How taxing fringe benefits, property in use or lease, loans on concessional, company cars, business phones?

The company may grant to employees also compensation other than money, such as a company car, property in use or lease, low-interest loans. One speaks in this case of fringe benefits. Should be placed in envelope

In the face of the payroll, in the entry for the compensation elements, may be inserted items relating to special compensation received by the workers. These are the fringe benefits, which are the goods or services that the company or the employer provides the employee, which can use for free or on terms more advantageous than those of the market. This is for example the company car in mixed use, or a building leased. The detailed quantification in the pay bill aims to submit to taxation and payment of such fees in kind contributions.

The principle of inclusiveness. Article. 51 of the Income Tax Code (Consolidated Income Tax Act) establishes precisely the inclusiveness of the concept of employee income. And it is precisely on the basis of this principle that everything that the worker receives by the company to be considered as income, you can put then in payroll, and goes to the taxable income on which tax you calculate taxes owed. So in addition to the regular salary, bonuses to which the thirteenth or fourteenth, are also included in payroll fringe benefits, which represent an alternative form of remuneration, other than in cash.

What are the fringe benefits. The fringe benefits are varied and can consist of goods and services made available to the company for the free daily use of the employee, such as a company car, a property. They can also be made from actual supplies of goods or services to the employee. A further form of fringe benefits granted to employees may consist of obtaining advantageous conditions for employees such as the granting of low-interest loans.

Tax exemption up to € 258.23 per year. Since the value of fringe benefits subject to taxation as a component of income from employment, it is important to note that Article. 51 Paragraph 3 of the Income Tax Code indicates a limit of tax exemption. If the fees in nature fall within the limit of EUR 258,23 per year, that figure will not be subject to neither income tax nor to contributions. In case of exceeding this figure, will start the taxation and social security contributions. And also on the amount of 258,23 euro. That is, everything is considered to be the value of fringe benefits not exceeding the amount of EUR 258,23 tax exemption.

 

We see in this learning what are the fringe benefits, treatment in taxation of the same through the assignment of a value, which is given in the payroll and subject to tax.

The normal value of fringe benefits

The normal value. The indication of the value of fringe benefits in payroll allows the application of the tax due as income from employment, all of the income tax of individuals (lrpef), and the determination of social security contributions. To this end it is essential the evaluation of fringe benefits, that is, determine amount of these fees in nature contribute to the formation of the employment income of the employee and therefore fall nell'imponibile tax. To determine the value of goods and services assigned or offered to employees are subject to the provisions relating to the general criterion of the normal value art. 9 of the Tax Code.

The normal value means the price or the average amount charged for the goods and services of the same or similar kind, under conditions of free competition and at the same marketing stage, in time and in places closer. It can be understood as such as the discounted price that the supplier practice on the basis of special agreements applicants in commercial practice, including the possible agreement with the employer.

The valuation of goods and services should be made taking into account a number of factors. We must take into account the nature of the person who gives or lends the good or service, that is, if it is a manufacturer, a wholesaler or a retailer. Then you have to take account of price lists or tariffs of the person who supplied the goods or services. If such prices are missing, they can be used as a reference also lists of chambers of commerce and professional fees. For the determination of the nominal value must also take into account the discounts of use.

Normal value of goods produced on the farm. If you need to determine the normal value of goods produced on the farm and sold to the employees can be considered the average price charged by that company in the sale to the wholesaler. This provision shall not apply if it is reported to the employees of the companies that produce goods for the only retail or produce services or carrying out only marketing of goods. So only for companies which then give way to wholesalers or both wholesalers and retailers.

 

Fringe benefits are not subject to taxation. Not included in taxable income the normal value of the goods of services rendered in the event that the total amount does not exceed € 258.23 in the tax period. If the value is greater contributes entirely to the income and not on the portion above € 258.23. For the purposes of this limit should not be considered donations, that is if the good or service is granted on the occasion of holidays or anniversaries and does not exceed the value of 258,23 €.

Fringe benefits taxed conventional

Some benefits are taxed differently than the system of the normal value. Paragraph 5 of art. 41 of the Income Tax Code introduced a flat-rate or conventional for the determination of the value of certain fringe benefits. The legislature intended to simplify the counting of some compensations in kind by allowing the employer a determination of the income of the employee easier.

The goods and services taxed at the conventional criterion are listed exhaustively. Are as follows:

- Vehicles assigned by the employer on an employee to perform their work and then also granted for personal use (it is the use promiscuous);

- Buildings leased, or being used or loaned free of charge, to its employees, with or without dwelling;

- Employee loans granted directly by the employer.

For these types of fringe benefits, as we have said, the normal value is determined to be subject to taxation in payroll, but it results in a value of the conventional type. Let's see the features.

Cars and company vehicles in mixed use

For motor vehicles, motorcycles and mopeds in promiscuous use granted to employees (ie, for both corporate and personal use by the employee), is taken as 30% of the conventional value corresponding to a conventional distance of 15,000 km, calculated on the the basis of cost per kilometer of exercise can be deduced from the national tables of the Automobile Club of Italy (ACI), net of any amounts withheld to the employee. This is established in art. 51 paragraph 4, letter a) of the Tax Code.

Please note that this exception to the principle of the evaluation to the normal value of the benefit concerns vehicles, mopeds or motorcycles licensed for use promiscuous. If the employer granting the company vehicle exclusively for your own personal or family of the employee, for the determination of taxable income in the event the employee is necessary to refer to the normal value of the goods. So no exception. Does not contribute instead to form the income of the employee to use company vehicles for carrying out business trips.

The tables ACI is calculated on the basis of which the conventional value are processed each year by 30 November and are published by the Ministry of Finance by December 31 of each year and are effective for the following year. The amount so determined in the conventional measure is then indicated in payroll and form the taxable income on which you calculate the income tax, additional regional and municipal payable by the employee.

Calculation of the conventional value. Since the annual determination of the conventional value of the vehicle (or motorcycle or moped) granted to the employee as a fringe benefit, the amount will be distributed to all the monthly it is granted to the employee. So if the company car was granted to the employee for all 12 months, the conventional annual, calculated on a mileage of 15,000 kilometers and according to ACI table, will be allocated (and broken) for the 12 months of use, counting the number of days for which the vehicle has been assigned, regardless of the number of days that was actually used by the employee.

 

Value calculated on the days of assignment, not of use. In other words, it should be divided by the amount of the conventional value by 365 days and multiplied the result (the daily value of fringe benefits) for the number of days in the month in which the asset is assigned to the employee. The resulting amount is the amount that will be shown in payslip and that will be part of taxable salary.

 

What are the cars. Motor vehicles are motor vehicles with at least four wheels, excluding motor vehicles. They are divided into:

- Motor vehicles, ie vehicles used for the carriage of passengers and comprising no more than 9 seats, including the driver;

- Motor vehicles for mixed transport, ie vehicles having a total mass at full load not exceeding 3.5 tonnes or 4.5 tonnes if electric-powered or battery, intended for the transport of people and things and can hold up to 9 seats including the driver;

- Motorhomes, ie vehicles having a special bodywork and equipped permanently to be used for transporting and housing a maximum of seven people, including the driver.

The amount charged to the employee for private use. The conventional value determined in accordance with art. 51 Paragraph 4 of the Tax Code, as mentioned before, must be net of any amounts withheld to the employee. It is the amounts relating to any payroll deductions made by the company for the private use of the property as a benefit granted. The employee in this case pay the personal use of the property for business decision.

The value of the personal use of the asset, being deducted from the conventional value and therefore taxable income, being a deduction in payroll established by the company (including VAT), obviously does not contribute to the taxable employee's tax does not constitute remuneration and has no impact on the calculation of contractual institutions such as severance indemnities (TFR).

This raises the question of the worker's request to receive a charge on the payroll on the days of use and not on the days of assignment, as the employee may have had access to a company car for the whole month, then actually using it for few days.

It should be noted that the amount so determined has a value lump and conventional. That is, the company calculates the amount of conventional as well as on the basis of 15,000 miles and according to ACI table, without being able to consider the actual mileage of the car company, similarly calculates the deductions from the employee based on the days assignment of the vehicle, regardless of how many days later the employee actually uses the car (or motorcycle) for business and private use. Just as it is entirely irrelevant that the employee support bear some of the costs or all costs relating to the use of the vehicle, such as fuel costs or maintenance.

Buildings leased, use or loan

The company may grant to the employee use, loan for use or lease of buildings. In this case, the value to be attached to the fringe benefits tax purposes equal to the difference between the cadastral income of the building, plus any costs of the building itself, not including utilities borne by the user (employee), and the amount paid by the employee for the enjoyment of the building itself. This for buildings registered at the Land Registry. That provision, contained in art. 51 paragraph 4, letter c) of the Tax Code, applies to the buildings owned by the employer and those leased by the company itself.

For buildings which should not be entered in the land register is taken as the value of the fringe benefits the difference between the value of the rent determined under vincolistico or, failing that, that determined in the free market, and the amount paid by the employee for the enjoyment of the building itself.

Operating expenses (such as those for routine maintenance, or insurance, or relating to the condominium) that were included in the determination of the cadastral income, then obviously do not have to be combined to yield the same in order to avoid a double charge to the employee .

Example of calculation of fringe benefits. The employee is granted an apartment in use. The cadastral income is 500 euro. The condo fees are € 1,000 for example, borne entirely by the employer, while utilities (electricity, gas, telephone) are dependent on the worker. In this case, the benefit granted to the employee is 1,500 Euros and then the monthly amount to be included in payroll as a fringe benefit is equal to 125 Euros. A similar calculation even where the employer pays a rent to third parties for use in granting the benefit to the employee.

Residential or accommodation granted to the janitors or guardian. In this case it is an employee with special functions, including the obligation to stay in the accommodation itself. Therefore, the determination of the value of fringe benefits is granted as different. In this case is calculated as income from employment, subject to the tax, 30% of the difference between the already mentioned cadastral income increased expenses related to the building itself, not including utilities borne by the user (water, electricity, gas, telephone, waste, condo fees), and the amount paid by the employee for the enjoyment of the building itself. Similarly, in the case of buildings that should not be entered in the register, the method of calculation will be the same as described above, also to the extent of 30% to be included in the taxable income of the employee and payroll.

Made granted to several employees. In this case, the amount determined according to the criteria described above, will be distributed in the hands of all those who have taken advantage of the benefits, according to the period of use of each of the employees.

Monthly rent paid by the employee. In the case in which to provide for the payment of the rent for business purposes is the employee and the company supplies its employee contributions to the rent paid, the employer is required to submit a tax on assistance granted to the employee . So will the amount indicated in payroll and tax nell'imponibile fall.

Loans to employees at reduced rate

The company may grant to employees of the pay of favor, at a reduced rate. Also in this case it will be necessary to determine the taxable value of fringe benefits granted to the employee by the employer, indicated in payroll and subject to tax monthly. The moment in which this provision applies is that of payment of each installment of the loan, provided the repayment plan.

Article. 54 Paragraph 4 provides that in the case of loans, either granted directly by the employer or by third parties, is taken as the value of 50% of the difference between the amount of interest calculated at the official rate of discount (TUS) in force at the end of each year and the amount of interest calculated at the rate applied on them. The official rate of discount is the TUR, the official reference rate determined by the European Central Bank. Obviously if the difference would be negative there is no benefit.

Company loans excluded from taxable income. These provisions relating to fringe benefits on loans to employees on favorable terms does not apply in the following cases:

- For loans entered into before January 1, 1997;

- For loans of less than 12 months granted as a result of corporate agreements, by the employer to employees with a contract of solidarity, or CIG (CIG and CIGS), and employees victims of usury or requests extortion.

 

Calculation of benefits on business loans. During the year the employer that provides the loan to the employee shall calculate the deduction from the taxable benefit to be included in payroll as a fringe benefit, considering the TUS (or TUR) in force at the end of the previous tax period, but then perform when the adjustment fiscal year-end, the recalculation having to know the new TUS established at the end of the year pertaining to the loan itself. In the event of termination of employment during the year, will be considered the official reference rate in force at the time of termination of the employment relationship.

 

Example: TUR at 31 December 2010 amounting to 1%, TUR 31 December 2011, for example equal to 1, 25%. Official interest rate applied by the employer equal to 50% then 0.5%. Capital of 15,000 euro. The value of the benefit calculated by the employer is equal to the difference between 1% and 0.50% of TUR of 12,000 Euros of Capital Protection. So we have 150 euro (1% of 15,000) - 75 € (0.50% of 15,000) = 75 euro which are subject to 50%. The amount of fringe benefits is 37.5 euro, which will be spread over the 12 months for a monthly amount of 3.12 euro. So in the pay period, the employer will fit into a payroll fringe benefit of 3.12 EUR, which forms part of the income. And then the employee will pay the taxes of 3,12 €.

The TUR is established in late 2011, however, the extent of 1.25%, so there is some adjustment to be made (the employer has carried out the calculation on an assumed percentage of 1%). Therefore, when the adjustment fiscal year-end will recalculate the value of the benefit that is equal to the difference between 187.5 € (1.25% of 15,000) - 75 € (0.50% of 15,000) = € 112.50, which applies to the 50%. The final figure of the fringe benefit is € 56.25. Being the fringe benefits granted to the employee less than € 258.23 limit the tax exemption, the employer will not have to enter nell'imponibile of payroll tax equalization (eg December) recalculated the difference between 56.25 and 37 , 50 € nell'imponibile already included, but will have to cover the balance of the fiscal nell'imponibile 37.50 already entered, bringing a decrease in taxable income and taxes withheld on returning 37.50 EUR.

Mortgage interest paid directly by the employee. In the event that the employer pays directly to the account that the employee has devoted to the borrower's mortgage payment to third parties, the company contribution to cover a portion of the accrued interest, provided in ways that make certain and closely linked to the provision the planned duration of the mortgage, is considered an economic advantage granted to the employee in terms of lower amount of the installment to be paid to the bank that granted the loan, and as such should be regarded as a fringe benefit and is included in taxable income of the employee as income, according to the valuation criteria laid down for loans granted to employees.

 

25/01/2012

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Translated via software

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Source:

Italian version of ReteArchitetti.it

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