Investing in your company is of course always a good idea. Do you want to know how you can get extra benefits from it? It’s a matter of smart planning!
First of all, it is important to know whether something is a business asset or not. With a purchase of 450 euros or higher, it is a business asset and it will appear on your balance sheet. If a purchase is less than 450 euros, it should be included as costs immediately.
The moment a purchase is seen as a business asset and is therefore on your balance sheet, you can write it off and it is also possible to claim the investment deduction.
The law states that in principle you depreciate company assets in 5 years. You do take into account any residual value. These depreciations are costs that you deduct from your result for that year.
Purchase of a computer in January 2018 for EUR 1,200 (> EUR 450 and thus a business asset).
If the residual value is 200 euros, 1200 – 200 = 1000 euros remains.
Depreciation 1000 euros divided by 5 years = depreciation 200 euros per year.
For starting entrepreneurs it is possible to write off in 2 years instead of 5 years. In the example above, this would mean that you can deduct 500 euros from your profit per year. This can have the advantage that you pay less tax in the start-up phase of your company. Note: Only do this if you achieve a positive result.
The investment deduction is an additional deduction of the profit. This means that in addition to the depreciation that reduces your profit every year, an extra amount may be deducted from your profit once in the year of purchase. Please note that this also only applies to purchases that are classified as business assets.
The total amount of the investments during the year must be at least 2,301 euros. From that amount you may deduct 28% of that amount from your profit.
So make sure that you do not make a purchase of 1,300 euros in December 2018 and a purchase of 1,400 euros in January 2019. If these are the only investments for both years, you will miss out on the investment deduction (28% of 2,700 euros) for both years! So better planning your expenses can save you money.
Below you will find a table with the amounts and percentages of the investment allowance.
Investment Small-scale investment allowance
|Investment||Small-scale investment allowance|
|< € 2.300||€ 0|
|€ 2.301 – € 56.642||28% van het investeringsbedrag|
|€ 56.643 – € 104.891||€ 15.863|
|€ 104.892 – € 314.673||€ 15.863 minus 7,56% van het deel van het investeringsbedrag boven de € 104.891|
|> € 314.673||€ 0|
Do you have any questions about investing? Then contact us.