As a freelancer (‘zzp’er’), you’re always reachable. Your mobile phone is, therefore, an indispensable tool. But can you simply register your phone as a business asset? And what about the VAT, the costs, and private use? Many entrepreneurs have doubts about this.
Good news: a business phone can certainly offer tax advantages! However, there are certain rules you need to comply with. In this article, we’ll explain exactly how it works. We’ll delve into the different purchase options, VAT recovery, how to depreciate your phone, and the rules for private use. And good to know: Kees de Boekhouder can support you with this, so you don’t have to worry about the numbers.
When can a phone be a business asset?
You can register a phone as a business asset if there is sufficient business use. Business use includes, for example, contact with clients, suppliers, or online work. It is important that you can demonstrate and record the business use of your phone.
We distinguish between:
- Fully business use: You use the phone 100% for your company. This is rare, as almost everyone occasionally makes a private call or checks social media.
- Mixed use (business/private): You use the phone for both business and private purposes. This is the most common situation. The general guideline is that business use must be at least 10% for you to register a phone as a business asset.
Purchase options: SIM-only, separate phone, or phone with subscription
There are different ways to purchase a phone for business, each with its own tax rules:
- Business SIM-only: You already have a device and only take out a business SIM-only subscription. The VAT on the subscription costs may be deductible proportionate to business use.
- Buying a separate phone for business: You buy a separate device and optionally take out a private SIM-only subscription. If the purchase price of the device is above €450 (excl. VAT), you must depreciate it (see also Phone depreciation: when and how?). The VAT on the purchase is deductible proportionate to business use.
- Using a private phone for business: You continue to use your private phone for your business. In this case, only a portion of the subscription costs is deductible (proportionate to business use); the device value itself is not.
- Phone with subscription (bundle): You purchase a phone including a subscription through your company. The monthly costs are often higher, but the device is included. The VAT on both the device and the subscription is deductible proportionate to business use.
VAT recovery on phone (device and subscription)
The VAT on both the phone device and the subscription is deductible, but only for the ‘business’ part.
- Fully business use: Is the use 100% business? Then you can reclaim the VAT in full. In this case, it is preferred that the invoice is actually in your company’s name.
- Mixed use: For mixed use, you must apply a private use correction. You estimate what percentage of the use is business. For example, if you use the phone 70% for business and 30% for private, you can reclaim 70% of the VAT paid. This correction can be applied annually or monthly.
Phone depreciation: when and how?
A commercially purchased phone device is a business asset (‘bedrijfsmiddel’). Specific rules for depreciation (‘afschrijving’) apply to business assets:
- Devices > €450 (excl. VAT): If the purchase price of your phone is €450 exclusive of VAT or more, you must depreciate the device. This means you do not deduct the costs all at once, but spread them over the economic lifespan of the device. For phones, this is usually 5 years. Each year, you then deduct 20% of the purchase price excl. VAT from your profit. These are called depreciation costs.
- Devices < €450 (excl. VAT): Is the purchase price less than €450 exclusive of VAT? Then you must deduct the amount all at once as direct costs in the year of purchase.
Example: You buy a business phone for €600 (excl. VAT). You depreciate it over 5 years. Each year, you can then deduct €120 (€600 / 5) from your profit.
Pro tip: Sometimes different small investments can collectively form one business asset. For example, if you buy a laptop for €350 along with a monitor for €150, a mouse for €15, and a keyboard for €25, this together forms one business asset of €540. This means you must spread the depreciation over 5 years.
Using a private phone for business
Many freelancers (‘zzp’ers’) choose to also use their private phone for business. This is possible, but the tax rules are more limited than when you register a phone as a business asset:
- Subscription costs deductible: You may deduct a reasonable percentage of the subscription costs as business expenses. A commonly used percentage is 75%.
- Device value not deductible: The purchase value of the phone itself is not deductible, as it is a private possession.
- Demonstrate usage: It is advisable that you can demonstrate business use, for example, through an overview of your call minutes or data usage, should the Belastingdienst request it.
In summary
Your phone is essential for your business, and fortunately, you can process its costs in a tax-smart way. Whether you choose to register a phone as a business asset (‘telefoon op de zaak’) or use your private phone for business: correctly processing VAT, depreciation, and subscription costs is crucial for your financial overview and to avoid surprises.
Are you unsure what you can deduct or how best to process your phone costs? Perhaps a personal bookkeeper is for you! Schedule a free introductory meeting with Kees de Boekhouder. We are happy to advise you.
FAQ
Can I use my private phone for business and deduct the costs?
Yes, you may deduct a reasonable percentage (often 75%) of the subscription costs as business expenses, provided you can demonstrate business use. The purchase value of the device itself is not deductible.
How often can you buy a business phone?
You can buy a business phone when it is necessary for your business. Devices of €450 (excl. VAT) or more must be depreciated (usually over 5 years), meaning you spread the costs over that period.
Are the costs of a phone subscription deductible?
Yes, the business costs of a phone subscription are deductible, proportionate to the business use. The VAT on the subscription is also deductible for the business portion.
What about the VAT on my phone and subscription?
The VAT on both the device and the subscription is deductible proportionate to the business use. For mixed use, you must apply an annual or monthly VAT correction for private use.
Over how many years do I have to depreciate a phone?
A phone device with a purchase price of €450 (excl. VAT) or higher is usually depreciated over 5 years. Devices of €450 or less must be deducted as a one-off expense.
What is the best option: using a private phone for business or registering a phone as a business asset?
This depends on your situation. If you use the phone extensively for business, registering it as a business asset with deductibility of both the device and subscription may be more advantageous. For limited business use, keeping the phone private and deducting a portion of the subscription costs is often simpler. A bookkeeper like Kees de Boekhouder can advise you on this.
