Corporate Welfare

Fringe benefits: confirmations and novelties for bills, rents, mortgages and company cars

Starting from 1 January, new company car regulations penalising thermal engines and rewarding electrics and plug-in hybrids

by Diego Paciello

31 December 2024

3' min read

Key points

Fringe benefits: general rules
Fringe benefits: a special case, the company car

3' min read

With the budget law examined by the parliament, a number of interventions concerning the tax treatment of employees' use of goods and services provided by employers, the so-called fringe benefits, were confirmed, among which the change in the percentages for the calculation of the taxable share of company cars granted for mixed use stands out.

Fringe benefits: general rules

The legislator confirms, with an intervention of multi-year (three-year period 2025-2027) scope for the first time in recent years, the exemption to paragraph 3 of Article 51 of the TUIR already provided for the current tax period. The value of goods sold and services rendered to employees, as well as the sums disbursed or reimbursed to them by their employers for the payment of integrated water, electricity and natural gas utilities, rental expenses and/or for interest on mortgages relating to the main home will not be taxable within the overall limit of €1,000, raised to €2,000 for workers with dependent children.

The implementation of the measure will continue to be conditional on the employer sending an appropriate notice to the unitary trade union representatives (where they are present) and on the employees submitting an appropriate declaration to the employer stating that they are entitled to it, indicating the children's tax code.

The three-year duration of the provision will allow employers to plan the budget for possible employee initiatives in the medium term, making the rule more effective than in the recent past.

Fringe benefits: a special case, the company car

Among the most significant new features, paragraph 48 of the manoeuvre introduces substantial changes to the calculation of the benefit represented by the private use of cars granted to employees for mixed use. For newly-registered cars, motorbikes and mopeds granted under contracts entered into from first January 2025, the value of the taxable base will be 50% (no longer 30%) of the amount corresponding to a conventional mileage of 15 thousand kilometres calculated on the basis of the ACI tables, which the Ministry of Economy and Finance publishes by 31 December of each year, with effect from the following tax period. This percentage is reduced to 10% for batteryfull electric vehicles and 20% for plug-in hybrids. Any deduction from the net amount deducted by the employer from the employee's paycheck in order to charge him or her, in whole or in part, for the value of private use of the vehicle must be deducted from this amount (see the table to the side for all subsequent steps).

In the absence of such a deduction, the notional value calculated in accordance with the foregoing will be subject in full to taxation on the part of the employee and to contribution (for the purpose of calculating both the employee's and the employer's share of contributions). In the event, on the other hand, of the application of a chargeback to the employee, the notional value calculated in accordance with the foregoing will be subject (if positive) to taxation and contribution net of the amount charged back.

VEICOLI AZIENDALI: COME CAMBIA IL CALCOLO PER DATORI DI LAVORO E DIPENDENTI

The first solution is certainly more convenient for the employee, the second for the employer, as the latter will collect the deduction and consequently save the social security contributions to be borne by the employer calculated on a lower taxable amount. Without any deduction, the employee pays taxes and contributions (about 10%) on the conventional value established by the ACI tables, the employer pays his own contributions (about 30%). Should the employer make a deduction from the net, the employee will pay neither taxes nor contributions on that amount, and the employer will pay his own contributions.

If, on the one hand, the change in the percentages for the calculation of the benefit for company cars granted in mixed use will lead to an important and generalised increase in taxable values for cars with combustion engines (over 60 per cent), on the other hand, paradoxically, there may even be a reduction in taxable values for highly polluting cars, from the current 60 per cent to 50 per cent.

For cars already registered and not yet assigned and those assigned but not yet delivered, on the other hand, the applicablelaw appears to be anything but obvious.