You have received on grants to boost your business activities. This is a great incentive for your business growth. But now the question arises: how do you handle this in your accounting?
Which grants should you process in your accounting and which should you not?
It is important to distinguish between the different types of subsidies that may or may not be exempted or taxable:
1️⃣ Fully exempted grants
If it is not a taxable grant, then you really just don’t have to deal with it in your accounts.
2️⃣ Partially exempted subsidies
For the 2024 tax year, this partial exemption amounts to a maximum of EUR 4,680. Any amount above this threshold is taxable.
Say you received a grant of €8,000 from a non-profit organisation. In this case, 4,680 euros would be exempted from tax, and you would only pay tax on the remaining amount of 3,320 euros.
You received on a tax sheet 281.30 from the setting, which states the total amount of the grant. In your tax return, you must fill in the taxable part (after deducting the exemption) under “Part 2, Box XV. Miscellaneous income’.
Please note:
You do not have to pay social security contributions to be paid on this partially exempted subsidy. This will be automatic by declaring the subsidy as recorded above.
3️⃣ Fully taxable subsidies
In this case, subsidies are considered income that is fully taxable. You must therefore declare them in your tax return and social security contributions will also be calculated on them.
Processing subsidies in Dexxter 💪
If it is a subsidy that is taxable, then it is basically just revenue. Then you can possibly book it through reports > income & expenses > manual entry. There, add a general ledger account and choose sales invoices. Then it will show up in your file as ordinary turnover, but that is correct, given that it is taxable. But if it’s not a taxable subsidy, then you really just shouldn’t do anything with it in your accounts. VAT does not apply to it.
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