Internet invoice for the private data of the entrepreneur
Choosing your own apartment as a place of business is very common among entrepreneurs. Running a business in your own home is associated with its use also for business purposes, and expenses related to running a business, including the Internet, can be classified as corporate costs. But what to do when the invoice for the Internet is issued for the private data of the entrepreneur?
Activity in an apartment and company costs
Entrepreneurs may include expenses related to the operation of a private apartment, but not in full. Expenses should be divided into those related to the conducted activity and expenses of a personal nature. Then, in order to settle the costs of running a business in an apartment (e.g. rent, service charges), first of all, it is necessary to separate the part intended only for running a business, which the taxpayers determine on their own and they are responsible for the proportion adopted.
The proportion factor is determined in accordance with the percentage of the part devoted to business activities in the total house owned.
Mr. Piotr has an apartment with an area of 60 m2. For the purposes of his business, he allocated one room, occupying an area of 15 m2. The percentage of a room in the whole apartment is (15 m2/60 m2) * 100% = 25%.
Therefore, Mr. Piotr can classify all operating costs of the flat as company costs in accordance with the equation COST * 25%.
Importantly, the settlement of the flat maintenance costs according to the above-mentioned proportion is also possible if the entrepreneur decides not to include part of the flat in the fixed assets register.
If a part of an apartment (e.g. a room) is used both for private and corporate purposes, it is not possible to include the operating costs of the apartment even if calculated on the basis of the proportion.
If we decide to run a business in an apartment and we will settle operating expenses, it is not only necessary to designate a part of the apartment intended solely for business purposes. An apartment as a place of business should be reported on the CEIDG-1 form.
It is also connected with the necessity to notify the commune office of a specific area of premises used for business purposes for the purpose of possible taxation with real estate tax provided for companies (the decision belongs to the commune).
Internet invoice for private data
If the business activity is conducted in the private premises of the entrepreneur, the invoice for the Internet, especially when it is issued for the entrepreneur's private data, may raise doubts. It is possible that access to the network is also used for private purposes. Therefore, it is assumed that internet invoices issued to the entrepreneur's private data should not be booked as tax deductible, as it could, and in fact would certainly be, questioned by the tax authorities.
Internet expenses, as long as they fall within the definition of cost, i.e. were incurred in order to generate income, preserve or secure its source, may be recognized as a tax deductible cost. The burden of proving such a relationship reliably always rests with the taxpayer. Therefore, it is assumed that the best solution is to sign a separate contract only for the company. Then the entrepreneur has the right to include the entire Internet invoice as tax deductible costs (provided that the access to the network is used only for business purposes).
To sum up, the expenses related to running a business in a private apartment on the basis of an invoice can be included in the tax costs by the entrepreneur. However, when it comes to an internet invoice issued to the taxpayer's private data, it should be borne in mind that this type of cost is often questioned by tax authorities. Therefore, it would be best to sign a separate contract for the company.