Taxation for company vehicles granted for private and business use
Article 1, paragraphs 632 – 633 of Law 160/2019 (the so-called “Budget Law 2020”) provides for a change in the methods for determining the fringe benefit, in the case of vehicles granted in mixed use to the employee.
The new rule will come into force from 1.7.2020
CURRENT REGULATIONS (VALID UNTIL 30.6.2020)
Article 51, paragraph 4, letter a) of the Consolidated Income Tax Act prescribes that for the purposes of determining the employee’s earned income, for motor vehicles, motorcycles and mopeds granted in mixed use, 30% of the amount corresponding to a conventional mileage of 15,000 kilometres is assumed, calculated on the basis of the operating mileage cost inferable from the ACI tables, net of any amounts withheld from the employee.
NEW DISCIPLINE FROM 1.7.2020
The new standard provided for a differentiated regime based on carbon dioxide (CO2) emission values. In all cases it refers to newly registered motor vehicles, motorcycles and mopeds, granted in mixed use with contracts signed from 1.7.2020.
For vehicles with carbon dioxide emission values not exceeding 60 grams per kilometre (g/km CO2), 25% of the amount corresponding to a conventional mileage of 15,000 kilometres calculated on the basis of the operating cost per kilometre deducted from the ACI tables, net of any amounts withheld from the employee.
This percentage is increased to 30% for vehicles with carbon dioxide emission values exceeding 60 g/km, but not 160 g/km.
Where the emission values of vehicles exceed 160 g/km but not 190 g/km, this percentage shall be increased to 40% for the year 2020 and 50% from the year 2021.
Finally, for vehicles with carbon dioxide emission values above 190 g/km, the percentage is 50% for the year 2020 and 60% from the year 2021.
N.B. This is without prejudice to the application of the regulations in force as at 31.12.2019, for vehicles granted in mixed use with contracts stipulated by 30.6.2020.
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