{"id":306,"date":"2024-06-18T10:34:51","date_gmt":"2024-06-18T07:34:51","guid":{"rendered":"https:\/\/okservices.ee\/?p=306"},"modified":"2024-10-07T13:31:10","modified_gmt":"2024-10-07T10:31:10","slug":"firma-auto-ja-maksud","status":"publish","type":"post","link":"https:\/\/okservices.ee\/en\/firma-auto-ja-maksud\/","title":{"rendered":"Company's car and taxes"},"content":{"rendered":"
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Company's car and taxes<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Let's check if it is reasonable to have a car under a company name and what are related taxes.<\/span><\/p><\/div>

If a company is buying a car under a company name and using it for \ud83d\ude97 business purposes \ud83d\ude97 only, it is allowed to record all the costs related to the car, such as:<\/div>
\u00a0<\/div>

  • car purchase itself,<\/span><\/p><\/li>

  • repair,<\/span><\/p><\/li>

  • fuel,<\/span><\/p><\/li>

  • etc.<\/span><\/p><\/li><\/ul><\/div>

    \u00a0<\/div>

    If your company is liable for VAT, it is also allowed to deduct VAT in this case for all related expenses and for the car itself.<\/span><\/p><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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    A note regarding full business usage in Transpordiamet should be made in this case.<\/span><\/p><\/div>

    Please note that you will need to have some kind of evidence that proves that the car is fully used for the company's purposes only. Such proof can be GPS reports, travel reports, etc.<\/div>
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    The second option is if the car is also used for \ud83d\ude97 personal purposes \ud83d\ude97 as well.<\/div><\/div>
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    In this case, the VAT return is limited to 50%. Also, fringe benefit taxes need to be paid, which amount is dependent on:<\/span><\/p><\/div>

    \u00a0<\/div>

    • car's age<\/span><\/p><\/li>

    • car's power:<\/span><\/p><\/li><\/ul><\/div>

      \u00a0<\/div>
      for cars younger than 5 years old - \ud83d\uded1 1,96 euros per kW \ud83d\uded1 and<\/div><\/div>
      \u00a0<\/div>

      for the cars older than 5 years old - \ud83d\uded1 1.47 euros per kW \ud83d\uded1.<\/span><\/p><\/div>

      Let's make some calculations, about whether it is reasonable to buy a car (which will be used for personal purposes) under a company name:<\/div>
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      \u00a0<\/span><\/div><\/div>
      Example 1. <\/em><\/strong>Cheaper and older car.<\/em><\/div>
      \u00a0<\/div>

      Let's take Skoda Octavia, year - 2015 (older than 5 years), 110kW, market price - 10 000 euros.

      <\/span>Monthly fringe benefit taxes will be 161.7 or 1 940.4 euros per annum.
      If you had to buy 10k of worth a car with your own funds, you would have needed need to take out dividends or pay yourself a salary.<\/p><\/div>

      Dividend tax would have amounted to \n2 500 euros (20%). Salary taxes vary, and can be 30-70% depending on the income, let's take some average into account (60%) = 6 000 EUR<\/div>
      If the car is planned to be used for a longer period of time, then buying it with personal money can be an option in this case. In case of shorter usage, it will be more reasonable to use the company's funds.<\/div>
      \u00a0<\/div>
      \u00a0<\/span><\/div><\/div>
      Example 2. <\/em><\/strong>A bit more expensive and newer car.<\/em><\/div>
      \u00a0<\/div>

      Audi Q5, year - 2020 (less than 5 years old),<\/span>140kW, market price - 30 000 EUR.

      <\/span>Taxes: 205.8 per month, 2 469.60 per year
      Dividend tax: 7 500 EUR
      Salary taxes: 18 000 EUR<\/p><\/div>

      \u00a0<\/div>
      \u00a0<\/span><\/div><\/div>
      Example 3. <\/em><\/strong>Luxury car<\/em><\/div>
      \u00a0<\/div>

      Mercedes, S class, year - 2020 (less than 5 years), 240 kW, market price - 100k<\/span><\/p><\/div>

      Fringe benefit taxes: 4.2k per year<\/div>
      Dividend taxes: 25k<\/div>
      Salary taxes: 60k<\/div>
      \u00a0<\/div>
      \u00a0<\/span><\/div><\/div>
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      As you see, the more expensive the car is, the more reasonable it is to buy with the company's money. <\/span><\/p><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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      \u00a0<\/p>

      But let's also consider the option of buying with borrowed funds.<\/span><\/p><\/div>

      \u00a0<\/div>
      Let\u2019s say leasing for a Skoda Octavia is 3,000 per year, a special benefit is 1,940.4 euros per year. To pay 3,000 in salary, you will have to pay approximately 1,800 per year, and dividends - 750 euros per year.<\/div><\/div>
      \u00a0<\/div>
      In this example, buying a leased car with personal money will be cheaper.<\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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      And if we take the example of a luxury car, then leasing for a Mercedes, S class is approximately 22,000 euros per year. Taxes on special benefits: 4.2 thousand per year. To pay a salary in the amount of 22,000, you will need to pay approximately 13 thousand taxes, and on dividends - 5.5 thousand taxes.<\/span><\/p><\/div>

      With leasing, a similar situation arises - the higher the leasing amount, the more profitable it is to buy it from the company.<\/div>
      \u00a0<\/div>
      But which option is the most profitable in your particular case - it\u2019s worth making calculations, thinking about the time of car usage, and comparing the options.<\/div><\/div>
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      \u00a0<\/span><\/div><\/div>
      If you need help with calculations, please get in touch.<\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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      <\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

      Vaatame \u00fcle, kas s\u00f5iduautot (M1 kat.) on m\u00f5istlik osta firma nimele ja millised maksud sellega kaasnevad. Kui ettev\u00f5te ostab s\u00f5iduauto enda nime all ja kasutab seda ainult \ud83d\ude97 \u00e4rilistel eesm\u00e4rkidel\ud83d\ude97, siis on lubatud kajastada k\u00f5ik autoga seotud kulutud, nagu n\u00e4iteks:\u00a0 auto ise, auto remont, k\u00fctus, jne. \u00a0 Kui teie ettev\u00f5te on k\u00e4ibemaksukohustuslane, siis on sel […]<\/p>\n","protected":false},"author":1,"featured_media":377,"comment_status":"open","ping_status":"open","sticky":false,"template":"elementor_header_footer","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[30,29,31],"class_list":["post-306","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-maksud","tag-eng","tag-est","tag-rus"],"_links":{"self":[{"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/posts\/306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/comments?post=306"}],"version-history":[{"count":0,"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/posts\/306\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/media\/377"}],"wp:attachment":[{"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/media?parent=306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/categories?post=306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/okservices.ee\/en\/wp-json\/wp\/v2\/tags?post=306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}