The 2025 Budget Law introduced important changes to the Consolidated Income Tax Law (TUIR) regarding payment traceability (Art. 1, paragraphs 81-83, Law No. 207 dated 30 December 2024). Starting from 1 January 2025, expenses incurred for food, accommodation and transport during business trips by employees or collaborators will only be deductible if paid for using traceable payment methods.

Which expenses are involved?

The new provisions concern expenses incurred for:

– Food and accommodation during business trips;

– Analytical reimbursements for travel and transport expenses, including those incurred by taxi or private hire vehicle with driver;

– Entertainment expenses incurred by companies for promotional and networking activities.

These expenses will only be deductible if payment is made using traceable means such as credit cards, debit cards or bank transfers (Art. 23, Legislative Decree 241/1997).

What are the consequences for companies and employees?

Failure to use traceable payment methods will result in tax penalties for companies, self-employed workers and employees. Let’s look at the details:

1. Non-deductibility of expenses for businesses and self-employed workers

Expenses for food, accommodation, non-scheduled transport and entertainment will not be deductible from taxable income for IRES and IRAP purposes, irrespective of the nature of the expense or the context in which it was incurred.

2. Taxation of reimbursements for employees

Expenses incurred by employees during business trips, if reimbursed by the employer without adequate traceability, will be considered taxable income and therefore taxed as income from employment.

Critical issues and compliance requirements for companies

These new provisions require companies to adapt quickly to avoid tax penalties and problems in managing reimbursements. The main critical issues include:

– Lack of detailed guidelines on certain expense items;

– Need to implement dedicated company policies for travel management;

– Adoption of more rigorous internal procedures for verifying and storing traceable payment receipts.

The Tax Authorities should provide further clarification to deal with ambiguous situations or those not covered by current legislation. In the meantime, companies are advised to update their procedures and adequately train the staff responsible for administrative management.

The traceability of payments is not only a tax obligation but also an essential condition for ensuring the correct deduction of expenses and avoiding unexpected tax burdens, both for the company and its employees.