Article 1(1)(b) of Decree-Law No. 84 of 17 June 2025 amended various provisions of the TUIR by restricting the requirement of traceability of expenses deductible from taxable income to those made within the Italian territory, exempting from this requirement the expenses incurred abroad.
More in detail, in order to obtain reimbursement of travel, accommodation, food and transport expenses and prevent them from being included in taxable income, an indispensable condition is that such expenses must be made by traceable means, such as bank or postal payments or other digital payments that can be verified by the tax authorities.
As the Tax Agency clarified in its Tax Ruling No. 230/E/2020, “[t]he indication […] as to the other traceable means of payment allowed in order to be entitled to the deduction must be understood as explanatory and not exhaustive. […] it is considered, in line with what has already been specified in Resolution No. 108/E of 3 December 2014 […] that ‘other means of payment’ are those that “guarantee traceability and identification of its author in order to allow effective controls by the tax authorities”.
Specifically, the Agency addresses the question of the applicability of this notion to payments via smartphone’. Highlighting how “[i]n order to use the service, it is necessary to open an account and connect it to one’s bank account[, so that each account is linked to a specific user and a specific mobile device [and that] the payment is made exactly by the account holder”, the Agency states that “such means of payment can meet the traceability requirements established by Article 1, paragraph 679, of the 2020 Stability Law, only if from the accounting records of the current account of the bank, to which the electronic money institute is connected, or from the transactions of the app itself, it is possible to guarantee the traceability and identification of the author of the payment in order to allow effective controls by the Tax Administration” (a statement supported by the constant jurisprudence of the Supreme Court that recognises to cash the nature par excellence of non-traceable means. See ex multis Cass.. Court Ord. No. 30899/2024; Cass. No. 15645/2017).
On the other hand, this constraint is not imposed with regard to expenses incurred abroad, where such payments may not be possible due to the lack of the relevant infrastructure.
The reimbursement of such expenses does not affect the taxable amount even where they were incurred by non-traceable means, primarily cash.
As indicated by Article 1(2) of the hereby analysed decree, ‘[t]he provisions of subparagraph 1(b) [previously enunciated] shall apply to the expenses for board, lodging, travel and transport by means of non-scheduled public transport services referred to in Article 1 of Law No. 21 of 15 January 1992, incurred as of the taxable period in progress at the date of entry into force of the present decree’, i.e. as of 1 January 2025. Said differently, the amendment to Article 51(1) (fifth sentence) TUIR retroactively covers all expenses -even those already incurred – of the current calendar year.
Following the same rationale, the decree-law in question also intervened on Article 54 by introducing paragraph 2-bis. The amended provision thus provides that, also with respect to self-employment income, expenses “incurred in the territory of the State, relating to food, lodging, travel and transport by means of non-scheduled public transport services referred to in Article 1 of Law No. 21 of 15 January 1992, are included in the formation of income if the payments are not made by bank or postal payment or by other means” (for the definition of suitable means, see what is stated with respect to Article 51(1) (fifth sentence).
Finally, the same principle extends to the cases provided for in Articles 54-ter(5-bis)(Reimbursements and charge-backs-income from self-employment), 54-septies(6-bis)(Other expenses- self-employment), 95(3-bis)(Employment expenses – Determination of the tax base of resident companies and business entities) and 109(5-bis)(General rules on components of business income).
