Four wheels, a roof over your head and just enough room to get yourself and your coffee cup across town. The Birò has become a familiar sight in the city. Compact, electric and so small that you are almost tempted to park it among the bicycles.
Models such as the Opel Rocks are popping up on the streets more and more often too. They look like mini passenger cars, but don’t let their looks fool you. As far as the Tax Authority (Belastingdienst) is concerned, these are not passenger cars but microcars (brommobielen).
That difference may sound small, but from a tax point of view it can be quite interesting. If you buy an ordinary passenger car for your business, it usually does not qualify for the small business investment deduction (KIA). A microcar is a different story. Because a Birò or Opel Rocks is not treated as a passenger car for tax purposes, the purchase can count towards this investment deduction.
Does the total amount you invest in a year fall between €2,901 and €71,683? Then you can deduct an extra 28% of the investment amount from your profit. If you buy a microcar for €15,000, for example, that can give you an extra deduction of €4,200. Of course, that amount won’t simply land in your bank account. It is deducted from your profit, so you pay tax on a lower amount.
Depreciate and deduct
And it doesn’t stop there. If you buy the microcar for your business, you usually put it on the balance sheet as a business asset. You then depreciate the purchase cost over several years. The KIA comes on top of that. So you get both the normal depreciation and an extra investment deduction. What the microcar lacks in space, it more than makes up for in tax benefits.
For entrepreneurs who make lots of short trips, a microcar like this can be very practical. You drive it to clients, glide through busy, narrow streets and don’t have to circle the neighbourhood three times before you find a parking space. Put your company logo on it and it becomes your very own business card on wheels.
Want to know more about the rules for business transport? Read Car, bike or other business transport: what to know.