Taxation: The Fourth Advantage of Renting

The most obvious reasons for choosing Long Term Car Rental are real affordability, possible cost planning, and a net savings in resources and time for managing your vehicle. But there is an additional advantage: taxation.

For aCOMPANY, 3 cases must be analyzed:

1. the vehicle is for use exclusively instrumental to the business conducted or is used for public use;
   Direct taxes for vehicles and services are 100% deductible, and VAT deductibility is 100%forvehicles and services;
2. the vehicle is not for use exclusively for the activity;
   Direct taxes for vehicles and services are deductible at 20 percent (for rental fee costs up to €3,615.20 on an annual basis), and VAT deductibility is at 40 percent (if proven exclusive business use, the percentage goes up to 100 percent);
3. the vehicle is in mixed use with employees for most of the tax period.
   Direct taxes for vehicles and services are 70% deductible, and VAT deductibility is 40% for vehicles and services (if the consideration charged to the employee with a VAT-liable invoice results in an amount at least equal to the fringe benefit on the cars, the percentage goes up to 100%).

For a TRADE AGENT or REPRESENTATIVE:

Direct taxes for vehicles and services are 80% deductible (for rental fee costs up to €5,164.57 with annual adjustment 5,164 from 2017), and VAT deductibility is 100% for vehicles and services (% on actual use);

For the PROFESSIONAL or EXERCISE ART AND PROFESSIONAL (individual form):

Direct taxes for vehicles and services are. deductible at 20 percent (for rental fee costs up to €3,615.20 on an annual basis)*, and VAT deductibility is at the 40% for vehicles and services (if for exclusive use or made available to the employee for consideration, the percentage goes up to 100%);

(*) One vehicle in case of activity carried out as an individual and one vehicle for each partner or associate in case of activity carried out as an associate.

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