Inventory for rental purposes: what counts as inventory in your accounts?

This question comes up regularly in the Dexxter community: “If I offer rental services (such as bouncy castles, trailers or decorative materials), do I need to declare an inventory in my accounts or on my personal income tax return?”

It’s a valid question, as inventory does have an impact on your tax return. The good news is: if you’re involved in rental activities, you usually don’t have inventory. Below, we provide an explanation of why this is the case and how to handle it correctly.

❓ What does the tax authority define as ‘inventory’?

In Belgian accounting, inventory means:

➡️ Goods you purchase with the intention of selling them later.

You hold the items temporarily (your inventory) in order to sell them. Think of someone who buys T-shirts and sells them in an online shop: these are classic trade goods that belong in inventory.

But here, we’re not talking about inventory. Because for rental activities, such as the hire of bouncy castles, this does not apply.

🏕️ But what if you only rent out items, such as bouncy castles or party tents?

Then we’re not talking about inventory. The items are not purchased for resale, but to be rented out.

For example, you buy a bouncy castle that you use within your business over several years. You own it long-term, and you earn money from it by renting it out time and time again.

The bouncy castles were not bought to sell; they were bought with the intention of renting them out.

You do not need to fill in any inventory in your personal income tax return, because you are not selling goods, but renting them out.

🔎 Conclusion: this is not inventory.

✅ So how do you account for such purchases correctly?

These purchases are therefore not trade goods.

You account for them as:

➡️ Investments (fixed assets)

Why?

• They are not intended for sale
• They are used long-term in your business
• They represent a certain economic value

💡 Example:

You buy a bouncy castle for €3,000. You record this as an investment and depreciate it over 5 years, resulting in an annual cost of €600 in your accounts.

You therefore record these as investments and depreciate them for tax purposes over their economic life, for example 5 years. Would you like to know more about investments and depreciations?

🔄 What if you do end up selling it after a while?

Suppose: after 5 years of rental, you sell the bouncy castle second-hand. Does it suddenly become ‘inventory’?

No. It remains an investment, one that you are now selling. You record the proceeds from that sale as income; it is the capital gain or residual value of an investment.

So even if you sell it later, the statute doesn’t change. You didn’t have any inventory, you didn’t need to include it in your return, and that remains the case.

📌 In summary: what about inventory when renting out?

• 📦 No inventory required: you’re not selling anything, you’re renting out

• 💼 Record as an investment: these are fixed assets, not trade goods
• 🧾 You depreciate investments: this way, you include a portion of your purchase in your costs each year
• 💸 Selling later? That is a sale of an investment, not of inventory
• Do you have questions about your situation? Feel free to ask them in the community or contact our support team.

🎥 View the video: inventory or investment when renting out?

In this video, we use clear examples to provide an explanation on how to correctly record investments when renting out and why this does not constitute inventory: