Buy or rent a car?
Companies and professionals have at their disposal an alternative to purchasing of used cars for work: the long-term lease of the vehicle. From the point of view of costs, however, it is an advantageous alternative? Depends on the situation, although it should be noted as the Italian tax authorities, on the auto industry, it is always quite severe.
VAT
To affect the percentage of deductibility of VAT (if 40% or 100%) are the type of the user and the methods of use of the vehicle. In detail, the VAT is fully deductible if the vehicles are strictly instrumental, or if they are essential to the performance of business activities. The threshold of deductibility is lowered to 40% for cars assigned to employees for both business and personal use, defined as "mixed use".
Income tax
The view is even more varied with regard to the deductibility of costs, namely the rental fee and the expenses for the maintenance, road tax and insurance. The picture of the deductibility of costs related to the management is as follows:
• 100% and without spending limits for the instrumental use of the vehicle (for example a van) by the company;
• 90% of the total cost if the car is assigned in promiscuous use to employees, provided the employee has been entrusted for more than half the year or month of the year in which lasted the rental agreement;
• if the car is in use to agents and sales representatives, are deductible 80% of the rental fee (up to the maximum fee of 3615 euro per year) and ancillary services;
• 40% of the total rental fee (always within the limits of Caone of 3615 euro per year per vehicle) and ancillary services for all other media company.
Also, notice that if the contract or the invoice is not clear the distinction between rental fee and fees, the total cost has a maximum limit of € 3615 per year (which are then applied the percentage of deduction of 80% and 40 %).
Professionals
The professionals are entitled to a deduction of VAT in the amount of 40% of the cost of the rental. On the personal income tax, however, the self-employed can be calculated between the costs deductible 40% of the amount of the royalties car rental, up to the maximum of € 3615 per year and 40% of services.
21/04/2010
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Translated via software
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Source:
Italian version of ReteArchitetti.it