You can run a business at the headquarters, abroad, as well as in your own apartment. While in the case of a company headquarters in a separate building or field work, the settlement of costs related to the maintenance of the seat and business trips is relatively simple and clear, running a business in your own apartment is guided by slightly different rules and settlement should be carried out in accordance with the guidelines contained in special regulations.
Renting an office, premises or the entire building for business purposes requires concluding a contract and invoicing. The entrepreneur receives invoices for the use of the premises or building, which he can enter in full as tax deductible costs, because they actually constitute these costs. There is no doubt here that the expenditure incurred is related to generating profits or securing their source. Therefore, the matter is simple and straightforward.
In the case of running a business in the field, you must register the car intended for business purposes, set up appropriate registers, including mileage register, and settle the costs related to travel (fuel), as well as maintenance and servicing of the vehicle (purchase of oil , coolant, washer fluid, car renovation and repair). All incurred expenses should be documented with purchase invoices, which is the basis for introducing these expenses into tax deductible costs. In this situation, the matter is also simple and unequivocal and does not require any special additional explanations.
The situation is slightly different when the business is conducted in the apartment where the entrepreneur lives. Complications are introduced by the fact that the same premises are used for private and business purposes. It is difficult to judge when an entrepreneur is simply a tenant in a given building and when he is an entrepreneur.
To facilitate and introduce a kind of law and order, the legislator introduces guidelines that are to help in making this type of settlements.
When deciding to register your own business in your own apartment, you must first prepare a special statement in which it will be clearly specified what part of the apartment is used for business purposes.
After determining what percentage of the flat will be used for business purposes, you can start determining and determining the costs that can be accounted for as tax deductible costs, and which must remain private costs of the entrepreneur.
The part of the apartment that will be used for business purposes should be expressed in meters. Then, the percentage share of the company space in the total apartment is calculated. When calculating the rent for this flat, the same percentages apply as when determining the area. Therefore, if 15% of the flat area is used for business purposes, then 15% of the rent can also be included in the tax deductible costs.
A similar principle can also be used for utility billing. Of course, you can set up separate meters and use them for billing utilities, but it is expensive and not very beneficial for the entrepreneur. The use of the percentage converter is more convenient, simpler, less time-consuming and financially more beneficial for the entrepreneur himself.
Running a business in your own apartment is a way to save money – you do not have to incur costs related to renting an office, but at the same time, it does not exclude the generation of business costs that are needed by entrepreneurs to lower the tax base.
The rent and utilities must be paid anyway, so if these costs can be included in the costs of the business, it is a favorable and convenient situation at the same time.