What are fringe benefits?
In all cases of mixed use (and therefore of use of the vehicle for both business and personal purposes), the employee benefits from remuneration in kind (a "fringe benefit"), which goes towards forming income and increasing the tax basis. The payslip therefore includes an amount calculated by multiplying the cost per kilometer of use of the vehicle (using the ACI tables) by a lump sum annual distance of 4,500 km (30% of 15,000 km). (Art. 51, paragraph 4, letter a) of the Italian Income Tax Code).
The ACI tables are available from the website:http://www.aci.it/i-servizi/servizi-online/fringe-benefit.html
What is the tax treatment in the case of vehicles assigned to Directors?
Vehicles can be assigned to directors connected to the business by means of a collaboration contract.
The tax treatment varies according to the type of use:
DeductibilityFRINGE BENEFITSEXCESS COSTS30%*20%DeductibilityEXCESS COSTS40%* Remuneration in kind due to the director (i.e. 30% of the amount corresponding to an agreed travel distance of (15,000 km, calculated on the basis of the cost per kilometer of use, taken from the ACI tables)
- MIXED USE
Mixed use takes place when the means of transport is used both for work and personal reasons (Tax Authority Circular no. 1/E of 19 January 2007).
- PERSONAL USE ONLY
In this case, the assignment constitutes remuneration in kind to be valued at normal value (average rental charges) and, therefore, all deductible expenses within the limits to which they go towards forming said remuneration (Article 95 of the Italian Income Tax Code).
- MIXED USE