Eurocar

Company car for mixed use: meaning, regulations, and deductibility

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If you've ever wondered what company cars for mixed use mean, <\/strong> who can drive them, and what the taxation on these vehicles is, this article will clarify your ideas, giving you the tools to navigate the complex world of company mobility.<\/p>

Shall we begin? <\/p>

What does car for mixed use mean? <\/span><\/h2>

A company car for mixed use is a vehicle that the company assigns to an employee <\/strong> so that they can use it both for work-related reasons and personal needs.<\/strong><\/p>

This type of assignment is common among sales agents, executives, and professionals who need a means of transport to perform their work but can also use it in their free time.<\/p>

When a company provides a car for mixed use, it covers the costs of purchase, maintenance, and insurance, <\/strong> while the employee can use it without additional expenses, except for the Fringe deduction <\/strong> in the paycheck.<\/p>

Who can drive a company car for mixed use? <\/h3>

The company car for mixed use is assigned to a specific employee, who is the main user.<\/p>

However, in many cases, the company allows the vehicle to also be driven by their close family members, <\/strong> such as the spouse and children, provided this is stipulated in the assignment contract.<\/p>


When a company car is not considered for mixed use <\/h3>

Not all company cars fall into the mixed-use category. Here are some differences: <\/p>

  • Car for exclusively company use: <\/strong> the employee can only drive it during working hours and for professional purposes.<\/li>
  • Car for exclusively private use: <\/strong> less common, but possible. The employee receives the car as a true personal benefit, without the obligation to use it for work;<\/li>
  • Pool car or carpooling: <\/strong> vehicles shared among multiple employees, usable only for company needs and without fixed assignment.<\/li> <\/ul>

    In these cases, the company car is not considered for mixed use and therefore does not follow the same tax rules.<\/p>

     <\/p>

Company car for mixed use: what does the law say? <\/span><\/h2>

From January 1, 2025, the regulations on company cars for mixed use will undergo some important changes.<\/strong> According to Article 51 of the TUIR (Consolidated Income Tax Act), the car granted to employees falls under fringe benefits, <\/strong> which are in-kind compensation subject to taxation. <\/p>

The current Budget Law has introduced a new taxation system that varies based on the type of vehicle fuel. This system aims to encourage the use of less polluting cars.<\/p>

How much is the taxation on cars for mixed use? <\/h3>

Until June 30, 2020, the taxation was calculated on 30% of the car's mileage value, based on an average mileage of 15,000 km per year (according to ACI tables). From July 1, 2020, however, the taxation has been adjusted based on CO8 emissions.<\/p>

From 2025, the new tax rates will be as follows: Type of fuel Taxable percentage Electric cars 10% Plug-in hybrid cars 20% Thermal (petrol/diesel) and mild/full hybrid cars 50%<\/p>

This change aims to make the choice of a low-emission company car more advantageous.<\/p>

Deductibility of company car for mixed use <\/h3>

For the employer, the car for mixed use is tax-deductible. The percentage of deductibility varies based on the intended use:<\/p>

Exclusively company use: 100% of expenses deductible;
Mixed use (assigned to the employee): 70% of expenses deductible;
Car not permanently assigned to an employee: 20% of expenses deductible.<\/p>

 <\/p>

How to choose the right formula for the company car? <\/span><\/h2>

Every company must carefully evaluate the most convenient solution for its needs, considering costs, tax benefits, and new regulations.<\/p>

The most advantageous option is often to choose electric or hybrid cars, which guarantee greater tax savings.<\/p>

For optimal management of the company fleet, many companies rely on industry specialists like ours, where we offer personalized consultations and tailored solutions.<\/p>

 <\/p>

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