If you want to take an asset owned by a limited company (e.g., a phone, computer, etc.) into your own use (i.e., purchase it), it is possible under certain conditions.
The company and its shareholder can make agreements between themselves, such as purchase, lease, and loan agreements, in the same way as with external parties. In these agreements, the conditions must follow those that independent parties would adhere to. This means that the terms of the agreement must be in line with normal business practices and valued at fair market value. It is recommended that all agreements be made in writing.
If the limited company sells assets, goods, or services to its shareholder at below-market prices or if the shareholder sells to the company at above-market prices, this pricing deviation results in hidden dividends. The tax consequences of hidden dividends can be significant.
If the shareholder wants to transfer assets to themselves so that the value of the asset is directly transferred to the Shareholders' Equity (SVOP) (in which case no money is exchanged in the transaction), this is also possible. An SVOP investment requires a board meeting and the creation of minutes. A regular sales agreement must also be created for the phone sale, once the phone is first valued at fair market value.
When the shareholder buys the phone at fair market value, it is considered a normal purchase and does not result in any tax consequences for the shareholder personally. However, the sale of the phone will increase the company's revenue, which in turn affects the amount of taxable income for corporate tax purposes. Additionally, the company will need to pay VAT on the sale.
Fair market value is an economic term that refers to the price of a good or asset in the market at this moment in time. The fair market value is the amount that a buyer is willing to pay, and the seller is willing to accept for the good or asset in open and functioning markets.
For more information on this, you can visit, for example, the Taxpayer’s website.