That of deductibility of telephone expenses it is a topic of certain interest for both freelancers and companies, given the possibility of obtaining important tax relief. But which expenses are actually deductible and, again, what is the difference with those that are deductible?
Generally speaking, it is normally possible to deduce up to 80% of fixed and mobile telephony expenses, paying attention however to the necessary exceptions provided for by law. Furthermore, it is always useful to seek the advice of an accountant to check for any regulatory changes from year to year or, again, the presence of temporary bonuses and incentives.
How to deduct telephone costs
It is not uncommon for self-employed people, freelancers and companies to incur very high costs for telephone expenses, given the nature of their work. For this reason, it is possible to deduct part of the expenses incurred when filing your tax return, provided that your tax regime allows it.
Before going into detail about how the deductibility of telephone expenses works, however, it is useful to understand the distinction between deductible expenses And deductible expenses.
Difference between deductible and deductible telephone expenses
As already mentioned, it is first necessary to understand the difference between deductible telephone expenses and costs incurred which are deductible. Normally:
- deductible expenses are subtracted from your overall income and, consequently, allow the taxpayer to take advantage of a lower taxable income;
- deductible expenses, however, are subtracted from the gross tax that the taxpayer must pay and, for this reason, they do not change the taxable income.
As is easy to imagine, the type and share of deductible expenses – as well as deductible ones – varies depending on the tax regime to which you belong.
Deductibility of telephone expenses in the ordinary regime
For those inside the ordinary regime, Article 102 of the Consolidated Law on Income Taxes specifies that mobile or landline expenses are deductible equal to 80%. With ministerial resolution 104/E/2007, the possibility was introduced to deduct, again at 80%, also:
- financial leasing or rental fees;
- depreciation rates;
- the costs of use and maintenance of terminal equipment for electronic telecommunications services for public use.
Instead they are 100% deductible:
- expenses for vehicle telephone systems used for the transport of goods by road haulage companies, limited to one system per vehicle. Those in excess are deductible at 80%;
- the terminal equipment for communication which can be used exclusively for entrepreneurial activities, for technical reasons.
Deductibility of telephone expenses in the simplified regime
For freelancers and companies located within the simplified regimewhich provides for fewer accounting obligations for certain turnover volume thresholds, the reference for the deductibility of telephone expenses is in thearticle 66, again of the Consolidated Income Tax Act. In general, it can be deduced:
- L’80% of fixed telephone costs – including Internet connections – if the use is exclusive for business purposes;
- The 50% of the fixed telephone costs if the use is mixedi.e. not only reserved for business purposes, but also personal ones;
- The 50% of mobile telephone costs.
Deductibility of telephone expenses in the flat rate regime
The flat rate regimeintroduced in 2014, is now the preferred option for self-employed and freelance professionals who, remaining within the turnover limits established by law, can take advantage of special tax breaks.
Precisely by virtue of these benefits – such as the profitability coefficient and the fixed substitute tax – it is not possible to take advantage of the deductibility of any expense, including costs incurred for mobile or landline telephony.
How many cell phones can be deduced?
One of the most frequent doubts regarding the deductibility of telephone expenses is related to total number of cellular devices which can be deducted for tax purposes. How do we proceed?
In reality, there are no precise limits on the number of mobile phones: all devices necessary for carrying out one’s business can be deducted, as long as their use for business or professional purposes is demonstrable.
A look at deductible telephone expenses
At this juncture, it is also useful to take a look at deductible telephone expenses, i.e. those that do not influence the taxable income but are subtracted from the gross tax. Generally, deductibility mainly concerns VAT and, as provided for by Presidential Decree 633 of 1972, derives from the type of use of telephone equipment.
Deductibility of telephone expenses for exclusive use
Telephone costs, both fixed and mobile, for exclusive use – therefore relating solely to the activity carried out – are 100% deductible. The deduction includes:
- the purchase of terminals, such as mobile phones and landlines;
- the purchase of telephone or internet lines;
- maintenance costs.
Deductibility of telephone expenses for mixed use
When, however, the telephone costs arise from promiscuous use – therefore the telephone needs satisfy both personal and professional purposes – deductibility is up to 50%.
Also in this case, the costs of purchasing fixed and mobile terminals, telephone and internet connection lines and maintenance costs will be included.
Deductibility of telephone expenses and flat rate regime
It is useful to underline that, for those within the flat-rate regime, the same considerations made for deductible costs also apply to deductible expenses.
Precisely because the flat-rate regime enjoys special benefits, such as the aforementioned fixed substitute tax and the profitability coefficients depending on the type of activity carried out, it is not possible to deduct no telephone costs.
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