New fringe benefit for company cars in 2025
01/13/2025
Fringe Benefit for Traditional Cars More Expensive,
Benefits for Electric Vehicles
Recently approved "Legge di Bilancio 2025" introduces significant changes to the calculation of the fringe benefit for company cars provided for personal use by employees. The main change is the shift from using CO2 emissions as the basis to vehicle fuel type, rewarding electric cars and penalizing traditional internal combustion engine vehicles.
For electric vehicles (purely battery-powered), the fringe benefit is calculated using 10% of the mileage cost, while plug-in hybrid vehicles will be taxed at 20%. Traditional vehicles will continue to follow previous rules based on CO2 emissions: 25% for up to 60 g/km, 30% between 60 and 160 g/km, 50% between 160 and 190 g/km, and 60% above 190 g/km. As a result, fringe benefits for traditional cars will be more expensive, incentivizing companies to opt for greener solutions.
These changes apply to newly registered vehicles and are based on the ACI mileage cost, assuming a standard mileage of 15,000 km. The new provisions come into effect for contracts signed starting January 1, 2025.
In addition, Legge di Bilancio 2025 introduces several incentives for electric vehicles and other sustainable measures:
For electric vehicles (purely battery-powered), the fringe benefit is calculated using 10% of the mileage cost, while plug-in hybrid vehicles will be taxed at 20%. Traditional vehicles will continue to follow previous rules based on CO2 emissions: 25% for up to 60 g/km, 30% between 60 and 160 g/km, 50% between 160 and 190 g/km, and 60% above 190 g/km. As a result, fringe benefits for traditional cars will be more expensive, incentivizing companies to opt for greener solutions.
These changes apply to newly registered vehicles and are based on the ACI mileage cost, assuming a standard mileage of 15,000 km. The new provisions come into effect for contracts signed starting January 1, 2025.
In addition, Legge di Bilancio 2025 introduces several incentives for electric vehicles and other sustainable measures:
- Subsidies up to 20% of the purchase price (capped at €10,000 per vehicle) for electric and hybrid vehicles.
- 100% VAT deduction for electric vehicles and 70% for hybrids (with CO2 emissions under 60 g/km).
- Tax credits for charging infrastructure up to 30% for businesses installing EV charging stations.
- Mileage reimbursement increase (15-20%) for electric cars compared to traditional ones.
- Tax credit for fleet renewal, offering a 10% credit for companies replacing at least 30% of their fleet with low-emission vehicles (electric or plug-in hybrids).
Mandatory Traceability for Employee Expense Reimbursements.
Also, as part of the numerous regulations regarding employment, Article 1, paragraphs 81-83 of Law 207/2024 introduces new rules for travel expenses and reimbursements related to meals, accommodation, travel, and transport, including taxis and NCC. These expenses must now be paid through traceable methods (debit cards, credit cards, prepaid cards, bank or cashier's checks) to be deductible for IRPEF/IRES and IRAP purposes and to avoid taxation for employees' work income. The only exception to these restrictions is for transport using public transport services.