Deducting costs from your tax return: amortisation

What are company assets ?

caller assets are investments that you use to run your company, and that are not meant for sale. You need company assets to make your products or provide your services. Examples of company assets are :

  • Buildings, machines, vehicles, and inventory such as computers, desks, equipment and tools
  • goodwill, permits and licences

What is goodwill?

A company’s goodwill is a unique brand, patent, recipe, or product, that increases the value of a company. For instance, if you have a unique recipe for bread, and the bread sells so well that it increases your company profit, that recipe is company goodwill. It is difficult to put a precise price on goodwill. Ask a financial advisor for help, if you want to determine your business goodwill.

What is amortization ?

A ship’s company ‘s good will is a unique stigmatize, patent, recipe, or product, that increases the value of a company. For case, if you have a alone recipe for bread, and the bread sells then well that it increases your company profit, that recipe is company good will. It is difficult to put a precise price on grace. Ask a fiscal adviser for help, if you want to determine your business good will. When you calculate your profits, you take into report the buy costs of your company assets : you deduct those costs from your earnings. When you acquire a company asset, you are not allowed to deduct the entire cost in the year of purchase. alternatively, you must amortise your investment. Amortisation, or depreciation, means that you spread the monetary value of buy over the years in which you use the asset. You can deduct a region of the costs in your income or corporate tax render over a numeral of years.

Is the monetary value of acquiring your party asset €450 or less ? then you are allowed to deduct the integral measure from your earnings in your tax render .

different amortization percentages

  • Most investments have a maximum depreciation rate of 20%. The amortisation of the asset takes a minimum of 5 years.
  • Goodwill is depreciated by a maximum of 10% per year.
  • There are different rules for the depreciation of business premises (in Dutch).

Calculation methods for amortization

There are unlike methods for depreciating investments. Ask your accountant or tax adviser which method acting yields the maximal tax advantage for your company .

analogue calculation

The method used most often is linear calculation. When you use this method acting, you write off a fix percentage of the deviation between the purchase monetary value and the residual rate annually. The recipe for linear calculation is : amortization per year = ( cost of purchase – residual value ) / expected duration of use

Example: calculating the amortisation on a laptop

cost of buy You buy a laptop for € 1,000. This is the cost of purchase.

Expected duration of use A minimal duration of function of 5 years is common for amortisations. In 5 years ’ time, your laptop will be outdated, compared to the laptops for sale at that time. consequently, the expect duration of use for your laptop is 5 years. residual rate A 5 year-old laptop is outdated, and its economic prize reduced to nothing. Your laptop ’ s remainder prize is €0.

Amortisation calculation ( € 1.000 – € 0 ) / 5 = € 200 per class You can find more information on how to calculate the disparagement of your assets on the dutch Tax and Customs Administration web site ( in Dutch ) .

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