Company car transferred to private assets VAT
January 28, 2021 | 40,00 EUR | answered by Steuerberater Peter Jansen
At the start of my self-employment, I transferred my car from personal assets to business assets. After acquiring a van, I transferred the car back from business assets to personal assets. I recorded this transaction with an estimated fair value of €2500.
I have read that there is no VAT payable when transferring assets to personal assets, only when selling them.
Now the tax office is demanding VAT payment. According to them, a withdrawal from business assets for purposes outside the company is to be treated as a sale for consideration.
This doesn't seem right, does it? If I continue to use it privately and had previously withdrawn it from my personal assets, should I now have to pay VAT?
The tax office also wants proof of the €2500 fair value. However, I had read that it is permissible to estimate this oneself. What can I do regarding the fair value and the lack of proof in the form of a valuation report? The car was old and fully depreciated. I wouldn't have been able to get more than €2500 for it on the market.
Dear inquirer,
I am happy to respond to your question as follows:
The entrepreneur can fully allocate a capital good that he acquires for mixed use to either the entrepreneurial or non-entrepreneurial sector, or choose a proportional allocation to the respective areas. The allocation is regularly demonstrated by the utilization of input tax. If an input tax deduction is not possible, other evidence must be used. An indication of a complete allocation to the entrepreneurial sector, for example, is the taxation of private use. If the taxpayer withdraws the capital good from his business before selling it, this withdrawal is not subject to tax.
If a vehicle is purchased without input tax deduction, for example, from a private individual as in the present case, and the vehicle is withdrawn before sale, both the withdrawal and the (private) sale afterwards are not subject to VAT. The same applies in the case where the taxpayer has not purchased, but instead has incorporated it into his business, i.e. allocated it to the business assets.
In my opinion, the VAT assessment is not applicable due to this procedure. Please inform the tax office of this, referring to the Federal Fiscal Court decision of 31.01.2002 - V R 61/96, BStBl II 2003, 813.
You must present the determination of the fair market value to the tax office. This can often be done by referring to corresponding vehicle offers on the relevant online sales portals. If it is a common vehicle, I believe a comparable vehicle can be found on the market. This value should then be adopted. An actual vehicle appraisal by an appraiser is of course possible, but expensive.
I hope that my explanation based on the description of the situation was helpful.
Best regards,
Peter Jansen
Tax Advisor
