Bookkeeping
Taxes
Depreciation vs Immediate Deduction: When Can You Deduct a Purchase Upfront?
Learn when a business purchase can be deducted immediately and when it must be depreciated. Understand the Dutch €450 threshold, residual value rules, KIA, WAS, and VAMIL in 2026.
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12 mins
Intro
Many Dutch entrepreneurs assume that every business purchase can be deducted immediately. It cannot. For Dutch tax purposes, some purchases are treated as ordinary business expenses and deducted in full in the year of purchase, while others must be spread over multiple years through depreciation.
The distinction matters because it directly affects your taxable profit and cash flow. Buying a laptop, machine, company vehicle, or other long-term asset often means waiting several years before receiving the full tax benefit. Understanding where the line is drawn helps you avoid surprises and optimize your tax position.
The Core Rule: Two Types of Business Purchases
Every business purchase falls into one of two categories for Dutch tax purposes. The dividing line is the €450 threshold excluding VAT (BTW).
Purchases below €450 are generally treated as normal business expenses. They can be deducted in full in the year they are purchased.
Purchases of €450 or more that will be used for more than one year are usually classified as business assets (bedrijfsmiddelen). These assets must be depreciated over their useful life because they generate value for the business over multiple years.
A detail many entrepreneurs miss is that the threshold applies to the total acquisition cost, not just the purchase price.
This means you must include:
Installation costs
Transport costs
Setup costs
Other costs required to make the asset operational
For example:
A machine purchased for €380 with €90 delivery and installation costs has a total acquisition cost of €470.
That means the asset exceeds the threshold and must be depreciated.
For entrepreneurs using the KOR scheme, VAT becomes particularly important. If you cannot reclaim VAT because you are not VAT-registered, the VAT becomes part of the acquisition cost and counts toward the €450 calculation. Entrepreneurs dealing with VAT obligations should also understand when to file VAT.
How Standard Depreciation Works
When a purchase must be depreciated, the deduction is spread across the asset's useful life. The standard Dutch method is straight-line depreciation (lineaire afschrijving).
The annual deduction depends on three factors:
Acquisition cost
Residual value (restwaarde)
Useful life
Example
Item | Amount |
Laptop purchased | €1,800 |
Expected residual value after 3 years | €100 |
Depreciable amount | €1,700 |
Annual depreciation (3 years) | €567 per year |
Tax saving per year at 37.48% IB rate | Approximately €212 |
The residual value is often overlooked. If the laptop is expected to retain a value of €100 after three years, you may only depreciate down to €100, not to zero.
Several important rules apply:
Maximum depreciation is generally 20% of acquisition cost per year
This effectively creates a minimum depreciation period of five years
Goodwill may generally only be depreciated at 10% per year
Buildings have separate rules linked to the WOZ value
Depreciation starts when the asset is first used
Depreciation stops when the book value reaches the residual value
Purchases made during the year usually receive a prorated first-year deduction
One of the most misunderstood rules is the five-year effect. Many entrepreneurs assume they can depreciate a €2,000 laptop over three years because that reflects its practical lifespan. In reality, the annual deduction is capped at 20%, meaning the tax deduction is spread over at least five years regardless of actual usage.
The Immediate Deduction: When You Can Write Off Everything in Year One
There are three legitimate ways to deduct the full cost of a purchase during the year of acquisition.
1. Purchases Below €450
If the total acquisition cost is below €450, the purchase is immediately deductible as a business expense.
Examples include:
Office supplies
Small tools
Software subscriptions
Phone accessories
Basic equipment
No depreciation is required.
2. Willekeurige Afschrijving voor Starters (WAS)
Qualifying starters may use the special Dutch regime known as Willekeurige Afschrijving voor Starters (WAS).
This allows entrepreneurs to choose their own depreciation pattern, including deducting 100% in year one.
Conditions include:
Operating as a sole proprietorship, VOF, maatschap, or CV
Eligibility for the starter's deduction
Asset cost of at least €450
Useful life exceeding one year
Asset falls within KIA-eligible categories
A five-year correction rule applies. If the asset is sold, rented out, or no longer used in the business within five years, depreciation may need to be recalculated as though standard depreciation had been used.
3. VAMIL
The VAMIL scheme applies to qualifying environmental investments.
Under VAMIL:
Up to 75% of the investment may be depreciated at any time of your choosing
The asset must appear on the official RVO Environmental List (Milieulijst)
Registration with RVO must generally occur within three months
The remaining 25% follows normal depreciation rules
VAMIL is frequently combined with MIA to maximize the tax benefit.
Depreciation vs. KIA: Two Separate Mechanisms That Can Be Combined
One of the biggest misconceptions among Dutch entrepreneurs is treating depreciation and the KIA (Kleinschaligheidsinvesteringsaftrek) as alternatives.
They are not alternatives.
They are completely separate tax mechanisms.
Depreciation spreads the purchase cost over multiple years.
KIA creates an additional one-off deduction during the year of purchase.
The two can be combined.
For example:
A founder purchases a machine for €5,000.
The machine may be depreciated at:
€1,000 per year over five years
At the same time, the entrepreneur may qualify for:
KIA of approximately 28%
Additional deduction of €1,400
The KIA does not reduce the depreciable base.
The machine continues to be depreciated using the full €5,000 acquisition cost.
This means qualifying assets can generate two parallel tax benefits:
Annual depreciation deductions
One-time KIA deductions
Entrepreneurs planning investments should understand how KIA MIA EIA investment deductions interact with standard depreciation rules.
A Quick Decision Guide
When making a business purchase, the decision process is usually straightforward.
Purchase situation | Tax treatment |
Total cost below €450 | Immediately deductible in full as a business expense |
Total cost €450 or above and used longer than 1 year | Must be depreciated |
Qualifying starter using WAS | Flexible depreciation, including 100% in year one |
Environmental asset on RVO Milieulijst | VAMIL allows 75% flexible depreciation |
Asset above €450 and annual investments above KIA threshold | KIA applies on top of depreciation |
For most founders, the most tax-efficient outcome is often:
Standard depreciation
Plus KIA
Plus accelerated depreciation through WAS if available
This combination can create substantial first-year tax savings while remaining fully compliant.
If you're unsure which treatment applies, discussing the purchase with an accountant or bookkeeper before investing can prevent costly mistakes.
Let Tax Rules Work in Your Favor
The difference between immediate deduction and depreciation can significantly affect your cash flow, taxable profit, and investment decisions.
At Neno, we help founders understand not only which purchases qualify for immediate deduction, but also how depreciation, KIA, VAT, bookkeeping, and business structure decisions fit together.
Whether you're deciding between a BV or sole trader, making your first major investment, or optimising your tax position, our team can help.
Book a demo and discover how proactive financial advice can help you keep more of your profits.
FAQs: Depreciation and Immediate Deduction in the Netherlands
What is the €450 rule for Dutch business purchases?
Purchases below €450 are usually deductible immediately. Purchases of €450 or more that are used for more than one year are generally treated as business assets and must be depreciated.
Does the €450 threshold include VAT?
Normally no, because VAT can usually be reclaimed. However, if you participate in the KOR scheme or otherwise cannot reclaim VAT, the VAT becomes part of the acquisition cost and counts toward the threshold.
Can I depreciate a purchase faster than five years?
Usually not. Most assets are subject to a maximum annual depreciation of 20%, effectively creating a minimum depreciation period of five years.
What is Willekeurige Afschrijving voor Starters (WAS)?
A special regime allowing qualifying starters to choose their own depreciation schedule, including deducting the full amount in the first year.
Can I claim KIA and depreciate the same asset?
Yes. KIA and depreciation are separate tax mechanisms and can be applied simultaneously.
What is residual value and how does it affect my deduction?
Residual value is the estimated value of an asset at the end of its useful life. You may only depreciate down to that value, not below it.
Can a BV use Willekeurige Afschrijving voor Starters?
No. WAS is intended for qualifying entrepreneurs in the income tax system, such as sole proprietorships and certain partnerships. BV structures generally do not qualify.
Written by
Nick Knuppe
CEO & Founder
