Claiming sales tax on fuel in the Netherlands

MMillsProjectsMMillsProjects Member Posts: 5

Hello, I am in the Netherlands and am a self employed sole trader. Whilst I cannot register my fuel costs on my private vehicle as an expense, I am allowed to claim back the sales tax on the fuel I use for business related travel. How would I do this? i.e. I want to be able to track the sales tax but NOT include the fuel bill as an expense. Any suggestions anyone? Very grateful if some can help. Mark Mills

Comments

  • ChelseaKChelseaK Administrator Posts: 264 admin

    @MMillsProjects I'm afraid there is no way to account for this in Wave as you would need to add the expense transaction in order to calculate for the sales tax and have it reflect in the reports.

    Unless anyone can think of a workaround? Curious to hear if anyone else has any thoughts about this?

  • MMillsProjectsMMillsProjects Member Posts: 5

    I think i have figured it out.
    I upload receipt as normal.
    Calculate taxes as normal.
    Set as a withdrawal.
    Change category to Owner investment / drawings.
    If my thinking is correct this will show that i have withdrawn my own profit to pay the fuel bill but am also seeing the reclaimable sales tax on the expense registered in wave.
    Appreciate somebody correcting me if this assumption is wrong :-)

  • MyronMyron Administrator Posts: 143 admin

    Hi @MMillsProjects , welcome to the Wave community! It's nice to see you here! Is the fuel bill meant to be a personal expense or a business expense? By categorizing the withdrawal transaction to Owner Investment / Drawings, you are effectively showing a personal expense (fuel bill) being paid with business funds. Any recoverable taxes will still be recorded in your business when this is done.

  • MMillsProjectsMMillsProjects Member Posts: 5

    Hi Myron. Thanks for your reply. In the Netherlands, if I use a personal vehicle for business purposes, I receive a 19c per km deduction on my end of year tax bill. But in addition to this I am allowed to claim the VAT (sales tax) on fuel bills BUT I cannot register the fuel as an expense. This means all fuel I buy during the year is actually a personal expense but i am able to claim back the fuel bill VAT.
    As my business is a small one man business, any profit i make is 'my salary', so my thinking is if i register the fuel bill as an owners drawing, it will allow me to get it into wave in order to register the claimable VAT, but will also show that I am drawing out 'some of my salary' to pay the expense, which i will the of course pay income tax on at end of year. Does this make sense?

    edited July 30, 2019
  • James_HudsonJames_Hudson Administrator Posts: 128 admin

    Hey @MMillsProjects , while it's a bit of a workaround, the solution you've provided does make sense. If this is a personal expense being made with a business bank account, then does, in fact, represent you as the owner paying yourself.

    The solution does make sense to me, and it seems like the most elegant way to handle this in Wave.
    Because there are tax implications to it being executed this way over the course of the whole year, however, I'd also recommend checking in with an accounting professional to ensure that it's completely airtight!

  • MMillsProjectsMMillsProjects Member Posts: 5

    Thanks James, I really appreciate the feedback.
    As I am effectively drawing 'salary' on each of these transactions, plus I will be using 'owners drawings' as a way of showing what i have paid myself throughout the year in my yearly income tax report, I am confident it is airtight, but I will take your advice and check with those who know better than i do :-) Thanks again.

  • MyronMyron Administrator Posts: 143 admin

    @MMillsProjects , I'm happy that see that @James_Hudson was able to provide you with some helpful advice!

  • MMillsProjectsMMillsProjects Member Posts: 5

    Hello, I have found a flaw in my cunning plan.
    Registering taxes against 'owners drawing' transactions renders my 'Sales Tax report' useless, as the Sales Tax report only shows taxes paid on business costs and doesn't include taxes i apply to non business cost categories such as Owners Drawings.
    Perhaps it would be possible to include an option on Sales Tax report to include all 'paid sales taxes' regardless of 'account' ?

  • AlexLAlexL Administrator Posts: 1,380 admin

    Hey @MMillsProjects . You are correct I'm afraid, Owners Investment/Drawings does not appear in the Sales Tax Report as this is assumed that it's a transaction incurred on a personal level therefore doesn't belong to the business.

    There are workarounds to this, like filtering for your Owner Investment/Drawing account in the Account Transactions Report and then calculating these taxes manually, although if you have a lot of transactions categorized to Owner Investment/Drawing then it could take some time.

    I will gladly pass your feedback along to the team for this. To be fully transparent, I can't say whether this is something that they'll be implementing anytime soon, but I'd be happy to let them know your feelings and your request.

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