Corporate welfare, the importance of renewal

Moreover, recently, through transitional provisions contained primarily in the Budget Act, “temporary” exceptions were provided for to the quantitative and qualitative limitations on certain types of benefits: fringe benefits.

The last exemption in chronological order is contained in the 2024 Budget Act. In particular, this regulatory provision provides, temporarily and only for the current financial year, for a new exemption from the threshold of €258.23 provided for in Article 51, paragraph 3 of the TUIR concerning remuneration in kind (fringe benefits) paid by employers to their employees. In 2024, this threshold will be increased to €2,000 for employees with dependent children and to €1,000 for all other employees.

As in the past series of provisions (the Second Aid Decree, the Fourth Aid Decree, the Labor Decree, the 2023 Budget Law) and the 2024 regulations, these funds can be used to pay (or reimburse) expenses such as water and electricity bills due to relevant provisions. However, the same amount was also used for the first time to cover the costs for workers to pay rent or mortgage interest associated with buying their first home.

The frequency of benefit interventions, especially those of a transient nature, makes ongoing training essential for those responsible for administering benefit programs within a company or on behalf of the company in various capacities. In some cases, benefit payments (such as contributions to supplementary social security or supplementary health care, as well as in-kind payments or fuel bonuses) must be correctly included in the Single Certification (CU) that the employer issues to its employees.

In the CU, company benefit items are reported in a dedicated section, separate from the employee’s income: for example, in the 2024 form, fringe benefits are entered in the “Other data” section in field 474 or 475. This allows employees to have a transparent understanding of the benefits received and their non-monetary nature. In fact, if in compliance with current regulations, these benefits do not contribute (or partially contribute) to taxable income and are therefore tax-free.