Buying studies, works, services

Are you paying a consultant for advice, a contractor for works on your practice or an expert for a market study? Then you’re supporting the growth of your business, and these costs are tax-deductible as business expenses.

Which services, works and studies are deductible?

Think, for example, of:

• Services: your accountant, a lawyer, a consultant, a marketing agency, a photographer for your website, a freelancer you bring in…
• Works: the renovation or fitting-out of your office, practice or workshop, electrical or painting works in your professional space, maintenance of your business premises…
• Studies: a market analysis of the country you want to export to, a feasibility study, a study by an architect or engineer for your business premises…

The golden rule: a clear professional link

The cost must have a clear link with your professional activity. Works in your private garden that your clients never see? That’s a private cost, not a business expense. On the other hand, freshening up the waiting room of your practice or repainting your home office is professional.

For works on a home that you use partly privately and partly professionally, you only deduct the professional part, for example according to the percentage of your home office. Works that only improve your private part remain entirely private.

⚠️ Don’t raise suspicion with the tax authorities through vague invoices and descriptions. Make sure every cost is backed up by supporting documents and a clear professional purpose.

Always ask for an invoice

Have everything invoiced, with your company name and VAT number. Without a valid invoice you cannot reclaim the VAT, and you’re in a much weaker position in the event of an audit. Also ask for a clear description of the services or works provided on the invoice.

What about VAT: 6% or 21%?

Services and studies fall under the standard rate of 21%. For works on immovable property, the rate depends on the building:

• 6%: renovation works on a home that is more than 10 years old and used exclusively or mainly as a private residence (an incidental professional part, such as a home office, is not a problem).
• 21%: new construction, and works on buildings used exclusively or mainly for professional purposes (such as an office or practice).

💡 Are you subject to VAT and do you file periodic VAT returns? Then the contractor invoices works on immovable property under the reverse charge mechanism: no VAT appears on the invoice and you account for it yourself through your VAT return. You can immediately deduct the professional part of that VAT in the same return.

Deduct or depreciate?

Services and studies are ordinary business expenses: you deduct them in full in the year itself. Major works, such as a renovation of your practice, are an investment: you depreciate them over several years, according to the lifespan of the works. This article explains exactly how depreciation works.