Gifts to employees: the Italian Revenue Agency intervenes on tax liability

The Italian Revenue Agency, with its answer to request for ruling no. 89/E of 11 April 2024, returns to the issue of taxation applicable to gifts to employees.

The facts of the case

In the case in question, the company provided its employees with a free drink each day, a bag of coffee per month and was considering the possibility of giving employees promotional items, such as mugs or pins with the company logo, for parties or promotional launches. In the request for ruling, the applicant company clarified that the purpose of the gifts was in line with its corporate marketing strategy: firstly, to promote employees’ product knowledge to ensure better customer service and, secondly, to promote the company’s image on the market.

The Italian Revenue Agency’s decision

The Italian Revenue Agency, while recognising that the gifts in question are connected to the corporate strategy, considered that these gifts – although offered to all employees in the workforce regardless of their sales and work performed – satisfy the individual worker’s specific needs and, therefore, constitute his/her enrichment. The gifts, according to the Agency, cannot therefore be considered as payments made in the employer’s exclusive interest.

In light of this interpretation, if the value of the assets granted in the case in question exceeds the exemption limit for “fringe benefits” – generally equal to EUR 1,000 for 2024, raised to EUR 2,000 for workers with children who are dependent for tax purposes – the same will constitute employment income.

For more information about Fringe Benefits, see the article referred to below:

• 2024 Budget Law: employment initiatives – HR Capital