C CIRCULAR No 19 / E Central Management Legislation and Litigation Rome, 7 March 2008 SUBJECT: Deduction for subscriptions to public transport

(Article 1, paragraph 3 09, Act No. 244 of December 27, 2007). INDEX 1 2 3 ALLOWED SUBJECT TO DEDUCTION (BENEFICIARIES) ........... 2 expenditu re eligible to deduct ........................... 3 DOCUMENTATION FOR deduct ... ............ 5 3.1. Ticket name .............................................. ................ ................... 6 3.2. Ticket no name ...................................... ....... ............................. 6 2 INTRODUCTION The Law 244, December 27, 2007 (Finance Act 2008) art. 1, paragraph 309, introduced for 2008, a new tax relief on expenses incurred for the purchas e of subscriptions to public transport services. In particular, the paragraph in question recognizes a deduction from gross income tax of 19%, up to the amount, for expenses incurred before December 31, 2008 to purchase subscriptions to ser vices "of local public transport, regional and interregional, for an amount not exceeding $ 250 (with a tax saving, then, to 47.50 euros). The rule specifies th at the deduction it provided that those expenses are not deductible in determini ng individual income that form the total income (for example, where the subscrip tion fee for the cost of transport is inherent and therefore deductible from bus iness income or self-employment). The deduction even if it is incurred in the in terests of family members who have been charged under Article. 12 TUIR. 1 Subjects allowed to deduct (beneficiaries) The ratio of available comment is due to the will of legislature to promote the use of public transport for the revival of collective sustainable mobility, urban and suburban, encouraging in the context of environ mental policy measures, including reducing emissions of pollutants. The technica l report to the Finance Act in calculating the impact that the facility produces tax revenues refers to "students and workers using public transport to travel t o the place of 3 study and work "in particular" to the average costs of annual subscriptions for students and workers and urban and suburban commuters. Although the text of the rule does not refer to the period of subscriptions or entities mentioned in the report, the Court finds that the dedu ction is given to those who use public transport for their daily mobility, such as students, workers, pensioners. This is corroborated by the fact that the iden tification of the owners of the benefit derives automatically the type of ticket purchased (subscription), as specified in the next paragraph. 2 Expenditure eligible to deduct the income tax deduction, introduced by the invok

ed Article 1, paragraph 309, On the expenditure incurred for the purchase of subscriptions to public transpor t services, local, regional and interregional cooperation. In this regard it is considered that the purpose of deduction under consideration is meant by "subscr iption" a ticket entitling the holder authorized to make unlimited travel for se veral days, on a certain route or the entire network, in a specified time period . Based on the ratio of the standard, under the preceding paragraph, there is, h owever, that they are permitted to deduct only the cost of subscriptions that us e does not imply an episode of public transport. It is considered therefore that the benefit of subsidy tickets which they last hour, although higher than daily , such as tickets to long lasting 72 hours or so-called integrated transport car ds that include even more services to those 4 transport such as the tourist maps that besides the use of public transport allo w entry to museums or performances. For public transport services, local, region al or interregional means activities involving the transport of persons, for gen eral access, provided by public entities or by private foster public service bas ed on specific licenses or permits from public entities. Fall into that category any public transport service, regardless of the means of transport, operating c ontinuously or periodically with routes, times, frequencies and tariffs. Given t he broad scope reference "local€regional and interregional "contained in the ru le, the benefit may relate to subscriptions relating to public transport taking place both within a region, as by crossing several regions. The deduction respon sible only for expenses incurred during 2008 and pursuant to a cash basis which is the principle of charging time on typical charges. In this regard states that the deduction can be calculated on the entire expenditure in 2008 for the subsc ription, even if it expires in the next tax period (eg, subscriptions valid from 1 March 2008-28 February 2009). It should be pointed out that the maximum deduc tion of $ 250 must be considered to cumulative costs incurred by the taxpayer fo r their subscription and that of dependents. This follows clearly from the techn ical report accompanying the bill of financial reporting. The use of the deducti on is allowed within the limits of capacity of taxes due. Failure to use the ded uction for incapienza, this is lost, with no possibility to postpone the fruitio n next year. 5 3 Documentation to qualify for the deduction to deduct income tax on the purchase of subscriptions to public transport services taxpayers are required to acquire and maintain specific documentation to be submitted if requested by the office and / or when completing the tax return with the assistance of Caf or professional i ntermediaries. First, the taxpayer is required to keep the ticket. In this conne ction it is recalled that the decree of June 30, 1992 - on determining the chara cteristics of the ticket on the collective transport of passengers and vehicles and luggage - established in Article 1 that the provision of collective public t ransport of passengers and vehicles and luggage, carried by any means, and for w hich it is not required if the invoice is not requested by the customer, transpo rt tickets fulfill the function of proof of purchase. Moreover, according to tha t decree, the travel ticket must have in any case the following: a) company name or business name or name of individual or logos identifying the undertaking and VAT number of the issuer the ticket or making the provision of transport, b) a description of the characteristics of transport, c) Amount of fees payable d) se rial number; e) date to be entered for the issuance or use. The indication refer

red to in subparagraphs b) and c) can be expressed in alphanumeric code whose de coding has been previously communicated to the appropriate office of the revenue , or printed on the ticket itself. 6 Transport companies which make use of that power to be displayed in alphanumeric code, the amount of fees due and / or a description of the transport, are requi red to publish the decoding of these codes for 2008, including through electroni c channels . 3.1. Ticket name on the ticket name, the taxpayer is required to keep should be listed and the length of the expenditure. In order to demonstrate that the expen diture was in 2008, the taxpayer must also maintain the bill may request the ope rator of the transport service or any other documentation proving the date of pa yment. If the taxpayer himself is unable to obtain that information (event possi ble, especially because of the VAT treatment of supplies of tickets) the expendi ture incurred shall be deemed to coincide with the commencement of the subscript ion (for eg. for a valid subscription name that takes from 1 February 2008, the expenditure incurred on that date will be considered). In case of release or cha rge the ticket made in electronic format requires certifies that contains the es sential information to classify the ticket as well as any other useful informati on to identify the service rendered (subject to user indication, duration, expen diture and the date of incurring of expenditure). 3.2. If ticket not name the ticket is purchased the same name must be preserved and accompanied by a self made in the manner and 7 time allowed by law (declaration in lieu of an affidavit of the DPR 28 December 2000, No. 445, Art. 47€whose signature can not be authenticated if accompanied by a photocopy of the identity of the subscriber) made by the taxpayer stating t hat the subscription has been purchased for the taxpayer or his family dependent s. The Regional offices will ensure that the principles enunciated in this circular should be applied with uniformity.