Explanation of Private Use of a Company Car
If you have a car registered under your company's name, it's allowed to use this vehicle for private purposes as well. However, you are required to pay VAT on this private use. The amount of VAT depends on how much the car is used privately and whether you maintain a complete mileage log.
Calculating VAT for Private Use
If you keep an accurate mileage log, calculating the VAT for private use is straightforward with the tool available on the Dutch Tax Administration's website. If you don't have a complete mileage log, the VAT will be set at 2.7% of the car's catalog value, including VAT and BPM.
How to book in Informer?
Add General ledger accounts
First, you'll need to create 4 general ledger accounts. To do so, follow the steps below:
Navigate to Settings in the left-hand menu;
Choose General ledger accounts and click on New;
Now create the following 4 general ledger accounts
General ledger 1:
Number: 1518
Description: BTW privé gebruik
Type: Balans
Account type: BTW rekening
VAT section: 1D2 - Privégebruik
General ledger 2:
Number: 2018
Description: BTW privé gebruik
Type: Kosten (winst en verlies)
Account type: Kosten/inkoop/omzet rekening
General ledger 3:
Number: 2048
Description: Tussenrekening BTW privé gebruik
Type: Balans
Account type: BTW rekening
VAT section: 1D1 - Omzet privégebruik
General ledger 4:
Number: 2049
Description: Tussenrekening BTW privé gebruik
Type: Balans
Account type: BTW rekening
Recording VAT for Private Use
Once you’ve calculated the VAT for private use via the Dutch Tax Administration’s tool, you are set to record the VAT in your bookkeeping for the VAT return. To do so, follow the steps below:
Navigate to Advanced in the left-hand menu;
Choose Memoriaal and click on New;
Add the following entry:
Supplemental entry
Journal entry description: VAT private use of company car
Line 1:
General ledger: BTW privé gebruik (nr. 1518)
Description: Free of choice
Debet/Credit: Credit
Amount: Calculated amount (= vat for private use of the company carfrom the "Calculating VAT for Private Use" section)
Line 2:
General ledger: BTW privé gebruik (nr. 2018)
Description: Free of choice
Debet/Credit: Debet
Amount: Calculated amount ( = same amount als line 1)
Line 3:
General ledger: Tussenrekening BTW privé gebruik (nr. 2048)
Description: Free of choice
Debet/Credit: Credit
Amount: Calculated amount (amount to enter in 1d on the vat declaration)
Line 4:
General ledger: Tussenrekening BTW privé gebruik (nr. 2049)
Description: Free of choice
Debet/Credit: Debet
Amount: Calculated amount ( same amount als line 3)
Op de aangifte staan nu de grondslag en de af te dragen BTW ingevuld.
The interim accounts should balance to zero, ensuring they have no impact on your equity.