deduction

Exception: when are you not entitled to a KIA?

Most business assets are eligible for the small investment deduction, but there are a number of exceptions. You can’t use KIA for things like:

• passenger vehicles not intended for professional transport

• residential houses

• harm

• animals

• instruments intended for representational purposes

• land

• claims

• good intentions

• public law permits

Items intended for use abroad are also not eligible.

Check out the full list and find out which investment is not eligible.

Disassembly addition: KIA modification

A capital gain is an adjustment to the KIA for assets that you sell or give away within 5 years. So if you sell or give away assets worth more than €2,800 within 5 years, you must pay disinvestment tax. Then you pay the portion of the KIA you received. The amount you have to pay depends on the amount of deductions you received and the amount of time you used the business property.

Apply for KIA

To use KIA, you must at least meet the following conditions:

• Minimum investment per property: €450 without VAT. If you do not have the right to deduct VAT, the amount of €450 is inclusive of VAT.

• Minimum total investment per financial year: €2,801.

KIA-tips

If you use KIA wisely, you will benefit more. Things you can consider:

• Invest in more expensive assets. This seems contradictory, but KIA can sometimes make it cheaper to choose the more expensive option, because an investment of more than €450 ‘counts’.

• See a selection of packages. Instead of individual properties, you can often buy packages from companies. In this way you can also exceed the threshold amount with a small investment.

• Please note the terms. Check the KIA terms carefully before making an investment. This way you know for sure if you can use it for that property.

Deduction of small investment in the event of loss

KIA reduces the profit or increases the loss of the company. If you invest in a losing year, KIA increases your loss. This can also provide a tax advantage, because then you have to pay less tax.

NB: KIA is a deductible product, not a subsidy. So you can only use KIA to reduce your losses, but you will not receive any money from the Tax Authorities.

Other plans to reduce investment

Apart from KIA, there are other investment deduction schemes. The most important are:

Thanks to these types of projects, investing is very cheap.