THE DIRECTOR USES HIS OWN CAR FOR OFFICIAL PURPOSES: HOW TO MAKE EXPENDITURE?

 Frequent situations are cases when the company does not have on the balance sheet (ownership) of certain property, but its officials use them for official purposes. Such property may be, in particular, a vehicle.

 That is, the director or another person uses his own property for official purposes, but can not make official expenditures for its operation, repair and so on. Therefore, the company cannot reduce its own income by such pre-tax expenses. However, there are a number of legal opportunities for non-cash expenditures on such property from the current account of the legal entity. For clarity, take for example a vehicle owned by the head of a legal entity and used for business purposes.

 To do this, in practice, the situation is as follows: enter into a loan agreement for the vehicle (in fact, it is free rent). According to Article 827 of the CCU, a loan is that one party transfers the other thing free of charge for use within a certain period. The parties to such an agreement are the lender and the user.

 A prerequisite for the legality of expenditures for the operation and repair of such a vehicle is the signing of the act of acceptance of the vehicle. Otherwise, when the State Tax Service of Ukraine conducts an audit, such expenses will be considered unreasonable and the tax liability will be added. It is also necessary to provide in the contract provisions on free of charge of such transfer, for avoidance of ambiguity at interpretation of provisions of the contract.

 Part 4 of Article 828 of the CCU provides for the usual written form for a loan agreement for a land self-propelled vehicle. The current legislation of Ukraine does not contain the above definition, but after carrying out a systematic interpretation, it can be concluded that the car is a land self-propelled vehicle. Thus, the contract does not need to be notarized, as the subject of the contract is a vehicle, but this can be done at will. Then the right to use the vehicle passes to the company. In this case, you can without a doubt make expenses for repairs, fuel, etc. from the current account of the enterprise.

“ It should also be noted that the director cannot enter into an agreement with himself, as such an agreement will be declared invalid in court in the future. That is, you need to issue an internal power of attorney to one of the employees who will sign the loan agreement and the act of transfer on behalf of the company. "

 In accounting, such property is placed on the balance sheet on account 01 "Leased non-current assets". The company receives only the right to use the vehicle and does not lose ownership of the owner, ie the director.

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