If your business needs a car, you can have it registered under the name of the company. However, you can also use your own car for this. Which is the most economical form, depending on the various factors? Consider sales tax, sales tax, and income tax. What is beneficial also depends on exactly what the car is used for in the company or business sector.
Differences in Buying a Home or Business Car
If you want to buy a business car like for example a Honda SUV 2021, you can buy it both personally and for the company. There are tax differences in this choice. If you buy a business car, it will be part of your company’s assets because it is registered under your company’s name. On the other hand, if you use a private car for your business, that car will be your name. The vehicle is part of your private property.
The choice affects how costs are handled in management. For both income tax and VAT, you need to determine the capital to which the car belongs. It’s irreversible like this, so it’s important to think twice in advance.
The decision of company car. The car is part of the working capital
The first option is to buy a company car registered with your company name. This allows you to drive only for your business, so all costs can be accounted for as business expenses. Fuel, VAT, vehicle tax, maintenance fees, parking fees, and insurance can also be deducted. After all, it’s a resource. This is a viable option for those who still have their own car and use it for shopping or vacationing.
Buying a car on behalf of the company does not mean that it cannot be used personally. Anyone who does more than just use a car for work must deal with the problem of addiction.
Sales tax can be deducted from the sales tax paid by the company for business purposes only. You need to calculate VAT for your own business. If you use your company car for personal use, you will have to pay VAT. This amount can be determined in two ways. On the one hand, you can hold a kilometer registration that allows you to calculate VAT through the tax office. In addition, you can calculate 2.7% of the car catalog values, including VAT and BPM (passenger car and motorcycle taxation).