Benefits in kind – New annual non-taxability limit and reimbursement of household bills

The annual non-taxability limit for goods and services provided by employers to employees has been increased, only for 2022, from 258.23 euros to 600.00 euros and, for the first time, will take into account sums paid or reimbursed by employers for the payment of household bills incurred by employees.

These represent two big changes in terms of corporate welfare and have been introduced by article 12 of Decree Law no. 115 of 9 August 2022, the so-called “Aid Decree bis”), which:

  • extends also for the current tax year the temporary derogation to the general annual non-taxability limit under Article  51, paragraph 3 of the TUIR—already recognised, albeit only for 2020, by Article  112, paragraph 1 of Decree Law  104/2020 and subsequently extended, only to 2021, by Article 6 quinquiesof Decree Law 41/2021, as reported in our previous newsflashes of 2 September 2020 and 24 May 2021—not doubling it from 258.23 to 516.46 euros, as was the case for the two previous tax periods, but setting it at 600.00 euros;
  • extends non-taxability to include sums disbursed or reimbursed by employers for the payment of household bills for water, electricity and natural gas incurred by employees, introducing, for the first time, the possibility of treating this reimbursement as a fringe benefit.

This will therefore provide companies, also for this year, with a useful tool that supports their employees with a contribution—possibly also recognised individually and in the form of goods and/or services—that is more convenient than a cash disbursement for both employers and employees, considering that it is not taxes nor subject to social security contributions. With regard to the disbursement and reimbursement of expenses incurred for household bills, it is assumed that, for them not to be taxable, employers will have to acquire and retain appropriate documentation attesting to the use of the sums disbursed or reimbursed for the intended purpose.

Thanks to this new legislation, employers will be able to provide all or even some of their employees, with goods or services such as, for example, shopping and/or fuel vouchers and, for the first time, the disbursement or reimbursement of expenses incurred for household bills, thereby optimising the tax and social security contribution impact of available company budget. To this end, it is always useful for companies to map in advance those goods and services already formally recognised to employees (and, above all, those from which they might benefit unknowingly but which, despite this, might still be tax-relevant). The aim of this is to avoid unintentionally exceeding the annual limit of 600.00 euros and consequently rendering taxable retroactively the entire value of the goods and services recognised during the year.

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