The dentist costs are not company costs. Obviously you would imagine, but not for this tax advisor who claimed dentists costs as a company costs. Was he right?
Dentist costs are not company costs
Company costs are costs made to run a company. Office rent, stationary, a desk, computer are costs aspects not under debate by the Dutch tax office. Other aspects such as a ships/boats, guns, animals and fines are excluded as costs for a company.
Then we have the freedom of the entrepreneur to allocate as costs what the entrepreneur thinks is necessary to run the company. For instance, if the entrepreneur prefers to drive a Rolls Royce in his 5 kilometer commute every day, the Dutch tax office cannot deny these costs based on the fact a bicycle is cheaper.
However, this is up to a certain line. The line is gray, but a dentist pushed the limits in the past. This dentist purchased an airplane to visit his clients within the Dutch borders. That was for the Dutch tax office a line being crossed and these excessive airplane costs were not accepted.
I have to look good
Our clients often provide receipts of a suit, shoes, hairdresser. All these costs are not business costs. We are countered by the client that these costs were specifically made to look good for the client. They would not wear the suit at home, or would have visited the hair salon weekly if it was not for the clients.
For these costs there is article 3.14 in the income tax act that states costs made to support a certain flair in life as a result of which more business is done, are not accepted as such.
Dentist costs are not company costs – court case
The tax advisor claimed in the 2016 income tax return EUR 2.308 dental costs as company costs. The Dutch tax office denied the costs and the tax advisor went to court. In court the tax advisor could not substantiate what the dental costs could weigh more as business costs then personal costs. As the personal use of the teeth was out used by far over for business purposes, the deduction was denied.
These costs can be denied based on article 3.14 of the income tax act.
Tax is exciting
We think tax is exciting. A business relation that takes care of his or her teeth is also very much appreciated by us during a conversation. A conversation with your tax advisor does not make the tooth brush tax deductible.