WHAT IS MEANT BY ADVANCE?
The advance allows a reduction in the rental fee against the advance payment of part of the capital; in fact, corresponding to a percentage between 10% and 40% of the car’s list value, a monthly fee is proportionally calculated which takes into account the remaining financial portion and the services included. The amount paid by the customer will be invoiced by applying value added tax and constitutes the financial portion of the fees.
WHAT IS MEANT BY SECURITY DEPOSIT?
It is an interest-free deposit established on a per-order basis. The lessor has the right to determine the size of this deposit without any specific limit other than that which can be derived from the general principles of proportionality with respect to the interest it intends to pursue or the guarantee of fulfillment of the obligations to pay the rental fee and ancillary charges . The amount paid by the customer will be invoiced outside the scope of art. 2, paragraph 3, letter a) Presidential Decree 633/42 and returned upon expiry of the contract.
WHO IS ENTITLED TO FULL DEDUCTIBILITY OF NLT COSTS?
Vehicles used for public use;
Vehicles used exclusively as instrumental goods for the company’s activity.
WHAT IS MEANT BY INSTRUMENTAL VEHICLES?
The vehicles are instrumental to the company’s activity only to the extent that they are essential to its carrying out, so much so that the activity itself could not be carried out without them (Circular of the A. delle E. n. 48/E – III – 17104 of 10 February 1998)
Deductibility
Deductibility
Rent
Services
Rent
Services
100%
100%
100%
100%
HOW DOES THE DEDUCTIBILITY CHANGE IN CASE OF NON-INSTRUMENTAL USE OF THE VEHICLE?
These are all cases in which the vehicle cannot be considered instrumental to the business activity (i.e. indispensable) but is at its disposal (Art. 164 paragraph 1 Presidential Decree 917/1986 – TUIR).
Deductibility
Deductibility
Rent
Services
Rent
Services
20%
20%
40%
40%
*Up to €5164.57 With annual adjustment and limited to the single vehicle
WHO IS ENTITLED TO PARTIAL DEDUCTIBILITY OF NLT COSTS AND WHAT DOES IT CONSIST OF?
Vehicles granted to commercial agents and representatives, i.e. those who undertake, on a permanent basis and for remuneration, the task of promoting contracts in a specific area (art. 1742 of the Civil Code), making use of their own independent organization and at their own risk. The agent assumes the name of commercial representative when, in addition to promoting the conclusion of contracts, he also has the power to conclude them in the name and on behalf of the person in whose favor he performs his work.
Deductibility
Deductibility
Rent
Services
Rent
Services
80%
80%
100%
100%
*Up to €5164.57 With annual adjustment and limited to the single vehicle
Vehicles granted to professionals or practitioners of art and profession on an individual basis; this is defined as someone who, making use of a specific qualification, carries out intellectual activities without having employers and with a minimum use of people, means and capital (Art. 2222 et seq. of the Civil Code). An entrepreneur is anyone who professionally carries out an organized economic activity for the purpose of producing or exchanging goods or services (Art. 2082 et seq. of the Civil Code)
Deductibility
Deductibility
Rent
Services
Rent
Services
20%
20%
40%
40%
*Up to €5164.57 With annual adjustment and limited to the single vehicle
Vehicles granted to a simple company or association. A simple company means a partnership which can only carry out non-commercial activities and is registered in a special section of the business register (articles 2251 and 2290 of the civil code). The association, on the other hand, is a non-profit organization made up of a group of natural or legal persons linked by the pursuit of a common purpose (art. 14 et seq.).
Deductibility
Deductibility
Rent
Services
Rent
Services
20%
20%
40%
40%
*Up to €5164.57 With annual adjustment and limited to the single vehicle
QUANDO SI VERIFICA L’USO PROMISCUO?
Promiscuous use occurs in cases where the means of transport is used both for work purposes and for personal needs. (Resolution of the Ministry of Economy and Finance of 20 February 2008, n. 6/DPF). We speak of mixed use when the employer assigns the vehicle to a specific employee for the purpose of carrying out work activities and has also allowed personal use of the same
Deductibility
Deductibility
Rent
Services
Rent
Services
70%
70%
40%
40%
In the event that the vehicle is given for mixed use to an employee for a period shorter than the majority of the tax period (<180 days + 1) the deductibility of the cost is as follows:
Deductibility
Deductibility
Rent
Services
Rent
Services
20%
20%
40%
40%
*Up to €5164.57 With annual adjustment and limited to the single vehicle
WHAT ARE FRINGE BENEFITS?
In all cases of mixed use (and therefore use of the vehicle for both work purposes and personal needs) the employee benefits from remuneration in kind (fringe benefit) which helps to form income and increase the tax base.
Therefore, an amount calculated by multiplying the cost of operating the vehicle per kilometer (ACI tables) by a flat-rate annual mileage of 4,500 km (30% of 15,000 km) must be included in the pay slip. (Art. 51 paragraph 4 letter a) of the TUIR)
The ACI tables are available on the ACI website
HOW DOES THE DEDUCTIBILITY CHANGE IF THE EMPLOYER DOES NOT ASSIGN THE VEHICLE FOR MIXED USE TO THE EMPLOYEE?
Deductibility
Deductibility
Rent
Services
Rent
Services
20%
20%
40%
40%
*Up to €5164.57 With annual adjustment and limited to the single vehicle
WHAT IS THE TAX TREATMENT IN THE CASE OF VEHICLES ASSIGNED TO DIRECTORS?
The vehicles can be assigned to administrators linked to the company with a collaboration contract.
The tax treatment varies depending on the type of use:
Deductibility
Deductibility
FRINGE BENEFITS
EXCESS COSTS
EXCESS COSTS
Compensation in kind due to the administrator calculated on the basis of the operating cost per kilometer of the ACI table
100%
100%
*Up to €5164.57 With annual adjustment and limited to the single vehicle
WHAT IS THE DEFINITION OF TRUCK?
These are vehicles intended for the transport of things and people responsible for using or transporting the things themselves (Art. 54, paragraph 1, letter d) of the Highway Code.
ARE THE COSTS INCURRED IN THE CASE OF A VEHICLE REGISTERED AS A TRUCK ALWAYS FULLY DEDUCTIBLE?
No, there are elements that impact full or partial deductibility regardless of how the vehicle was registered.
WHAT ARE THE CRITERIA TO BE USED TO EQUATE A VEHICLE REGISTERED A TRUCK WITH A CAR?
(Revenue Agency Order n.181492 dated 6/12/2006)
The elements for the verification must be deduced from reading the truck’s registration document. The truck will not be able to benefit from the full deduction if the registration document contains the following information together:
If all three of the above characteristics are present, it will be necessary (and decisive) to resort to the calculation using the formula indicated in the provision, i.e.:
Matriculation
KW Engine power expressed in Kilowatts
P Vehicle capacity
MC Overall Mass
T(t) tare weight expressed in tons
If the ratio is < 180, the vehicle can also be considered a truck for tax purposes, therefore the costs incurred are 100% deductible (and VAT 100% deductible).
If the ratio is >= 180, the truck must be considered for tax purposes as a car and the deduction will depend on the use of the vehicle.
FOR VAT PURPOSES WHAT ARE THE CASES IN WHICH THE DEDUCTIBILITY IS TOTAL?
Motor vehicles for the mixed transport of people and goods with a flatbed or box body with a deep cabin or a van including fenestrated ones with an engine with a displacement exceeding 2,000 cubic centimeters or with a diesel engine exceeding 2,500 cubic centimeters (so-called “luxury goods listed in table B ) of Presidential Decree 633/42) which are the object of the business activity; the burden of proof lies with the company. (Art.1 paragraph 261, letter e) Law 244/2007 (Financial Law 2008)
Furthermore:
FOR VAT PURPOSES WHAT ARE THE CASES IN WHICH PARTIAL DEDUCTIBILITY IS AVAILABLE?
In all these cases VAT is deductible at 40%.
