Tax tips for entrepreneurs
18 juni 2019
Many entrepreneurs travel a lot of kilometers for their work. For example, a handyman or electrician often travels across the country to work at his customers' homes. But a representative or salesperson also often has to drive a lot to reach his customers. Transport can therefore represent a significant cost item for entrepreneurs. You have to buy or lease a car and of course pay the fuel and taxes. But what is the most beneficial thing to do as an entrepreneur, how can you drive as cheaply as possible? On this page we have a number of tax tips for entrepreneurs. For example, we discuss the benefits of financial leasing and the tax benefits of buying a car as an entrepreneur. Hopefully, these tax tips can help you reduce your tax burden.
Benefits of financial lease
Many entrepreneurs choose a financial lease because of the flexibility and the fact that you do not have to pay a large amount at once. If you have concluded a financial lease contract, you can take advantage of interest deduction. You can deduct the interest you pay on the financial lease from your profit using an amortization schedule. In this way you repay on the basis of so-called annuities, which means that you will repay more as the lease contract progresses. Your payments remain the same and because the interest you pay decreases, you pay off more and more. The interest deduction can provide significant annual savings. As a small entrepreneur you can also benefit from the small-scale investment deduction or KIA for short. However, this only applies to vans in financial lease. When you use a financial lease, you can also deduct the depreciation on the car.
Advantages of buying a car as entrepreneurs
The small-scale investment deduction or KIA for short is also applicable when you buy a van as a small business owner. You may then deduct a one-off investment deduction of a maximum of 28% from your income or corporate tax. You can also deduct the VAT on the car because VAT is charged to your customers. You can also deduct the BPM if you use the car for at least 10% business purposes. When entrepreneurs buy a car, you can also use depreciation.
Additional tax and private driving
If you drive 500 kilometers or more privately with your business car every year, you must pay additional tax. This private use of a work car is seen as wages in kind. It is not surprising that this is seen as wages by the tax authorities. After all, you use something from the company privately, for which you would otherwise have had to purchase a private car. If you also have a private car and do not actually need the business car for private use, it is advisable to drive it privately less than 500 kilometers per year. This saves a lot of extra costs in the form of additional tax.
Calculate additional tax
The way in which the additional tax is determined has changed slightly in 2019. Previously, a distinction was only made between electric and fuel cars to determine the additional tax. Since this year, however, the value of the car also plays a role. In principle, there are two different addition percentages: 4% and 22%. If you have an electric car with a list value of up to 50,000 euros, you pay the low rate of 4% additional tax. This rate also applies to all cars that run on hydrogen. The high rate of 22% applies to cars that emit more than 0 grams of CO2 per kilometer and electric cars with a list value above 50,000 euros. The addition percentage is multiplied by the list value to calculate the gross addition. For example, a petrol car with a list value of 30,000 euros pays 22% times 30,000 or gross 6,600 euros in additional tax per year. However, this amount is multiplied by the income tax rate that applies to you. Suppose this is 38.10%, then you pay 6,600 annually times 38.10%, which is 2,508 euros in addition. This amounts to a monthly addition of €209.
Tips for starting entrepreneurs
For starting entrepreneurs, some different rules apply in some areas than for people who have been entrepreneurs for some time. As a starting entrepreneur, for example, you have an important tax advantage when depreciating your company car . You may arbitrarily write off investments for which a small-scale deduction applies. In concrete terms, this means that you can choose the most favorable period to write off the costs. For example, you can divide them over the years in such a way that you get the most tax benefits. Elsewhere on this site, a number of tips for leasing as a starting entrepreneur are discussed in more detail with you.
