Understanding Accounting for Petrol Card Expense Reports for Italy

In Italy, sales of petrol in petrol stations for cars and trucks do not have to be invoiced, even though petrol is VAT taxable. Every time that VAT subjects (professionals or companies) buy petrol for business purposes at a petrol station, they have to fill out a form called scheda carburante (petrol card) that documents the amount of the sale, including VAT.

Because petrol stations cannot issue invoices, the petrol card is the only document that enables VAT subjects to document the payable VAT. The card is also used when filing the annual tax declaration as proof of costs sustained by the subjects.

The petrol card is used when companies assign cars to employees. Every month employees who use company cars must attach the petrol card for the month to an expense report. The law requires the subjects to enter the kilometers traveled by each vehicle during the period on the petrol card for fiscal audit purposes. Use the Units field on the Journal Entry form to enter this amount.

The Accounts Payable employee who is responsible for expense reports management must enter all of the data that is contained on the petrol card for VAT and tax declaration purposes. Assign a specific document type when entering petrol cards in JD Edwards EnterpriseOne Accounts Payable system.

Many possible methods for accounting for petrol cards are used:

Method	Description
Enter the employee expense report.	Debit - Transit account. Credit - Payable to Employee account.
Post the petrol card in the JD Edwards EnterpriseOne Accounts Payable system.	Debit - Purchases (Petrol) account. Credit - Petrol Card (dummy supplier) account.
Close petrol debt.	To close the debt to the dummy supplier (Petrol Card account), use the manual payment process and replace the Bank account with the Transit account that you used when entering the employee expense report. Debit - Petrol Card (dummy supplier) account. Credit - Transit account.