In 2026 the small-scale investment allowance (KIA) is an extra deduction from your profit of 28% of what you invest, if your total investment is between € 2,901 and € 71,683. If you invest more, the deduction first stays at € 20,072 and then falls. Above € 398,236 you get nothing (Belastingdienst, KIA 2026).
Because the KIA depends on the total per year, one purchase in December can give you a lot, nothing at all, or even cost you deduction. That depends on where you are in the table.
In short
- In 2026 the KIA is 28% for a total investment of € 2,901 up to and including € 71,683. The maximum is € 20,072.
- You have invested as soon as you conclude the purchase, not when you pay. If you are not using the asset yet, you get the deduction up to what you have already paid.
- Buying in December mainly pays off if you are still below € 2,901 or in the 28% zone. If you are already above € 71,683, investing more this year gives no extra KIA.
In this article
- How high is the small-scale investment allowance in 2026?
- Which investments count towards the KIA?
- When have you invested: when you order, pay or start using?
- When do you pay the KIA back?
- Is investing at the end of the year a good idea?
- Can you combine the KIA with the MIA or EIA?
- How does the KIA work for a general partnership and a private limited company?
- Frequently asked questions about the KIA
How high is the small-scale investment allowance in 2026?
The KIA depends on the total you invest in business assets in a calendar year. Business assets are things you use in your business for more than a year, such as a van, tools or a computer. The KIA comes on top of normal depreciation (Income Tax Act 2001, articles 3.40 and 3.41).
| Total investment in 2026 | KIA |
|---|---|
| up to and including € 2,900 | € 0 |
| € 2,901 up to and including € 71,683 | 28% of the amount invested |
| € 71,684 up to and including € 132,746 | € 20,072 |
| € 132,747 up to and including € 398,236 | € 20,072 minus 7.56% of the part above € 132,746 |
| more than € 398,236 | € 0 |
Source of the table: Belastingdienst, small-scale investment allowance 2026. The same amounts are in the law (Income Tax Act 2001, article 3.41).
The KIA lowers your profit, not your tax directly. What the deduction is worth depends on your rate. An example for a sole trader with profit in the 37.56% band in 2026 (explanatory memorandum Tax Plan 2027, table 1): € 1,000 of KIA becomes € 873 less taxable profit after the 12.7% SME profit exemption, which is about € 328 less income tax. For a private limited company at the 19% rate, € 1,000 of KIA is € 190 less corporate income tax (Belastingdienst, corporate income tax 2026).
Which investments count towards the KIA?
Almost all business assets you buy for your own business, with an investment amount of at least € 450 each. Costs below that limit do not count, not even towards the total (Belastingdienst, no right to investment allowance). An asset does not have to be new for the KIA, so a second-hand van or machine also counts (Belastingdienst, conditions for investment schemes).
You use the amount excluding VAT if you get the VAT back. If you do not get VAT back, for example because you only supply exempt services, the amount including VAT counts (Belastingdienst, no right to investment allowance).
These investments do not give KIA (Income Tax Act 2001, article 3.45, Belastingdienst):
- Passenger cars, unless they are intended for professional transport such as taxis. That also applies to an electric passenger car. A van is not a passenger car and therefore does count.
- Homes and land, including the land under your business premises.
- Goodwill, securities, receivables, permits and animals.
- Assets mainly intended to be rented out to others.
- Items you transfer from private ownership to the business.
- Purchases from members of your household, from your parents, children and other relatives in the direct line, and from a private limited company in which you hold shares. In those cases you can ask for an exemption.
An improvement to an asset counts if the asset itself also counts. Racking in your van to store tools can therefore count. Normal maintenance does not count (Belastingdienst, conditions for investment schemes).
When have you invested: when you order, pay or start using?
When you order. For the KIA you invest at the moment you enter into an obligation to buy something. That is for example when you accept a quote in writing, accept an offer orally without conditions, or sign a purchase agreement (Belastingdienst, conditions for investment schemes, Income Tax Act 2001, article 3.43).
So the investment counts in the year of purchase. But if you are not yet using the asset on 31 December, you do not get more deduction that year than you have already paid. The rest moves on to the following years, at the latest to the year in which you start using it (Income Tax Act 2001, article 3.44).
There are two time limits. If within 12 months of the purchase you have not paid 25% and are not yet using the asset, it counts as undoing the investment. The same applies if you do not start using it within 3 years of the start of the year of investment. You then repay the deduction through the disinvestment addition (Income Tax Act 2001, article 3.47).
When do you pay the KIA back?
If you sell an asset within 5 years of the start of the year in which you bought it, and that year you sell business assets for more than € 2,900 in total. This is called the disinvestment addition. You then add the same percentage to your profit that you received as a deduction on purchase, calculated on the sale price (Belastingdienst, disinvestment addition).
The addition is never higher than the deduction you received earlier. Transferring to private use and starting to rent it out also count as a sale (Belastingdienst, disinvestment addition).
An example. In 2023 you bought a van with 28% KIA. You sell it in December 2026 for € 12,000 when buying a new one. The 5-year period runs from 1 January 2023 to 31 December 2027. You then add 28% of € 12,000 to your profit, so € 3,360. If you wait until 2028 to sell, the addition for that van no longer applies.
Is investing at the end of the year a good idea?
Sometimes yes, sometimes no. It depends on how much you have already invested this year. If you are in the 28% zone, every extra euro gives 28 cents of deduction. If you are at the ceiling, an extra purchase this year gives nothing. If you are above € 132,746, an extra purchase costs you deduction.
Worked example: installer hesitates in December about a van
This is an example using the 2026 table. An installer has already invested € 9,500 in 2026 in a press tool, an inspection camera and a laptop, each above € 450. In December he hesitates about a new van of € 48,000 and tools of € 4,000, excluding VAT. If he buys everything in December and starts using the van in December, he invests € 61,500 and the KIA is 28%, so € 17,220. Without the van it is € 13,500 and € 3,780 KIA. The van therefore gives € 13,440 extra deduction this year. If he orders in December, pays a € 5,000 deposit and the van only arrives in February, the van does count in 2026, but the deduction for the van in 2026 is at most € 5,000. The rest follows in 2027.
For another company it is different. If an installation company has already invested € 75,000 in 2026, it is at the ceiling of € 20,072. With the van added, the total becomes € 123,000 and the KIA stays € 20,072. So the van gives nothing extra this year. If the company has already invested € 120,000, the total becomes € 168,000. The KIA then falls to € 20,072 minus 7.56% of € 35,254, so about € 17,407. The van then costs about € 2,665 of deduction.
For those companies it may be better to order the van in January 2027. It then counts towards the 2027 table. Note: the KIA amounts for 2027 are not yet known on 16 October 2026. The Tax Plan 2027 contains a proposal to adjust the KIA limits in 2027 for only 48% of inflation (explanatory memorandum Tax Plan 2027). That is a proposal, not yet law.
Do not buy just for the deduction. At the bottom of the table a small purchase does pay off: if you have invested € 2,000 this year, a machine of € 1,000 takes you over the € 2,900 limit. You then get 28% of € 3,000, so € 840 KIA instead of nothing. But € 840 of deduction is about € 275 less tax at the 37.56% rate, and the machine costs € 1,000. A purchase you do not need therefore costs more than it brings in.
Research shows that small firms respond strongly to such incentives. In the United States, small firms invested much more extra than large firms when tax rules gave faster deductions, especially when the benefit produced cash straight away (Zwick & Mahon, 2017). That is a reason to plan the timing, but also to check whether the purchase makes sense without the deduction.
Can you combine the KIA with the MIA or EIA?
Yes. Besides the KIA there are the energy investment allowance (EIA) and the environmental investment allowance (MIA). In 2026 the EIA is 40% for new assets on the Energy List. An investment can get EIA and KIA at the same time, but EIA and MIA together is not possible (Belastingdienst, changes 2026).
In 2026 the MIA is 45%, 36% or 27%, depending on the code on the Environmental List. For EIA and MIA the asset must be new and cost at least € 2,500 (Belastingdienst, changes 2026, no right to investment allowance).
You must report the investment to RVO within 3 months of ordering. Use the list for the year in which you order. Reporting late means no EIA or MIA (RVO, Energy investment allowance, RVO, MIA and Vamil). So check before you sign whether your van, heat pump or solar panels for your own premises are on the Energy List or Environmental List.
How does the KIA work for a general partnership and a private limited company?
In a general partnership or professional partnership, the tax authority adds up all investments of the partnership. You calculate the KIA on that total. Each partner then takes his share, in proportion to his share of the profit (Belastingdienst, KIA).
So a partnership with two partners does not get the € 20,072 ceiling twice. A different split is allowed, for example in equal parts or by capital, if all partners use the same criterion and submit a joint request before the assessment of any of them is final (Belastingdienst, KIA). If a partner also invests in his own business, those investments are added to the total (Income Tax Act 2001, article 3.41).
A private limited company gets the KIA in corporate income tax, with the same table as in income tax (Belastingdienst, changes to corporate income tax 2026). Because the company's rate is lower, the same deduction saves less tax than for a sole trader in a high band. If you buy an asset from your own company, you in principle get no investment allowance (Belastingdienst, no right to investment allowance).
Frequently asked questions about the KIA
Do I get KIA on a van?
Yes. A van is not a passenger car and is therefore not excluded. A second-hand van also counts for the KIA (Belastingdienst).
Does a set of tools of € 300 count?
No. Assets under € 450 do not count for the KIA, not even towards the total (Belastingdienst).
I pay for the van in January, but sign in December. In which year does it count?
In the year you sign. If you are not yet using the van on 31 December, that year you only get deduction up to the amount you have already paid (Income Tax Act 2001, article 3.44).
What are the KIA amounts for 2027?
They were not yet known on 16 October 2026. The Tax Plan 2027 proposes adjusting the limits for only 48% of inflation. The House of Representatives is expected to vote on 12 November 2026, after which the Senate follows (Tax Plan 2027).
Do I have to apply for the KIA myself?
You do not apply for the KIA separately. You choose it in your income tax or corporate income tax return (Income Tax Act 2001, article 3.41). Only for EIA and MIA do you first report the investment to RVO.
Sources
- Belastingdienst, Small-scale investment allowance 2026, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Small-scale investment allowance (KIA), accessed 16 October 2026. belastingdienst.nl
- Wet inkomstenbelasting 2001 (Income Tax Act 2001), articles 3.40 to 3.47, in force from 1 January 2026. wetten.overheid.nl
- Belastingdienst, No right to investment allowance, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Conditions for investment schemes, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Disinvestment addition, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Changes to corporate income tax 2026, accessed 16 October 2026. belastingdienst.nl
- RVO, Energy investment allowance (EIA) for businesses, accessed 16 October 2026. rvo.nl
- RVO, Environmental investment allowance and arbitrary depreciation of environmental investments, checked 3 September 2026. rvo.nl
- Ministry of Finance, Tax Plan 2027 bill with explanatory memorandum, 15 September 2026. rijksoverheid.nl
- Zwick, E. & Mahon, J. (2017). Tax Policy and Heterogeneous Investment Behavior. American Economic Review, 107(1), 217-248. doi.org