When you can deduct the costs of telephone lines and mobile phones?

In the exercise of entrepreneurial activity or a liberal profession is possible to operate the VAT deduction and the deductibility of costs for the purchase of mobile phones, consumption costs incurred for the fixed and mobile telephony, for modems and personal computers. We see the percentages and conditions.

The phone market, both fixed and mobile, is full of commercial offers of telephone companies, which are make great competition for new customers. Offers are of various types, often concern promotions on purchases of mobile phones, smartphones, or promotions related to the transition from one operator to another. The customer, the citizen, the taxpayer is therefore at having to constantly evaluate the various offerings, given the enormous choice between the various fees and subscriptions telephone operators.

The assessment on telephony for businesses, professionals and registered for VAT. With regard to the business or activities of freelance or self-employment, given the importance of their work in the world of telephony, is of even more importance to the assessment of costs and benefits among the various commercial offerings dedicated to the world of business, offers for its fixed telephony (business or study) and mobile (cellular company for the exclusive use or for mixed use, including business mobiles accommodation for employees).

Even for the business sector commercial offers are not lacking. But the determination to be made is always in terms of business costs, particularly in relation to the tax saving on expenditure incurred for the purchase of mobile phones, for telephone charges related to consumption, or expenses related to royalties paid.

The VAT paid is deductible as well as the costs incurred are deductible in determining the business income. This results in tax incentives for the company or for the professional or for the self-employed and this assessment also influences the choices related to the commercial offer of the managers to choose from for your needs. Because very often, especially for professionals, evaluation is a contract between a business and rechargeable for private use. For this reason, we explore the current legislation in terms of VAT deductions and deductibility of costs in the fixed and mobile telephony.

The deductibility of VAT on credit for the fixed and mobile telephony

The budget of 2008 introduced important changes regarding the deductibility of VAT on credit, the VAT paid on the purchase of cellular telephone charges for the fixed and mobile telephony incurred in the enterprise or self-employment. The Value Added Tax (VAT) paid on the purchase of mobile phones and for mobile services, including VAT expenses incurred during the tax year for telephone traffic, rental or lease of the mobile, be wholly deductible. So VAT paid is deductible at 100%, becoming a tax credit that reduces the VAT payable (on invoices).

The condition of the exclusive use. The condition necessary for it to be fully deducted the VAT paid at 100% for the fixed and mobile telephony is that good and its use are related entirely to the enterprise or self-employment. Up to December 2007, the deductibility of VAT paid was admitted in a flat rate of 50%, without it being necessary to prove the actual use of the occupational phone or landline phone. The novelty is that you can deduct 100%, if the use is exclusive, it is demonstrable, because the VAT will be declared the deduction made more than 50% of costs related to telephony.

The deductibility in the case of mixed-use. In case of non-exclusive use for business purposes desk phone or mobile phone operator of the taxpayer business activities or self-employment should apply a deduction of VAT on purchases and telephone charges to the extent of 50%. This is the case in which the entrepreneur or professional bears the cost of telephony for private use.

The control of the Revenue. The condition of the demonstration of the exclusive order to qualify for the tax deduction of 100% is very restrictive in the sense that the same as the 2008 Budget provides that the offices of the Revenue will have to focus inspection activities on taxpayers that we have computed deduction in the tax VAT in a more than 50% on purchases and related costs of managing the phones and, above all, of the phones. In practice, the person making a deduction of VAT on purchases more than 50% will most likely try to use occupational exclusive.

Mixed use and VAT deduction to 100%. Entrepreneur or professional, as an alternative to the application of the 50% tax deduction in the case of mixed use (ie even for private use), it is still allowed to deduct in full 100% (or even 60% or 70 %) on purchases relating to fixed or mobile, but then subject to the VAT own personal or family use or for their employees, on the basis of the normal value.

The normal value of the goods or services means the price or average amount charged for goods and services in the same or similar kind, under conditions of free competition and at the same marketing stage, in time and in the place where the goods or services are been acquired or provided, or, failing that, the time and place nearest.

Entrepreneur or the professional is therefore allowed to choose for VAT purposes:

- To place the asset in full in the assets of his business;

- Retaining them wholly within his private assets, thereby excluding them completely from the VAT system;

- Integrating them into his business only to the extent the professional use effective.

Principle of inherence. When it relates to the mobile phone or mobile phones, for the purposes of evaluation of the use professional effective and therefore the percentage of deduction VAT possibly greater than 50% (that is 60%, 70% or 100%), the taxpayer must apply the principle of inherence. That is the cost incurred and deducted must be related to work both in quantitative and qualitative terms, which may need to be demonstrated.

Supply of goods. On disposal of such cell phone subject to its purchase of deduction of VAT, the taxable amount for VAT purposes, then the normal value shall be the percentage of the selling price is equal to the percentage deducted by upstream, according inherence.

Example. If the VAT deducted upstream second inherence was 60% when it was purchased, the taxable amount of a subsequent sale of the mobile is equal to 60% of the sale price or normal value, if the sale price is lower than the value normal self (described previously). If the rate of VAT was deducted instead was 70%, you can deduct 70% of the sale price or normal value, if the sale price is lower.

Deductibility of costs for the purchase of mobile phones and phone expenses

In addition to the 2008 Budget which has intervened on the deductibility of VAT, the previous year, in 2007, there have also been important changes regarding the deductibility of costs incurred for the purchase of mobile phones, telephone costs for both the fixed telephony Mobile.

The Finance Act of 2007, Law no. 296 of 2006, paragraph 401 and 402, has made major changes in the tax rules relating to the deduction of telephone charges for the determination of business income or self-employment income. It 'was in fact the standardized measure of the deductibility of costs and exactly have changed the art. And Article 102, paragraph 9. 54 paragraph 3-bis of the Consolidated Income Tax Act (Consolidated income taxes):

- I'm 80% deductible costs related to mobile (prior to 2007 was 50%);

- I'm also 80% deductible costs related to fixed telephony (prior to 2007 was 100%).

The advantage of deductible expenses. The expenses are deductible from the total income of the costs that the taxpayer may have a decrease in taxable income in the calculation dell'imposte income tax as the income tax or the IRES. In practice, the deductibility allows a reduction in tax payable, which is realized through the reduction of taxable on which the tax is calculated.

Therefore, it is interest of the taxpayer, business owner or professional, self-employed, claim a deduction all costs incurred in carrying out its activities. In the case of fixed and mobile telephony that deductibility is, as we have seen, only 80% of the cost incurred (but can be extended to 100% in some cases, as we shall see). The calculation and the related deduction will be made by the entrepreneur or professional at the time of submission of the tax return through the model Act.

What costs are deductible. The deductible refers to all the costs of the fixed and mobile telephony, in the financial year of the business or self-employment, so for business use. Includes depreciation for the purchase of mobile phones (which the law defines "terminal equipment for land mobile radio service"), the rents including financial or rental, the cost of operation, maintenance and of course consumer spending charged by operators in the phone bill.

Deductibility of phone cards and prepaid cards. This theme has intervened with the Inland Revenue circular no. 47/2008 and by clarifying which fall within the 80% limit in deductible expenses including those incurred for the purchase of phone cards or prepaid cards, these are expenses related to the use of telephone services. In any case, the deductibility of these costs requires the possession of the necessary documentation to substantiate the costs incurred and the inherent cost (invoice to the dealer or the telephone company).

The deductibility of 100% for trucking companies. The deductibility of 80% and there is an exception concerns the tax treatment costs relating to telephone equipment vehicles used for goods transport enterprises drivers. For them the deductibility of costs is integral, then to the extent of 100%. This deduction is limited to a single plant for each vehicle. For any further plants will apply the deduction of 80%.

The deductibility of 100% of the intranet. The resolution n. 320 of 2008 considered fully deductible the cost of a dedicated phone lines, technologically inaccessible outside, then the system of internal distribution of information called intranet. This network is fully deductible, then to the extent of 100%.

Mobile work in promiscuous use the employee

It 'possible that the contractor carrying out its business activities and to meet production needs to equip its employees of a company cell phone, which is granted to the employee even in mixed use, ie also for private use. If your phone is exclusively for business purposes, the problem does not arise, we will apply the VAT deduction at 100% and the deductibility of the cost of 80%. The problem arises in the case of mixed use and how to assess the deductibility of VAT on these cost components and how they operate in terms of deductible from business income or self-employment.

Deduction of VAT on company mobile phones. Also in the case where the mobile phone is under mixed use to the employee, the deductibility of VAT on costs incurred will vary depending on whether the phone is made available free of charge or with payment of a specific fee.

Mobile phones used by employees granted without payment of a specific fee to be considered phones are not used exclusively in the conduct of business. In this case the VAT is deductible according to the actual use of mobile phones as part of the business, applying the principle of respect inherent to the business.

If the phone company is licensed for use to the employee in return for payment of a specific fee (such as a monthly direct debit company), for the purposes of deductibility mobile phones are considered to be used solely in the exercise of the activity. In this case the VAT incurred on costs is deductible to the extent of 100%.

Deductibility of costs related to company mobiles. Still assuming of mixed use, costs incurred for the use of the mobile phone company by the employee are deductible from business income to the extent of 80%, whether the grant to the employee is free of charge (ie fully charged also on the private use of company mobile business to be part of the employee).

Mobile work as a fringe benefit. The phone company made available to the employee for private purposes constitutes a fringe benefit granted by the company to the employee. And you should apply the tax and the employee, based on the normal value. This value helps to form the tax base of the employee for the purposes of Irpef, if it exceeds the amount of 258,23 euro per year. In case the amount of the nominal value is less than 258,23 euro years, not apply the taxation Irpef.

Deductibility of costs for the purchase of personal computers and modems

The Finance Act 2007, paragraph 401 and 402, which introduces 80% deductibility of costs, refers to the "terminal equipment for electronic communication services for public use referred to in point gg) of paragraph 1 of art. 1 of the Code of electronic communications. "

This code refers to communication services equally and therefore, with respect to services related to the different types of telephone lines, both fixed and mobile telephony used part of their business or professional or artistic. So may be included in the deduction to the extent of 80%, and non-deductibility in accordance with the general criteria, in addition to mobile and fixed costs, the costs related to the purchase of a modem to connect to the Internet and the purchase of personal computer itself.

Deductibility to 80% of DSL modems and routers. The Inland Revenue with the resolution 104/2007 and made it clear that within the scope of the deduction of 80% of the costs are to include not only the costs of telephone services in the strict sense but also those related to assets used in dial-up connection to the internet made in the context of the business or artistic or professional. So the costs related to tangible assets (the modem, for example) and intangible assets, including software.

Therefore fall within the 80% deduction also costs related to the purchase of modem, router, DSL and software. As well as include the costs related to depreciation, lease payments including financial and freight costs relating to the use and maintenance of telephone connection made in the context of business. The condition is that the goods are essential for connection to the above telephone lines.

Deductibility of 100% of the costs of the personal computer. In this case, however, the costs related to the purchase of the personal computer in the strict sense are deductible in accordance with the general criteria laid down for the determination of business income or self-employment (for professionals for example).

So in case of purchase of a personal computer with built-in modem will have income for a division of costs: those relating to the purchase of the modem will be deductible to the extent of 80% according to the provisions of the Finance Act of 2007, while the costs related to 'purchase of the personal computer will be deductible in full measure, then to 100%.

It will be good that the taxpayer who purchases you make on the invoice detailing the individual cost elements, distinguishing the costs related to the connections (eg for the integrated modem) or connection software, the costs related to the personal computer in the strict sense .

 

20/12/2011

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Translated via software

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Source:

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