Company cars, how to calculate the normal value of fringe benefits
Flat-rate mileage should be excluded. If the vehicle is company-owned, it should be based on rental costs
3' min read
3' min read
The value of the fringe benefit of motor vehicles registered by 2024 and assigned or reassigned, by means of contracts entered into or by physical delivery of the vehicle, on or after 1 July 2025, must be determined in accordance with the "normal value" criterion set forth in Article 51, paragraph 3 of the Consolidated Income Tax Act and, therefore, by means of analytical quantification. In general, this method must be applied where the legislator has not indicated a lump-sum criterion for the valuation of the benefit, as clarified by the Revenue Agency (Circular 10/E/2025 and Resolution 46/E/2020).
These are recurring cases, e.g. with regard to passenger cars registered in 2024 and acquired through leasing, rental or in ownership with handover to the company as of July 2025. Even more frequent is the case of cars registered in 2024, or in earlier years, to be redeployed as of July 2025, following the return of retired or retiring employees. This will also be repeated in the years to come.
Calculation and Exceptions
.In essence, the benefit must be valued for tax purposes only for the part attributable to the private use of the vehicle, thus separating from the relative normal value the use in the interest of the employer. Operationally, it is necessary to identify appropriate criteria and objective elements, documentally ascertainable, in order to demonstrate - also in the event of tax audits - the value of the benefit relating to the actual share of personal use of the vehicle.
Informally, on the occasion of Telefisco 2021, the Inland Revenue Agency had suggested that 'from the value of the leasing or rental fee paid by the employer (which therefore constitutes the gross normal value, ed.) should be separated the mileage allowance determined on the basis of the ACI rates multiplied by the number of kilometres travelled in the interest of the employer'. In terms of business mileage, this includes both journeys within the municipality where the place of work is located and outside.
However, for some drivers with long business mileage, e.g. sales figures, this formula (difference between gross normal value and mileage allowance for business mileage) may not be suitable for the purpose, as it may be negative in value, even if there is some personal use of the vehicle. In these specific cases, the tax value of the benefit could be obtained from the gross normal value related to the percentage of private use, possibly calculated as the difference between total and business mileage, i.e. according to the following formula: value of the benefit = (personal km / total km) × gross normal value.
