The perfect storm between taxation and inflation

This prejudice still sees the car as such, today as 70 years ago, as a status symbol to be torn down in favour of everyone going by bicycle, including the disabled and the elderly. It is a fact that there are still cars that are status symbols, but in a country like Italy, which has 26 million households and 40.8 million cars on the road, there are 1.6 cars per household, which in the vast majority of cases are indispensable tools for living a normal and dignified life.

If we move from the world of people to the corporate world, the effect of the car price increases triggered by the pandemic has not only been very significant, but is also greatly enhanced by a tax regime that is so vexatious that it has no parallel in the world.

This is also demonstrated by the fact that cars purchased by companies in 2023 accounted for 67.2% of the total in Germany, 57% in the UK, 53.4% in France, 55.9% in Spain and only 44.5% in Italy. Turning to the way in which harassment is triggered, it is enough to consider a comparison of the situation among the five largest Western European countries for a company car with a price, excluding VAT, of 40 thousand euros. A sum, this considered, which, with the sharp increases of recent years, is certainly very close to what is needed to have a company car capable of fulfilling its function in terms of both efficiency and image.

A plan, the latter too, which for a company is not an optional extra but an important element of communication and building a solid reputation. And you certainly don't need marketing experts to understand this. You just have to look at reality without ideological blinkers.

Returning to the comparison, with the price of 40,000 euros net of VAT, with VAT in Italy the cost of the car we are considering rises to 48,800 euros, in Spain we are at 48,400 euros, in France and Great Britain we are at 48,000 euros and in Germany we drop to 47,600. As you can see the differences are not appreciable, but the best is yet to come.

How much of this cost remains with the company, i.e. it is neither deductible nor tax-deductible? In Italy this cost is EUR 41,665, in France it is EUR 21,700, in the UK it is EUR 25,800 and in Germany and Spain it is zero.

Given these figures, the question that arises is: how does an Italian company with a fleet of cars that has a significant impact on the company's costs (and thus also on the costs of its products) compete with its competitors on the European and world markets?