Company car (private vehicle) assigned to the employees:
- From the corporate income tax perspective: the deductibility of both the purchase cost (amortization cost / lease cost / rent cost) and the management cost (maintenance, fuel, parking etc.) have been reduced from 90 percent to 70 percent
- From the employee’s personal income tax perspective: such assignment produces a taxable fringe benefit on the employee’s salary (the benefit is calculated on the basis of figures provided on an annual basis by a special public entity called A.C.I)
The above tax treatment must be applied if the assignment meets a few requirements in terms of:
- usage: it must be both for business and private use
- formality: the assignment must be supported by adequate documentation such as letter of assignment
- duration: such assignment must be for most of the period of ownership during the tax year
Company car (private vehicle) assigned to directors who are not employees:
- From the corporate income tax perspective:
- purchase cost (within the maximum amount of €18.075,99): the relevant percentage of deductibility has been reduced from 40 percent to 20 percent
- leasing cost (in proportion to a maximum purchase cost of € 18.075,99): the relevant percentage of deductibility has been reduced from 40 percent to 20 percent
- rental cost: (within the maximum amount of € 3.615,20 per annum) the relevant percentage of deductibility has been reduced from 40 percent to 20 percent
- management cost: the relevant percentage of deductibility has been reduced from 40 percent to 20 percent
- the above costs are fully deductible for the amount that is taxed as fringe benefit for the director
- From the director’s personal income tax perspective:
- such assignment produces a taxable fringe benefit for the director (the benefit is calculated on the basis of figures provided on annual basis by A.C.I)
Company car (private vehicle) not assigned:
- From corporate income tax perspective:
- purchase cost (within the maximum amount of €18.075,99): the relevant percentage of deductibility has been reduced from 40 percent to 20 percent
- leasing cost (in proportion to a maximum purchase cost of € 18.075,99): the relevant percentage of deductibility has been reduced from 40percent to 20 percent
- rental cost: (within the maximum amount of € 3.615,20 per annum) the relevant percentage of deductibility has been reduced from 40 percent to 20 percent
- management cost: the relevant percentage of deductibility has been reduced from 40 percent to 20 percent
