During the last 7 years I have built my composing studio (hardware and software) at the expense of my own company (since a few years a Dutch "BV" (Ltd. / Inc.), before that it was a one-person company/sole trader).
Since I have some moderate royalty income since 1988 (personally) AND I have the intention to once switch from IT consultancy to music, I thought the Dutch IRS would accept this - and indeed, I have not yet had any complaint (well, they simply have not yet investigated my administrations since 1993).
The official description of my company at the Chamber of Commerce not only includes my current IT-consultancy work, but also music production, so I thought today: can I also purchase physical instruments (i.e. not PC's and software) like a good classical guitar, via my company?
I have the feeling that the IRS will look differently at "sole traders" than at Inc.'s with respect to what costs they make...
If I purchase the guitar (thinking of a very good Takamine 132C), I could deduct the 19% Dutch VAT, and write it off (hopefully) in one year. That's a LOT cheaper than buying it in private.
Would this be a debatable purchase? Would the IRS make a difference between an "Inc." and a "sole trader" in this respect?
Last remark: I am starting to publish some library music, so there's another reason for getting this guitar...
I don't know anything about Dutch tax law, but I can tell you a little about my experience in the U.S. My music business has been incorporated (as a "C" Corp) for about 16 years. Every musical expense and purchase has been through the corp, including one of our cars, for which I must keep a mileage log to show business use. However, all of my income has always been directly from music, so there's no question that everything is used in the business as a tool to help generate income.
Your case is a little trickier, since some of your income is from IT and some from music, (though with all our reliance on computers, the two are starting to become one!) This sounds like a judgement call, and you might want to run it by a tax pro. If your IRS is anything like ours and they dissallow it, they could hit you with penalties and interest on the taxes owed. The guy that I use is both a CPA and a tax lawyer, so he's a great source of knowledge. (although I'm sure he knows nothing about Dutch law, either) Maybe you can find someone like that over there?