At the end of each financial year, the company must determine the amount of its taxable income and send it to the administration. The expenses incurred by the company and recorded in the accounts are not necessarily all deductible from the tax result, some can therefore be reintegrated.
The entrepreneurs’ corner offers you a reminder on the conditions for deducting expenses as well as a list of the main expenses not deductible from the company’s tax result.
- Expenses not deductible from the tax result
- Reminders of the expense deductibility rules
In order for an expenditure to be allowed as a deduction from the tax result, it must:
- Be displayed in the interest of the company,
- Results in a decrease in the company’s net assets,
- Be justified by an invoice or other document in lieu thereof,
- Either recognized during the year for which it was incurred,
- And not be excluded from the right to deduct by a tax law.
This principle applies to operating charges, financial charges, exceptional charges, depreciation and provisions.
Non-deductible expenses related to passenger vehicles
Part of the expenses related to the acquisition or leasing of passenger vehicles are not allowed as a deduction from the tax result.
- For vehicles purchased by the company , the part of the depreciation of vehicles relating to the fraction of their acquisition price including tax exceeding 18,300 euros, or 9,900 euros for vehicles emitting more than 200 grams of CO2 per kilometer.
Example: the company buys a passenger vehicle with a CO2 emission rate of 150 g / km for an amount including VAT of 30,000 euros. The vehicle is depreciated over 5 years in the accounts, i.e. a depreciation of 6,000 euros per year (30,000 * 20%). For tax purposes, the company can only deduct 3,660 euros (6,000 * (18,300 / 30,000)), the remaining 2,340 euros constitute a non-deductible charge from the tax result. Make use of the Tax calculator for the best results here.
For vehicles hired or leased by the company, the principle is the same: the part of the depreciation normally applied by the lessor on the purchase price including tax of the vehicle and which exceeds the above limits is not deductible from the tax result.
Example: the company rents a passenger vehicle with a CO2 emission rate of 250 g / km, with an acquisition value including tax of 30,000 euros and a useful life of 5 years. The rent is 600 euros per month. For tax purposes, the non-deductible part of the rents is equal to 4,020 euros per year ((30,000 – 9,900) / 5). Of the 7,200 euros in rent paid per year, the company can therefore only deduct 3,180 euros from its taxable income. However, maintenance, repair, insurance and fuel expenses incurred for these vehicles are deductible.