When is an expense an investment and when does the KIA apply?
When an asset costs more than € 450,- ex VAT it’s considered an investment. Read our explanation of what an investment entails and how investments sometimes entitle you to an extra benefit, the KIA.
Are you our customer and would you like us to think along with you? Then read more about year-end tips.
Assets that together form an investment:
Acquisition costs (ex. VAT) include:
- The purchase price
- The purchase costs (such as the notary fees for the purchase of real estate)
- The installation costs and the costs of making the asset ready for use.
Several small investments could also form 1 asset together. For instance:
If you buy a computer worth € 350 for your company with a monitor worth € 150, a mouse worth € 15 and a keyboard worth € 25, then all these items together will form 1 asset worth € 540. This may be important for the investment benefits such as the KIA.
* Are you not VAT liable, but you are investing? Then you may enter the total amount including VAT as the investment amount.
If you invest in assets in a year, you may be eligible for the KIA, also known as the small scale investment deduction. The assets you invest in must be eligible for the investment deduction (meaning their worth must be €450,- or more).
If you invest more than € 2,400 and less than € 58,238 (2020) in assets in a year, then you are eligible to an additional deduction of up to 28% of the invested amount. If you invest above this amount the deduction decreases.
* PS Cars are not included here (except for some energy efficient cars).
In the overview in The Bookie Webapp, investments and private expenses are not shown. This has to do with the fact that investments and private expenses don’t belong on the income statement, since they are not result-determining.
However, you can keep an eye on your investments by adding up your investments. You can also do this using exports: see this FAQ. If you think you are close to the amounts mentioned above, it may be beneficial to consider making additional investments in that financial year.
Let The Bookie calculate the KIA
Are you a customer of ours? Then we’ll apply the KIA, if applicable, after the fiscal year for you.
Do you have questions about this beforehand? Then you can always email your Bookie or schedule a consultation so we can discuss all the possibilities. Read here what we can do for you during such an end-of- year consultation.
Calculate the KIA yourself
Investments are (generally) written off in five years. There are exceptions to this, for example with certain expenses or if you are exempt from VAT. It is also true that investments must meet certain conditions.
Finally, you must take into account that if you invest during the year, you depreciate proportionally in that year. If you invest on July 1, then you only write off 6 months in that calendar year. That means your 5 years could be spread over 6 calendar years.
All the more reason to let us do this. To avoid any misunderstandings, we do this automatically after the end of the financial year.