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Investment tax credit

The moment costs exceed the amount of EUR 450 ex VAT, then these costs are no longer referred to as costs, but as investments. However, it is possible that you spend more than EUR 450 ex VAT on costs and the costs are still not considered an investment. That is the case with for instance freelance costs, software as you pay for the licensee, not the ownership.

Assuming the costs made over EUR 450 are regarded investments, then you can qualify for the investment tax credit. You only qualify if you invested more than EUR 2.300 during a calendar year. If you done so the investment tax credit over the amount of EUR 2300 till the amount of EUR 55.248 is 28%.

What does this imply? It implies that you not only deduct from the taxable profit pro rata the 20% write off over the investment. Next to this write off you can deduct 28% of the investment amount exceeding EUR 2.300.

When you invest more than EUR 55.248 the percentage of deduction becomes less and if you invest more than EUR 306.931 you no longer receive an investment tax credit.

Not regarded an investment under the investment tax credit are buildings, ships on which you can live, mopeds, motorbikes, cars (vans and trucks do qualify) and animals.

The year 2013 is going to its end. If you know you need to make investments, then now it is the time to see how you can do that tax wise the best. If you have not made any investments this year yet, then try to postpone the investment till next year. It might be that you exceed the threshold in 2014. If you have already invested in 2013, then try to make the investments this year to be certain you exceed the threshold and therefore create the investment tax credit.

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