Bringing private belongings into your business: value, depreciation and VAT

Contributing: from private to business

Contributing means moving something you own privately into the assets of your business. No money changes hands: in your books you put the asset on the balance sheet and record the counter value as a private contribution. If you do it at the start, everything goes on your opening balance. It can also happen later: if after a year you start using your private camera for assignments, you bring it in at that moment, at the value of that moment.

Not everything must go to the business, and not everything may. If you use something more than 90 percent for business, it must belong to your business. If you use it less than 10 percent for business, it stays private. In between you have a choice, which you make with the first entry and cannot simply reverse later. The rules for that choice are set out in business or private assets.

The value: what it fetches now, not what you once paid

You contribute at market value: the amount the item would fetch today if you sold it to an arbitrary buyer. So that is not the purchase price of three years ago. Substantiate the value with two or three listings of comparable items in the same condition, take a dated screenshot and keep it with your records. For a laptop or drill that takes ten minutes.

You depreciate that value, usually straight-line and with a residual value. For tax you may depreciate at most 20 percent of the value per year, even if the item will only last another two years; if it breaks down sooner, you write off the remaining book value in one go at that moment. How that works is covered in depreciation: straight-line or declining. If the value is below € 450, you can usually expense it immediately.

No VAT refund and no investment deduction

You cannot reclaim the VAT you paid back then when you contribute an item. You bought it as a private individual, and the invoice is in your private name. That differs from things you bought shortly before starting with your business in mind: that VAT you can often reclaim, see reclaiming VAT on costs before your start. The difference lies in the purpose at purchase: a laptop you bought for home three years ago is a contribution, a laptop you bought for your business a month before registering is a start-up cost.

The small-scale investment deduction does not apply to contributed items either. That deduction is meant for assets you acquire from someone else, not for what you move over from your own private assets. So do not count contributed items towards the investment deduction threshold. If you buy new equipment in the same year, only that new purchase counts.

The car: contribute it or keep it private

With a passenger car, contributing is rarely obvious. Put it on the business and you deduct all car costs, but drive more than 500 private kilometres a year and a benefit in kind applies. That benefit is based on the original list price, not the current value, which quickly makes an older car expensive as a business asset. Only for cars older than sixteen years does the youngtimer scheme apply, with a benefit in kind of 35% of the car's current market value. Keep the car private and you claim € 0.25 per business kilometre, and that is it.

A van or trailer is different: you usually use it almost entirely for business, so you often do contribute it. Even then the VAT on the original purchase cannot be recovered, but the VAT on fuel, maintenance and repairs can, with a correction for any private use. Unsure about the car? Work out both options with buying, leasing or driving a private car.

Frequently asked questions