Under which category does the purchase of a trailer and tow bar for my sole proprietorship fall?
As a self-employed person, it is important to record your expenses correctly, especially when it comes to the purchase of a trailer, where the purchase price is likely to be quite high.
In this article, we provide an explanation of how to handle this in accordance with Belgian accounting rules, which cost category it falls under, and how to apply depreciation correctly.
Purchasing a trailer: which type?
The purchase of a trailer for professional use is generally considered an investment. According to Belgian accounting rules, an investment is an expense exceeding €250 that will be used in your business for several years.
Entry in your sole proprietorship: investment cost category
You record the purchase of a trailer under the “investments” category. In your accounting software, you usually select the type “light vehicles”. This also applies to accessories purchased at the same time, such as a tow bar, as these are functionally linked to the trailer.
What about the depreciation of a trailer?
The depreciation period for a trailer amounts to five years.
Please note: it is legally permitted to make your own realistic estimate of the useful life, provided it is substantiated. The tax authorities provide guidelines, but these are indicative.
In the video below, we go through this question from the Dexxter community step by step. View this short explanatory video on our YouTube channel:
Conclusion
The purchase of a trailer for your sole proprietorship should be registered as a investment with a depreciation period of usually five years. Correct registration ensures proper bookkeeping.
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