Use of company property for personal needs - options

Use of company property for personal needs - options

 

Question:
Hello!

I have a property in the name of my company, which, however, I want to "get out" of it and stay for family use. What are the options? Can it be done with a donation?

Thanks in advance!

 

Answer:

Hello,

The company can either sell the property or donate it.

When selling the property you must keep in mind that if the Company is registered for VAT you may owe VAT. If the Company is not registered for VAT, such registration may be required. Also, depending on the book value of the asset and the sale price, it is likely that you will make a profit and, accordingly, at the end of the year you will owe profit tax. Notary fees will also be due for the filing, as well as local taxes and fees.

In the case of a donation, we assume that the company will donate it to you or your relative. In this case, you need to hire an appraiser to appraise the property. Based on this assessment, you will have to pay local taxes and fees, as well as notary fees. If the Company is registered for VAT and a tax credit was used upon its acquisition, you will have to return part of the used tax credit, depending on the time for which the property was owned by the Company. Please note that this type of donation and the costs associated with it will be unrecognized for the Company costs and will not reduce the financial result.

There are other variants in which the property can be used by persons other than the Company, without the property having to leave the Company:

- The company to rent the property to the persons who will actually use it. In this way, the Company will generate rental income, which will affect the realized annual profit and the tax due.

- The company to declare personal use and not to recognize part or all costs related to the property. This will also affect the realized annual profit and, accordingly, the tax due, as the expenses that are declared for personal use will not be recognized for tax purposes.

These are the options. Who will be the most profitable depends on many factors - book value of the property, valuation of the property, when it was purchased, whether the company is registered for VAT, whether a tax credit was used for the purchase, the value of local taxes and notary fees, etc. .n.

We hope we have been helpful to you.

Greetings!