Income from sale of movable property

What it means

Income from the sale of movable property is an individual's income from selling a car, furniture, electronics, tools or other items. For items that were never business assets it is generally exempt, so an ordinary sale of personal belongings through an advert is not taxable.

It is different for items a sole trader used in the business and recorded as business assets. Selling them while in business produces business income. After an item is removed from business assets, the law sets periods during which a sale is still taxable, and only afterwards can it be exempt.

Where the income is not exempt and is not business income, it is usually taxed as other income. Documented costs of acquiring the item can be deducted, and the income is reported separately in the personal income tax return.

How it works in practice

When selling a car a sole trader used in the business, check when it was recorded as and removed from business assets and how expenses were claimed. That determines whether the income falls into the business tax base, counts as other income or is exempt.

Repeatedly buying and selling items for profit, such as buying goods to resell online, is no longer selling personal belongings but doing business. It requires a trade licence, and the income is taxed as business income with no exemption.

For larger amounts it pays to keep documents on the original purchase and the sale. If the tax authority questions whether the item was private, the sales contract, the advert and proof of origin help establish the exemption.

What to watch out for

The exemption does not apply to all movable items in the same way. Different rules govern business assets and some special cases, such as selling an item that was rented out. Before selling an expensive item linked to a business, it is wise to check the rules.

Online marketplaces now have new duties to report sellers' income to tax authorities. Anyone selling on a larger scale should expect the data to reach the tax office and be able to explain why the income is not taxable.