What is an investment deduction
Investment deduction is an extra deduction from your profit for qualifying business assets, on top of normal depreciation. The schemes can apply to income tax or corporation tax. The emphasis here is on the sole trader who declares profit under income tax. Each scheme has its own conditions.
Three types of investment deduction
There are three types of investment deduction you can make use of as an entrepreneur in 2026. The Small Scale Investment Allowance (KIA) applies to general investments such as machinery or computers. The Environmental Investment Allowance (MIA) is for sustainable investments that are good for the environment. The Energy Investment Allowance (EIA) applies to investments that save energy or generate sustainable energy. Each scheme has its own conditions, but they all help to reduce your tax burden.
Small-scale investment deduction (KIA)
With the small-scale investment deduction (KIA) you deduct an additional amount from your profit. In 2026, the qualifying annual total is between €2,901 and €398,236. The deduction first increases, then remains the same and is phased out for higher investments.
Both tangible assets, such as machinery and tools, and certain intangible assets can qualify. Second-hand assets can also count. It concerns a business asset, not every individual business expense.
Terms
- A qualifying asset costs a minimum of €450.
- Calculate without deductible VAT; non-deductible VAT is part of the investment.
- Check excluded assets and transactions. For example, passenger cars used for professional transport have an exception.
- For assets not yet brought into use, the amount paid may limit the deduction.
Read the rules regarding investment, payment and commissioning.
Table small-scale investment deduction 2026
| Investment amount 2026 | Deduction 2026 |
|---|---|
| Up to €2,900 | No deduction |
| €2,901 – €71,683 | 28% of the investment amount |
| €71,684 – €132,746 | €20.072 |
| €132,747 – €398,236 | €20,072 minus 7.56% of the amount exceeding €132,746 |
| More than €398,236 | No deduction |
Source: KIA table 2026 from the Netherlands Tax Administration.
Example calculating KIA
Example: in 2026, you buy one qualifying asset costing €3,000 and make no other investments. You start using it that year. KIA is 28% × €3,000 = €840 in additional profit deduction. This is not a €840 tax refund. You calculate normal depreciation separately, as explained in our guide to depreciating a business laptop.
How to take advantage of KIA
You don't need to make a separate application. You enter the KIA in your tax return under the section investment deduction. Keep invoices, receipts and purchase dates well. The tax authorities can always ask for proof.
Environmental investment allowance (MIA)
The MIA is intended for business owners who invest in environmentally friendly business assets. If your investment appears on the government’s Environmental List, you may deduct up to 45% of the amount from your profit. A sustainable product does not automatically qualify: the exact code and technical requirements are decisive. The MIA not only provides a tax benefit, but also contributes to sustainable business practices.
| Environmental category | Deduction rate |
|---|---|
| F or G | 45% |
| A or D | 36% |
| B or E | 27% |
Flexible depreciation of environmental investments (Vamil)
Under certain conditions, Vamil allows you to write off 75% of the investment at a time of your choosing. This may offer advantages in terms of interest and liquidity. It brings forward the depreciation and does not constitute an additional tax deduction.
Combine with MIA
The code on the Environment List determines whether MIA, Vamil or both apply. Check that code before relying on a combination.
Terms
- The asset is listed on the Environmental List.
- It is new and not second-hand.
- The qualifying investment amount is a minimum of €2,500 per application.
- Report purchase costs within three months of entering into the commitment, for example an order or assignment.
- Check the exact code, excluded costs and any limitations.
How to make use of MIA
Use the Environmental List applicable on the date of the purchase agreement or order. Submit the application to RVO on time; the deadline does not start only upon payment. Different deadlines apply to self-produced manufacturing costs. Keep the decision and process the allowed deduction in your tax return. View the RVO MIA/Vamil schemes.
Energy investment allowance (EIA)
The EIA is intended for energy-efficient investments. You may deduct an additional 40% of the costs from your profits. A heat pump, insulation product or solar panel only qualifies if it meets the relevant requirements set out in the Energy List. The EIA is of interest to business owners who wish to reduce their energy costs and benefit from tax relief.
Terms
- The asset is listed on the Energy list.
- The asset has not been used previously and complies with all code requirements.
- The notification amount is a minimum of €2,500 per notification.
- Report acquisition costs within three months of the investment commitment.
- You can combine EIA with KIA, but not with MIA.
How to take advantage of EIA
Submit your report to RVO based on the order or assignment. Different deadlines apply for production costs. Use the EIA conditions and application deadlines for your situation. After the statement, you process the allowable deduction in the tax return.
Combine
KIA can apply alongside MIA or EIA if you also meet the KIA conditions. You cannot claim both MIA and EIA for the same investment costs. Different components require a separate assessment. Check the applicable code for Vamil. You do not submit an RVO notification for KIA; you do for EIA and MIA/Vamil.
Repaying investment deduction on disposal (desinvesteringsbijtelling)
Do you sell or give away business assets within five years from the start of the investment year? If the combined value exceeds €2,900 in that year, you may have to add back some of the investment deduction to your taxable profit. Use the original deduction percentage; the add-back cannot exceed the deduction originally received. A transfer to private use can also count. See the conditions for the investment deduction add-back.
Example: you buy a laptop for €3,000 in 2022 and sell it for €2,500 in 2026. If this is the only relevant disposal in 2026, the combined threshold is not exceeded. This sale alone therefore does not trigger an investment deduction add-back.
Investment deduction for car
Assess the vehicle, its use and each scheme separately. A van may qualify for KIA; MIA/Vamil depends on the current Environmental List and its conditions. Electric driving does not qualify automatically. Also read how to choose whether to buying a car for business or private use.
Incurring costs before you start? See how start-up costs differ from investments. Would you like help recording them in your accounts and tax returns? View the Van Passe package and the conditions.
