What Is Depreciation?

Depreciation is the process of gradually deducting the cost of a business asset over time. This applies to assets that:

✔️ Cost at least €450 (excluding VAT)
✔️Have a useful life of more than one year

For example, if you buy a €2,000 laptop for business use, you can’t deduct the full amount immediately. Instead, the tax authorities require you to spread the expense over multiple years, reducing your taxable profit bit by bit.

How to Calculate Depreciation

Most assets are depreciated using the straight-line method, meaning you divide the cost evenly over its expected lifespan.

Example Calculation:

Imagine you purchase a professional camera for €3,000, and after five years, you estimate it will have a resale value of €500.

👉 (€3,000 – €500) ÷ 5 years = €500 depreciation per year

Each year, you can deduct €500 from your taxable income as a business expense.

Key Depreciation Rules in the Netherlands

📌 Depreciation Period: Most business equipment is depreciated over five years, but this varies depending on the asset type.
📌 Minimum Value: Once an asset reaches 10% of its purchase price, further depreciation isn’t allowed.
📌 Business Premises: If you own a business property, different depreciation rules apply based on the WOZ (tax-assessed property value).

Can You Deduct Small Business Purchases Immediately?

Yes! If you buy business-related items under €450 (excluding VAT), you don’t need to depreciate them—you can deduct the full amount immediately in the year of purchase. This includes items like:

✔️ Office supplies
✔️ Small tools
✔️ Software subscriptions

Extra Tax Benefits for Business Investments

As an entrepreneur in the Netherlands, you may qualify for additional tax deductions when investing in your business:

✔️Small Business Investment Deduction (KIA) – Available if your total annual business investments exceed €2,600.
✔️ VAMIL & MIA – Extra deductions for environmentally friendly business purchases.

These benefits can help lower your tax bill, making it worthwhile to plan business investments strategically.