Company cars for mixed use – clarification on employee-requested optional features
With Ruling No. 233/E/2025, the Italian Revenue Agency (Agenzia delle Entrate) addressed a specific operational case concerning the use of company cars for mixed (business and private) purposes by employees.
The case concerns situations in which, in addition to the assignment of the vehicle, the employee may request certain optional features or accessories, paying for them through payroll deductions. Such payment would therefore represent the only amount actually due to the employer, while the value of the benefit for the use of the vehicle remains determined pursuant to Article 51 paragraph 4 (a) of the TUIR.
The question submitted to the Agency was whether, for the correct application of tax and social security regulations, the amounts withheld from the employee’s salary for such optional benefits should be excluded from the taxable base of employment income.
In its response, the Agency referred to Circular No. 326/E/1997, which clarified that when an employer provides, free of charge or otherwise, additional goods or services besides the vehicle (for example, a garage for parking), these must be valued separately in order to determine the amount subject to taxation in the employee’s hands.
The Agency also referred to Ruling No. 421/E/2023, which specified that any payment made by the employee may reduce the taxable value only if it relates to the personal use of the vehicle, as calculated according to ACI tables. Therefore, only the amounts paid for personal use—determined on the basis of the standard mileage cost set out in the ACI tables —can reduce the value of the fringe benefit.
Since optional features requested by the employee are not included in this standardized valuation, these amounts cannot reduce the taxable value of the fringe benefit calculated according to the ACI mileage tables.
Accordingly, payments made by the employee for personal optional features or accessories installed on the company car do not reduce the taxable fringe benefit value. Such amounts are simply deducted from the employee’s net salary.
New protections for workers with oncological conditions
Published in the Official Gazette No. 171 of July 25, 2025, Law No. 106 of July 18, 2025 introduces new provisions concerning job retention and paid leave for medical examinations and treatments for workers affected by oncological, disabling, or chronic diseases, effective August 9, 2025.
Leave Entitlement
Employees—whether in the public or private sector—who suffer from oncological diseases or from disabling or chronic illnesses (including rare conditions) with a degree of disability of at least 74%, are entitled to request a leave period, either continuous or intermittent, for a period of up to 24 months.
During this period, the employee retains their position, is not entitled to salary, and cannot perform any work activity. The leave is compatible with other statutory or contractual benefits and begins after all other paid or unpaid leave entitlements have been exhausted.
This period does not count toward seniority or pension contributions.
The law also extends job retention rights to self-employed workers engaged in continuous contractual relationships with clients, in accordance with Article 14 of Law No. 81/2017. In these cases, the suspension of the relationship may last up to 300 days per calendar year.
After the leave period, employees are granted priority access to remote or flexible working arrangements.
Additional Paid Leave
Starting January 1, 2026, public and private sector employees affected by oncological diseases (active or in early follow-up), or by disabling or chronic illnesses (including rare conditions) with a disability level of 74% or higher, and upon medical certification from their general practitioner or a specialist at a public or accredited facility, are entitled to an additional 10 hours of paid leave per year.
These hours supplement existing statutory and contractual protections (CCNL) and entitle the employee to the same allowance recognized for serious illnesses requiring life-saving treatments.
The paid leave may be used for medical visits, diagnostic examinations, laboratory tests, and frequent treatments.
This entitlement also extends to employees with a minor child affected by the same qualifying medical conditions.
In the private sector, the allowance is initially paid by the employer, who can recover the corresponding amount through offsetting contributions due to the social security authority (INPS).