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Italy: Fringe Benefits up to €3.000

Chance to distribute employees up to €3.000 tax-free by January 12, 2023.

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The Quater Aid Decree increases from 600 to 3,000 euros the amount of fringe benefits that do not contribute to the formation of taxable income for the employee.

Fringe benefits: what they are and how they work

Article 51, paragraph 3, TUIR, states, in its original wording, that:

“The value of the goods sold and services provided does not contribute to forming the income if the total amount does not exceed, in the tax period, 500,000 lire; if the aforesaid value is higher than the aforesaid limit, the same contributes entirely to forming the income.”

The aforementioned regulation, therefore, allows the employer to provide its employees with “compensation in kind” which, up to a certain amount, is exempt from taxes and contributions. “Compensation in kind” means the supply of goods or services in lieu of monetary payment, even if, they are, however, highlighted in the paycheck.

For example, the following goods or services are included among the fringe benefits:

    • Meal Vouchers
    • Fuel vouchers
    • Cellular phone
    • The company car
    • Housing
    • Holiday Gifts
    • Shopping vouchers
    • Insurance policies
    • etc.

The original limit of 258.23 euros had already been raised to 600 euros by the Decree Aids bis (art.12 DL 115/2022).

It is important to remember that the fringe benefits are a gift. There is therefore no obligation on the part of the employer to provide them. This expense is a company’s responsibility and does not represent a contribution reimbursed by the State.

2022 news: up to 3,000 euros tax-free for employees

The Quater Aid Decree was published on November 18, 2022, and introduced important innovations in the field of fringe benefits.

The limit of 600 euros is increased to 3,000 euros.

Therefore, limited to the 2022 tax period, by derogation from art. 51, paragraph 3, TUIR

the value of the goods sold and services provided to the employees up to the amount of 3,000 euros does not contribute to forming the income

Household utilities: bills are also included in the bonus of 3,000 euros


For the year 2022, the payment/reimbursement of domestic utilities is also included among the tax-free benefits. Therefore, the employer can either pay directly or reimburse the employee for bills related to electricity, natural gas, and integrated water service.

Which utilities are included

The following are included:

    • utilities relating to residential properties owned or held by the employee;
    • Utilities relating to residential properties owned or held by the spouse or family members of the employee provided that they actually bear the expenses. Family members are those established by Article 12 of the TUIR;
    • utilities for domestic use, including those in the name of the condominium and split among its inhabitants for their fee. Therefore, expenses incurred by a condominium for heating or water for domestic use are also included;
    • utilities for domestic use that, despite being in the name of the landlord, are charged back to the tenant. To be eligible for the benefit, the expense must have been completely charged back to the tenant. Also in this case, it is possible to receive the benefit even if the expense was paid by the spouse or family members cited by Tiur, Article 12
    • utilities resulting from multiple invoices;
    • utilities resulting from invoices dated 2023 as long as they relate to consumption carried out in 2022 and paid/reimbursed by the employer by 12 January 2023.

Mandatory documentation

The employer must request and keep, for possible checks:

a) The documentation to justify the amount spent. For example:

    • the invoice certifying the domestic utility
    • the document certifying its actual payment

In this case, it must be paid attention to ensure compliance with the legislation on the processing of personal data and privacy.

or alternatively

b) A substitute declaration of deed of notoriety, made pursuant to DPR no. 445 of 2000, with which the employee declares to be in possession of the documentation proving the payment of domestic utilities. In this case, the documentation must be kept by the employee in case of inspection.

Details that the substitute declaration of deed of notoriety must contain

The declaration must contain the elements necessary to identify the aforementioned documentation. It must contain:

    • Invoice number and date
    • type of utility
    • amount paid
    • date and method of payment
    • indication of the holder. In the event that the holder is different from the employee, it is also necessary to indicate the relationship between this one and the employee.

The declaration in lieu of deed of notoriety compulsory in any case

c) In addition to the aforementioned documentation, the employer must in any case request an additional declaration in lieu of the act of notoriety, made by the employee pursuant to Presidential Decree no. 445 of 2000.

With this declaration, the employee certifies that the same invoices have not been the subject of a request for reimbursement from other employers.

This is to prevent the same expense from being reimbursed twice.

Fringe benefits 3000 euro: who can apply, the methods and conditions to obtain it

Who is entitled to the fringe benefits 3,000 euros

The workers benefiting from the provision are:

    • holders of employees’ incomes
    • holders of income assimilated to those of an employee (thus also including coordinated continuous employees

for which the income is determined according to Tuir, art. 51.

It is therefore possible to recognize the fringe benefits in question also to the directors of the companies. The provision of such goods and services or the payment/reimbursement of domestic utilities will be the subject of a shareholders’ resolution.

The terms and conditions

Circular 35/E of 4 November 2022 clarified some aspects of the methods and conditions related to the provision of corporate fringe benefits:

    1. they can also be paid by the employer ad personam. This means that there is no obligation to provide such goods and services to all employees. The employer may choose to pay them only to certain employees.
    1. the maximum amount of 3,000 euros that does not contribute to the income of dependent labor of the goods provided is to be considered a limit. Therefore, paying a higher amount involves subjecting the entire amount to taxation (even the part below the limit).

Note: It is therefore necessary to carefully check which goods and services were provided during the year to the employee.

Deadline by which the bonus of 3,000 euros must be disbursed

The timing for the provision of the fringe benefits is very important so that such compensation in kind is considered exempt from taxes and contributions.

In the case of Fringe benefits, it is applied what the Italian legislation calls “principio di cassa allargato” (expanded cash principle). This means that the goods, services, payment or reimbursement of bills must be paid by no later than January 12, 2023.

The amount paid beyond that date will be considered a fringe benefit relating to the tax year 2023 in which the tax-free limit will return to the original amount of 258.23 euros.

With the Fuel Bonus the tax-free amount can reach up to 3,200

Article 2 of the Decree-Law of 21 March 2022, no. 21 stated that:

“For the year 2022, the amount of the value of gasoline vouchers or similar securities given by private employers to employees for the purchase of fuel, within the limit of €200 per worker, does not contribute to the formation of income pursuant to Article 51, paragraph 3, of Presidential Decree no. 917 of 22 December 1986”

Circular 35/E of November 4, 2022 also clarifies that the novelty foreseen for the year 2022 in the field of fringe benefits represents an additional facilitation, different and autonomous compared with the fuel bonus.

It will therefore be possible to provide exempt goods and services to employees up to the amount of 3,000 euros in addition to fuel vouchers up to 200 euros for a total tax-free amount of 3,200 euros.

Note: for the Fuel Bonus the same principle applies according to which upon exceeding the limit of 200 euros, the entire amount paid will be subject to ordinary taxation.

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