By Julie van Keulen
What is a current account contract? Is it a particular bank account? Not exactly. A current account appears when a shareholder pays business costs with a private bank account or the other way around.
Tax office audit & current account contract
Would you rather be confident then stressed when the tax authority asks questions during an audit? In that case reading this current account contract article is not a bad idea.
Examples of current account contract situations
A current account contract also comes to light when you think certain costs are business costs and they seem not to be business, but private costs. Or when you start a business with a EUR 0,01 capital and you have to pay the invoice of a tax advisor. What do you do? You probably pay the invoice with a private account and guess what? A current account emerges. The other way around is also possible; there is no balance on your bank account and you are doing groceries. You probably pay with your business card. Another example is when you forgot your business card and pay with your private bank account. Or when you have a drink on an airplane on a business trip. Did you know these costs are private costs?
Time for an easy solution!
The good news is that with some easy steps, you can make sure you will be confident when the tax authority start asking questions. The solution is to make a current account contract: a one-paged contract. Why do you need such a contract? When the tax authority sees a cash flow from the company to you as a shareholder, the authority labels it as dividend or loan. To prevent this, you simply make a contract.
Guess what? As a lawyer, I am excited about contracts! If you want me to make a contract for you, you can contact me, Julie van Keulen.
Sorry for the dashes in the middle of the word tax-is-exciting. Apparently Google has a dirty mind and sees only a three letter word that we refer to when we practice to reproduce ourselves. Anything related to that word is spam, hence this devout solution.