Italy: Reduced Deductions for Car Benefits

Recent labor market reforms in Italy have reduced the deductions for car benefits. 

The current 40% for costs and expenses has been reduced to 27%, and the deductible limit for vehicles given for work and personal use will be 70%, rather than 90%, for both companies and the self-employed.  The rate for Sales representatives (80%) has not been altered.

The changes, which will be applied as of 2013, exclude companies which use vehicles solely for work purposes and they make no alterations to VAT rules.

Those whose financial year follows a Jan-Dec calendar should take into consideration the new rates when determining advance tax payments.

It’s worth noting that these changes will not affect the limit of value of the cars above which the expenses cannot be deducted.

Purchase or Lease

No account is taken of costs exceeding:

• € 18,075.99 for cars and campervans;

• € 4,131.66 for motorbikes;

• € 2,065.83 for mopeds/scooters.

Rental or Hire

No account is taken of costs exceeding:

• € 3,615.20 for cars and campervans;

• € 774.69 for motorbikes;

• € 413.17 for mopeds/scooters.