Mileage Reimbursement in Italy: A Guide for Overseas Employers

Employees that need to travel by vehicle for work purposes will expect some type of reimbursement for those expenses, and each country treats that differently, either as a fringe benefit or a tax-free business expense.

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Because it is an easy expense policy to misuse, tax authorities will impose certain restrictions on reimbursement.

If you have employees in Italy, you will be encountering some fairly intricate rules on reimbursement, and limits on tax free travel costs.  This guide will give you a basic idea of how it is handled, which may be much more restrictive than in your own country.

What are the mileage reimbursement rates in Italy?

Mileage reimbursement rates will vary depending on whether the vehicle is owned by the employee or is an employer-provided car, and also the type of car being used.  If it’s an employer-provided car, there is an assumption that at least some use is going to be personal, so that limits the tax-free use.

Personal Car: If it’s the employee’s car, they can be reimbursed 44 cents per kilometer for business trips, tax-free up to a certain annual maximum.

Company Car (mixed use):  Previously 30% of the maximum annual 15,000km mileage cost was a taxable benefit, to account for estimated personal use. For contracts entered into after 2020, the taxable amount depends on the emission rate of the car, ranging from 25-50%.  The remainder is a non-taxable amount as it’s allocated to business more

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Tim Burgess

Director, Shield GEO Services Ltd