Use of company assets for the owner's personal needs

In practice, it often happens that a business owner uses the assets or services of their own company for personal purposes – and many make a serious mistake here. What may seem like “their own thing” at first glance, in the eyes of tax regulations, is income – and taxable.

The Law on Personal Income Tax clearly stipulates: when a business owner uses company money, goods, services, or any other form of company assets for personal needs, it is treated as income from capital. The same principle applies when the company sells something to the owner at a significantly lower price than the market price, or lends them an apartment, car, or trip – without compensation or for a symbolic amount. Such income is taxed at a rate of 15%, without the obligation to pay social security contributions.

The law makes a clear distinction between regular dividends (which are paid based on a decision on profit distribution) and situations where the owner “on their own” uses the company’s assets. There is no decision, no distribution – only the obligation to pay tax.

A particular challenge arises when the owner is also employed or a director without a labor contract. In these cases, tax authorities may assess that it is not income from capital, but rather salary or another form of income – which brings additional obligations, such as contributions for social security. Here lies the core: the purpose and circumstances determine how the income is interpreted.

Another important point – the moment when the tax obligation arises. For example, if the owner uses the company’s business card in a restaurant, and it later turns out that the expense was not business-related, the tax obligation arises on the date of the transaction, not when the mistake was discovered.

Not everything the “owner takes” is automatically taxable – but anything taken must have a clear trace, documentation, and a business purpose. Otherwise, it becomes a form of hidden income. Tax inspectors will look at the actual situation, not how the transaction was formally presented.

Therefore, it is important to know: if you, as the owner of the company, use anything from the business assets – you may just be creating income for yourself that needs to be reported and taxed.

Because the company is not a piggy bank. And the law does not forgive.

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