From the Italian Tax Authority an important news in the field of Flexible Benefits
The Italian Tax Authority recently approved the Bonus Studenti, i.e. Students Bonus dedicated to families for distance learning attendance.
With Resolution no. 37/E/2021, it specified that the reimbursement of expenses for the purchase of PCs, tablets and laptops for the attendance of distance learning, in Italian so-called DAD, is to be considered exempt when, as part of a corporate welfare plan, it is offered to all or to some categories of employees.
According to Article 51, paragraph 2, letter f-bis), TUIR, “the sums, services and benefits provided by the employer to all employees or categories of employees for the use, by family members specified in Article 12, of education and education services, including pre-school, including supplementary services and canteen related to them, as well as for the attendance of playgrounds and summer and winter centres and scholarships for the same family members” do not contribute to the income.
As clarified by the Italian Tax Authority, with regard to the way in which the above-mentioned services are provided, the provision confirms the possibility for the employer to provide the education and training services directly or through third parties, as well as through the payment to employees of sums of money to be used for the purposes indicated, also as reimbursement of expenses already incurred, provided that it acquires and retains documentation proving the use of the sums by the employee, consistent with the purposes for which they were paid.
In relation to the health emergency, several legislative measures have been issued, which, in providing for the total or partial suspension of teaching activities, have provided for the adoption by schools and universities of flexible forms of organisation of teaching activities, or to ensure their use through distance learning (so-called DAD).
With this type of teaching, PCs, laptops and tablets are the necessary tools to ensure attendance in the so-called “virtual classroom” and, consequently, the relationship between teachers and students.
The Tax Administration concludes that, in this context, PCs, laptops and tablets are fundamental devices to allow distance teaching, whose use is aimed at education and instruction; therefore, the reimbursement of expenses incurred by the employee for their purchase and subsequently reimbursed by the employer should not generate employment income, pursuant to Article 51, paragraph 2, letter f-bis), TUIR.
The above-mentioned reimbursement, according to the Italian Tax Authority, does not generate employment income and is therefore not taxable, as it relates to school expenses that are essential for all students, especially in times of Covid emergency.
However, in order to obtain the exemption scheme, certain requirements must be met:
- the company to which the employee belongs must have activated a company welfare plan. The employer, therefore, is obliged to provide education and training services and works within the expenditure limits;
- welfare services must be provided either directly by the company or by reimbursing the employee;
- any employee who intends to claim a reimbursement of expenses is required to present the appropriate documentation proving the actual performance of the lessons in distance learning, issued by the educational institution.
As part of a corporate welfare plan, the benefit may be directed not only to children, but also to spouses or other family members such as daughters-in-law, parents, in-laws, brothers and sisters.
The text of Article 51 of the Consolidated Income Tax Law is in fact the result of a series of amendments assimilated with the 2016 Stability Law, through which the education and instructional services available to an employee’s family members, including those who are not fiscally dependent, have been expanded and better defined, and are limited to sums, services and benefits relating to the attendance of nursery schools, holiday camps and scholarships.
Why is this such a significant welfare innovation?
This appeal can be considered particularly innovative for several reasons:
- From a substantive point of view, because these expenses are very frequent among workers.
- From a conceptual point of view, because the Flexible Benefits allowed by the Law are normally only services (with the exception of school books), while in this case they are goods (PCs, tablets and laptops).
More generally, this appeal is a perfect example of how the legislator and the competent authorities are interested and willing to evolve the welfare legislation to better adapt it to the real needs of workers and companies. In this case, the triggering factor for the evolution of the legislation was the pandemic and the consequent change in the conduct of educational activity, and this gives hope that in the future there may be new developments equally appreciated by welfare users.