The employer can assign the employee a car both for service purposes and for personal use.
The Law for All – 11 August 2021
You have been hired as a Medical Scientific Representative by a pharmaceutical company. Your job involves the need to move continuously around the area and, for this reason, the letter of employment provides for the attribution in your favor of acompany car for mixed use. Do you want to know if this benefit will affect the taxation of your salary.
There are many professionals who, to carry out their work, must use a private means of transport. In cases of attribution of acompany car the worker wonders what tax? is provided. To establish this, first of all, it is necessary to verify whether the vehicle is granted only for service needs or also for personal use. Once this check has been made, it is necessary to check which car model has been granted for use by the worker.
Company car: what is it?
When it comes to company car we refer to the practice, widespread in many companies, of granting a car for use to the employee. Usually, the attribution of the vehicle derives from the need of the worker to move frequently from one place to another for service needs. Just think of all the workers who have to submit i company products on the territory (such as representatives, sellers, medical-scientific reps, etc.).
In these cases, the company has two alternatives:
- reimburse the worker travel expenses incurred for service reasons with one's own personal car;
- grant the employee a company car in use.
Car expense reimbursement: how does it work?
As we have seen, the first possibility in case of using the car for work needs and the reimbursement to the employee of the expenses related to the use of his own personal car. However, this solution is not always feasible because the worker may not have a vehicle available or may not be willing to use it for company needs.
In any case, this methodology is not all that convenient for the company which will have to reimburse the employee for the costs associated with using the machine by adopting, as a criterion, the mileage reimbursements provided by Aci tables which are updated annually. The economic value per kilometer of the reimbursement depends on the model of car used by the worker and can even reach the threshold of 1 euro per kilometre.
If the worker uses a 400 HP BMW X7 Xdrive, he will be entitled to a refund of 1.1159 euros for each kilometer traveled for service reasons.
Car used by the employee: how does it work?
The mileage reimbursement it can be a significant cost item, especially if the employee travels thousands of miles each year. For this reason, companies often opt for assigning the employee a company car. In this case, the vehicle belongs to the company (which purchased or leased it) and is granted for use to the worker who will not have to bear any costs, fuel or maintenance.
From a tax point of view, however, the situation is different depending on the type of use granted to the worker. In particular, if the employee can use the car only for work purposes there will be no amount to be taxed. The case of mixed use is different when the employee can use the car both for work and for personal purposes.
Mixed-use cars: what taxation?
grant acompany car for mixed use to the worker means to attribute to him a benefits. The personal use of the car, in fact, is an advantage that has its own economic significance and, from a fiscal and social security point of view, it is comparable to a form of remuneration in kind. For this, in case of promiscuous use, it is necessary to subject a sum of conventional money, which corresponds to the economic utility granted to the worker, to personal income tax and social contributions.
To locate the share of fringe benefits which must be indicated on the pay slip and taxed, it is necessary to verify the car model, on the basis of the Aci tables which are updated year by year.
The annual fringe benefit relating to an Alfa Romeo Stelvio 2.2 TD 160 HP is equal to 2,273.39 euros, while the value to be subject to taxation for the award of an Opel Astra 2019 1.5 105 HP is equal to 1,434.26 euros per year.
related news: ACI Fringe Benefit Tables
