When the company owns a car and that car is used for private mileage, then at the end of the fiscal year, you have to pay VAT for this private usage. The VAT is 2,7% of the original list-price of that car. Suppose you have a car with a list-price in 2016 of € 30,000.- then you have to pay € 810.- In some cases the VAT-percentage is reduced to 1,5%. Can you please add these two 100% VAT-codes to the standard Dutch VAT-codes, where:
the amount due is shown at line 1d of the Dutch tax-form
the basis on which the VAT was calculated should also be shown on line 1d (in my example € 30,000.-
These tax-forms should be filed and paid January 31 2019.
It would be great if you could add this in due course
If you need further information, don’t hesitate to contact me.
@Hennie, if VAT is usually applied to transactions how would the motor vehicle private usage VAT be accounted for under Manager? It may be entered by journal entry as a liability using a specially created 100% VAT code but what account should the corresponding debit be allocated to?
I assume the private use VAT would not be a tax-deductible expense and the corresponding debit would be allocated to a capital account? If that is the case an immediate workaround may be a journal entry along the following lines:
Dr - Motor Vehicle expenses 30,000 (Excluding VAT)
Dr - Capital Account 810 (VAT not applicable)
Cr - Motor Vehicle Expenses 30,810 (Including VAT 2.7%)
The VAT for “private usage” is a correction on the “deductable VAT”. Therefor it is a business expense and it shouldn’t be allocated to a capital account.
The proper account to allocate the VAT by a journal entry is:
Dr - Motor-expenses 870.- using the 100% VAT-code
Cr - Motor-expenses 870.- no VAT code at all.
That is the way I book it now. I created a 100% tax-code 2,7%
The only problem is that there is a discrepancy between the “draft tax return form” in Dutch “concept-BTW-aangifte” and the tax liability shown on the balance. Reason for that is that Manager doesn’t show this non-standard VAT-code on the report.
Thanks for clarifying how the VAT private usage operates. I do not claim to be an expert on Dutch VAT. If the only effect should be to increase your VAT liability by $870 by reducing the deductible VAT, using a set rate method, I would account for it as follows:
Dr - Capital accounts 870 (No VAT Code)
CR - Motor Expenses 870 (100% VAT)
Tax liability is increased by 870 without affecting expenses and adding the VAT to capital accounts because it is for private use.
The tax summary adds the 870 to the tax liability under Sales, instead of reducing the deductible VAT. Net VAT liability is correct and the tax summary shows the total for 100% tax code.
@tony
You’re making a mistake,
The private usage is a correction on the deductible VAT and therefor it is a business expense and not a capital withdrawal. Tax-law forces me to make a correction, but all motor-expenses are still business expenses so this tax-correction is a business expense as well. There is a difference between a business balance and P/L and a tax-balance and tax P/L
My problem is, that Manager, when creating a VAT tax-report, it ignores the non-standard VAT-codes and that’s the reason why I request Lubos to add two extra codes so that there is no difference between the liability as presented in the balance-report and the tax-report.
Hi Hennie,
I have the same situation as you described above, and a VAT code to cover this situation could be quite convenient.
Way I handle this situation:
I have a group of car expense related accounts
One of these accounts is “BTW Bijtelling privégebruik” .
I make a journal entry to add the 2.7% VAT to this account.
The Q4 VAT tax statement will differ from the draft VAT report coming from Manager.
Differences will be in line 1d (the private usage line), and consequently in the line 5a and 5c (the subtotals).
But then again, the Q4 VAT tax statement has the KOR calculations as well, and this needs to be manually entered anyway.
Hopefully, @lubos will soon have the opportunity to link the new tax code to your country specific VAT report. In the meantime, you may find it useful referring to the generic Tax Summary that includes custom tax codes.
Hi Hennie, thanks for all your efforts! Small question, if a private car is being used for business costs, is the taks rate 1,5%? And must this be allocated the same way you described above in the tax liability statement?
kr
Your question is beyond the scope of this forum. Your question is tax-related and not Manager related. I’ll send you a private message to answer your question.
@lubos
On the vat-form it is called what Frankie replied “Privégebruik” but I would call the code “BTW Privégebruik”…
To make the Dutch VAT complete, it would be great if you could add another 100% VAT code with the name “BTW KOR-regeling”.
The KOR-regeling is a special rule for small business where if their VAT liability is between certain amounts, they don’t have to pay the VAT at all or in some cases part of the liability.
So it is a business benefit/profit and it shown on the tax-report at line 5d.
Kind regards,
@lubos
The new VAT-code “Privé-gebruik” appears also on the "draft VAT-report as reclaimable VAT (Voorbelasting) which is incorrect. See the screenprint.
Could you please correct this.
Kind regards,
