What is the small-scale investment allowance (KIA)?
The small-scale investment deduction is a tax benefit for entrepreneurs who invest in their business. You get an extra deduction on top of the normal depreciation. This reduces your profits and therefore your tax burden.
Think of investments in machinery, computers, means of transport or office equipment. The scheme rewards entrepreneurs who actively invest and is especially interesting for those who spend smaller or medium amounts.
Conditions for the KIA in 2025
To benefit from the KIA in 2025, the following conditions apply:
- You invest a total of between €2,901 and €392,230.
- Each asset costs a minimum of 450 euros.
- The investment is business and depreciable.
- Your company is liable to income or corporate tax.
- Second-hand purchases count as long as they are used for business purposes.
You don't have to apply for the KIA separately; you process it directly in your income or corporate tax return.
Amounts and percentages per year
The KIA is indexed annually. The principle remains: small investments provide a high percentage deduction, medium-sized amounts a fixed amount and with large investments the benefit builds off.
KIA amounts and deduction rates 2023
| Total investment | Deduction scheme 2023 |
| Up to €2,600 | No deduction |
| € 2.601 - € 63.716 | 28% of the investment amount |
| € 63.717 - € 117.991 | Fixed amount of €17,841 |
| € 117.992 - € 353.973 | Deduction builds off |
| Above €353,973 | No more KIA |
For example, an entrepreneur who invested €20,000 in machinery or inventory in 2023 could deduct over €5,600 extra from his profits.
KIA amounts and deduction rates 2024
| Total investment | Deduction scheme 2024 |
| Up to €2,800 | No deduction |
| € 2.801 - € 69.765 | 28% of the investment amount |
| € 69.766 - € 129.194 | Fixed amount of €19,535 |
| € 129.195 - € 387.580 | Deduction builds off |
| Above €387,580 | No more KIA |
In 2024, the limits increased slightly due to inflation adjustment. For many entrepreneurs, the maximum benefit remained the same, but the range became slightly wider.
KIA amounts and deduction rates 2025
| Total investment | Deduction scheme 2025 |
| Up to €2,900 | No deduction |
| € 2.901 - € 70.602 | 28% of the investment amount |
| € 70.603 - € 130.744 | Fixed amount of €19,769 |
| € 130.745 - € 392.230 | Deduction builds off |
| Above €392,230 | No more KIA |
For example, if you invest €50,000 in equipment in 2025, you can deduct an additional €14,000 from your profits.
What is covered by the small business deduction?
The KIA applies to durable business assets that you use for a longer period of time. Think of machines, tools, vehicles, computers, inventory or software. Used business assets also count, as long as they have a business function.
Exceptions: no right to KIA
Certain investments are excluded from the scheme:
- Residential property, land, animals, shares and goodwill
- Passenger cars not intended for commercial transport
- Business assets that you mainly rent out or use abroad
- Goods you bring in from private
- Purchases from family or your own bv
So the KIA is for genuine business investments that contribute to the growth of your business.
Smart investing in a loss-making year
Even in a year when you make a loss, investing can pay off. This is because the KIA increases your tax loss and you can offset that loss against profits from other years.
You can lose:
- Offsetting backwards with profits from previous years to recover tax;
- Forward settlement with future profits to pay less tax later.
This way, investing remains attractive, even if you temporarily have a down period.
Divestment allowance under KIA
If you sell an asset within five years of purchase, you may have to repay part of the benefit via the disinvestment addition.
The rule only applies if the total sale value is above €2,900. The amount you have to add is never higher than the original deduction. This prevents the KIA from being used for short-term benefits.
Multiple investment deduction schemes (MIA and EIA)
In addition to the KIA, there are two additional schemes for investment deduction: the Environmental Investment Allowance (MIA) and the Energy Investment Allowance (EIA). Both encourage sustainable investments and offer additional deductions on top of normal depreciation.
The MIA applies to environmentally friendly investments, such as machines that reduce waste or buildings built sustainably. The deduction rate goes up to 45 per cent, depending on the category.
The EIA focuses on energy-efficient investments, such as heat pumps, insulation or efficient production machines. You can deduct up to 40 per cent of the investment amount extra.
To be eligible, the investment must be listed on the official environmental list or energy list stand and be reported to the government within three months.
Combine
The KIA can be combined with the MIA or EIA. For example, if you invest €50,000 in an energy-efficient machine, you can apply both 40 per cent EIA and 28 per cent KIA.
MIA and EIA cannot be used together for the same asset. By planning investments smartly, you make the most of the schemes and save significantly on tax.
