More and more companies, but now also private individuals, are resorting to long term rental. This is a very advantageous formula, because many, for example, need a vehicle for a certain period of time and do not need to buy it, so that it becomes their property. From this point of view, long-term rental can be really important, because you can drive a car, even if you don’t own it. Just enter into a specific contract with a long-term rental company and find out you have it many opportunities that perhaps initially they had not even considered. But let’s immediately specify what the long-term rental consists of and what advantages it entails.
The advantages of tax deductibility
Speaking of long-term rental and enumerating the advantages it brings, we cannot fail to refer to the car rental deductibility. For companies and for those who have a VAT number it is possible to deduct the monthly fees that are paid for the rental from the tax calculation.
However, everything depends on the use of the vehicle. In fact, if the hired car, upon payment of a monthly fee, is used for business activity or for public purposes, 100% of the amount of the fees can be deducted.
If the vehicle is assigned to an employee for a long period of time related to the tax period, 70% of the cost can be deducted. If the car constitutes only a instrumental good and is not assigned to an employee, it is possible to deduct 20%, referring to the maximum limit of 3,615 euros for the financial portion. A law in force since 2017 sets this limit at € 5,564.57 for agents and sales representatives.
The other advantages of long-term rental
There are many advantages, as we have already specified, related to the possibility of choosing long-term car rental. If for companies we have seen the possibility of deducting from a tax point of view, private individuals can also benefit from numerous aspects.
Let’s say right away that most of the rental companies do not provide an economic advance and there are no additional taxes, in addition of course to the payment of the monthly fee. By paying a certain amount established by the contract, you have no other payment obligations, also because the company takes care of the other costs, such as the package of services relating to maintenance and insurance.
So those who choose the rental formula can count on a fixed fee for which there can be no economic variations of any kind. From this point of view, the formula is really very advantageous, also because various bureaucratic problems are eliminated and there is a lot of ease of access to the rental, also saving time.
Regarding the duration of the contract, it is possible to deal with some flexibility. In fact, depending on the user’s needs, the long-term rental contract can have a duration between 36 and 48 months. In any case, if there are variations relating to a specific period, it is mandatory for the company to count the payment only for the time duration in which the car was used. So there are no excess fees to pay.
With the long-term rental formula you can always have a new vehicle, which therefore can be used to the maximum of its performance. In the event of an accident, the car rental company is required to take care of the paperwork related to the accident and also provides a replacement car.
Article written by PinkItalia editorial staff
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