Italy Tax Agency Clarifies Tax Treatment of Company Car Fringe Benefits Under Income Tax Code

The Italian Revenue Agency Jan. 21 issued Letter No. 14/2026, clarifying the tax treatment of company car fringe benefits under the Income Tax Code (TUIR). The taxpayer, a resident company, adopted a policy assigning low-emission vehicles to employees in key managerial roles, allowing mixed business and personal use. The taxpayer sought clarification on whether employee payments exceeding the conventional fringe benefit value could be treated as non-taxable and deducted from gross variable compensation. Upon review, the Tax Agency clarified that: 1) only amounts covering the conventional fringe benefit value could be subtracted when determining taxable income; 2) additional amounts paid ...