Skip to content On 28 November 2024, the Italian Revenue Agency published its Reply No. 231/2024, providing guidance on the tax treatment of scholarships paid by employers to their employees’ children.
This ruling clarifies the applicability of Article 51(2)(f-bis) of the Consolidated Income Tax Act (TUIR). In fact, it establishes when such sums are excluded from the taxable income of employees and what are the document retention obligations of the grantor.
The applicant’s question
The applicant explained its intention to provide scholarships for children of employees on the basis of scholastic or academic merit. The scholarships, which concern both school and university level, include excellence requirements such as high marks and passing exams. The requesting entity therefore asked to confirm the possibility of applying the tax exemption to the sums paid pursuant to Article 51(2)(f-bis) of the Consolidated Income Tax Act and whether it was necessary for employees to submit documentation proving that the sums were used for educational purposes.
The Agency’s reply
As usual, in its reply, the Agency recalls the relevant legislation and practice on the subject.
According to Article 51(1) of TUIR, any sum or value received by the employee in connection with the employment relationship constitutes taxable income. However, Article 51(2)(f-bis) introduces an exemption for ‘sums, services and benefits paid for the use, by family members indicated in Article 12, of education and education services’.
The Agency also refers to Circular No. 238/E of 2000, which clarified that exempt educational expenses include:
- school fees;
- university fees;
- textbooks; and
- school merit awards.
In addition, Circular No. 28/E of 2016 is recalled, which specifies that such sums may be paid either directly or as reimbursements, provided they are documented for educational purposes.
The Agency’s conclusions
With respect to the case under discussion, the Agency clarifies the following:
- Exemption from taxable income: The Agency confirmed that scholarships intended to reward the achievement of levels of scholastic or university excellence fall under the provision of subparagraph f-bis. Consequently, such sums do not contribute to the formation of employment income.
- Documentation not required: Unlike other educational benefits, it is not necessary for employees to provide documentation proving the use of the sums, as these grants are not intended to cover specific expenses, but to incentivise academic merit.
With Reply No. 231/2024, the Agency thus offers a clear reference for employers wishing to promote academic merit among the children of their employees. This interpretation consolidates the inclusive approach of the Italian tax system, which recognises and incentivises education as a tool for growth and development.