Corrective decree of 7 August 2026 and its effects on the mixed use of company cars

Corrective decree of 7 August 2026 and its effects on the mixed use of company cars

On 11 August 2026 Legislative Decree No. 148 of 7 August 2026 was published in Official Gazette No. 185, in force since 12 August 2026, once again introducing a series of corrections to the ongoing tax reform. We will inform you about these changes in a separate newsletter. Beforehand, however, we would like to draw your attention to the far-reaching amendments to the calculation of the benefit in kind for the mixed use of company vehicles, because these apply retroactively from 1 January 2026, may require prompt decisions and will certainly give rise to discussions with the employees concerned. The new rules are contained in Art. 2 of Legislative Decree No. 148/2026; Art. 53 para. 6 letter a) of the new Consolidated Income Tax Act was amended with identical wording. On the one hand the decree standardises the calculation of the benefit in kind, which is in principle very welcome; on the other hand, however, it introduces two significant surcharges on the benefit-in-kind value of these vehicles.

At the beginning of the year we already communicated the ACI tables applicable for 2026, as published in the Official Gazette on 23 December 2025, which are to be used for calculating the benefit in kind for 2026. As you know, they can be accessed at the following address: aci.gov.it/servizio/fringe-benefit/. For further details please refer to our newsletter No. 6/2026.

I – Standardisation of the calculation methods:

For the calculation of the benefit in kind, or of the amount to be invoiced for the proportionate private use of company cars, we set out six different methods in January, depending on the date of first registration of the vehicles on the one hand and on the actual assignment of those vehicles to the employees on the other. Here there is a simplification with retroactive effect from 1 January 2026, and only three methods remain, whereby in particular the reference to the market value of private use is finally abolished:

1. As a general rule one calculation method applies, depending on the type of drive of the vehicles: fully electric vehicles, plug-in hybrid vehicles and all other vehicles;

2. As a first transitional rule, a calculation method based on pollutant emissions applies, which continues to apply to all vehicles assigned to an employee for mixed use from 1 July 2020 up to 31 December 2024, as well as to vehicles ordered by 31 December 2024 and assigned to an employee for mixed use during 2025;

3. A second transitional rule applies to vehicles that were already assigned to an employee for mixed use before 1 July 2020 under a corresponding agreement. Here the original flat-rate rule remains in force, according to which 4,500 km per year must generally be taken as private use at the rate for 15,000 km.

Important: For the first transitional rule 1.7.2020–31.12.2024 the legislator has expressly provided that a change of employee is harmless. For the old rule under Art. 1 para. 633 of Law 160/2019 there is no corresponding new continuation provision. It follows that vehicles under the 1st transitional rule remain in that class even if they are assigned to other employees. In our understanding, vehicles from before 1 July 2020 remain under the old rule only for as long as the assignment relationship existing at that time continues. If the vehicle is assigned to another employee under a new agreement, the basic rule applicable at the time of the new assignment must in principle be applied.

Here is an overview of the methods:

II – New surcharges on the benefit-in-kind value:

The decree of 7 August 2026 also provides for two new surcharges on the benefit-in-kind value determined in this way, depending on any special equipment and on the age of the vehicles:

1. Surcharge for special equipment: If the vehicle contains equipment, conversions or accessories that are not separately taken into account in the relevant ACI tables and that the employee has not purchased directly himself, the benefit in kind increases by a flat 5%; amounts borne by the employee – including amounts for accessories and equipment – remain deductible; here the legislator follows a ruling of the Revenue Agency (reply No. 233 of 9 September 2025). This change will certainly give rise to much discussion and dispute, because what constitutes special equipment also depends substantially on the sales policy of the car dealerships. Whether an optional assistance package or a tow bar counts as valued standard equipment or as special equipment will have to be clarified on a case-by-case basis.

2. Surcharge based on the age of the vehicle: The next surcharge, by contrast, is hardly comprehensible: after 31 December of the fifth year following the year of first registration, the benefit in kind according to the ACI rate must be increased by 50% (you read correctly: increased and not reduced!). What matters is solely the objective date of first registration, not the date of assignment to the employee. Since 1 January 2026 this initially affects, among the vehicles falling under the new basic rule or the transitional rule, those first registered by 31 December 2020. By way of illustration:

First registration 15.9.2020 → fifth subsequent year = 2025 → surcharge from 1.1.2026.
First registration 15.9.2021 → fifth subsequent year = 2026 → surcharge from 1.1.2027.

Allow us a personal assessment: the employee certainly does not receive a higher remuneration in kind merely because an older car is made available to him. This innovation is justified, however, by the wish to create an incentive to renew the company fleet and thereby stimulate economic growth (and sustainability and environmental protection …). And who could possibly object to that?

The 50% age surcharge applies irrespective of the type of drive of the vehicle and therefore also to fully electric vehicles and plug-in hybrid vehicles.

Cost contributions borne by the employee are to be deducted in all cases. Contrary to the wording in the explanatory notes to the new rule, the wording of the final provision in Art. 2 suggests that the cost contribution borne by the employee is already to be taken into account when determining the starting value, and that only then is the 50% or 5% surcharge to be calculated. A calculation deviating from this in the explanatory report should be clarified by an administrative instruction.

Important: the treatment of special equipment applied by employers up to 31 December 2025 remains untouched; no refund of higher taxes already paid will be made. In plain terms: no corrections are necessary or possible for 2025.

III – Effects on the calculation of the benefit in kind from 1 January 2026:

Basic rule for calculating the benefit in kind for new vehicles

The benefit in kind is generally determined for all vehicles as follows, always with reference to the ACI rate for 15,000 km/year (Art. 51 para. 4 letter a) TUIR):

• For plug-in hybrid vehicles, 20% of 15,000 km (equal to 3,000 km/year) counts as private use.
• For electric vehicles, on the other hand, 10% of 15,000 km (i.e. 1,500 km/year) counts as private use.
• And for all other vehicles a flat 50% (equal to 7,500 km/year) is taken as private use.

The flat-rate private-use kilometres per year determined in this way are then multiplied by the specific ACI cost-per-kilometre rate of the vehicle concerned (cost per km at an annual mileage of 15,000 km), and the taxable benefit for private use results after deduction of any cost contribution by the employee.

As already noted in January, the rule means that private use is barely noticeable for electric vehicles, whereas it can lead to considerable additional burdens for combustion-engine vehicles and for hybrid vehicles that cannot be charged externally.

As shown above, the benefit in kind determined in this way increases by a flat 5% if the vehicle contains special equipment that is not separately valued. For newly first-registered vehicles the 50% age surcharge naturally only has to be taken into account after expiry of the fifth year following the year of first registration.

First transitional rule for older vehicles

For the following vehicles the first transitional rule remains in place, under which private use is calculated depending on pollutant emissions:

1. for company vehicles which, from 1 July 2020 up to 31 December 2024, have been assigned to an employee for mixed use, and

2. for company vehicles which the employer demonstrably ordered by 31 December 2024 and assigned to an employee for mixed use during 2025 (please note: the deadline was previously 30 June 2025).

Private use for these vehicles continues to be calculated as follows, always within the meaning of Art. 1 para. 48-bis of Law 207/2024 in conjunction with Art. 1 para. 632 of Law 160/2019, namely with reference to the ACI rate for 15,000 km:

• up to 60 g/km: 25% of 15,000 km (equal to 3,750 km/year),
• above 60 g/km and up to 160 g/km: 30% of 15,000 km (equal to 4,500 km/year),
• above 160 g/km and up to 190 g/km: 50% of 15,000 km (equal to 7,500 km/year),
• above 190 g/km: 60% of 15,000 km (equal to 9,000 km/year).

The flat-rate private-use kilometres per year determined in this way are then multiplied by the specific ACI cost-per-kilometre rate of the vehicle concerned (cost per km at an annual mileage of 15,000 km), and the taxable benefit for private use results after deduction of any cost contribution by the employee.

After 31 December of the fifth year following the year of first registration, the above calculation based on pollutant emissions continues to apply, but the value determined in this way is increased by 50%. The effects are considerable:

• up to 60 g/km: 37.5% of 15,000 km (equal to 5,625 km/year),
• above 60 g/km and up to 160 g/km: 45% of 15,000 km (equal to 6,750 km/year),
• above 160 g/km and up to 190 g/km: 75% of 15,000 km (equal to 11,250 km/year),
• above 190 g/km: 90% of 15,000 km (equal to 13,500 km/year).

As shown above, this increase initially affects vehicles first registered by 31.12.2020.

For special equipment, the benefit-in-kind value determined in this way is increased by 5%.

Second transitional rule for older vehicles

Since the special rule of the time in Art. 1 para. 633 of Law 160/2019 has not been amended, in our understanding it must be assumed that, for vehicles assigned to an employee for mixed use on the basis of a contract concluded by 30.6.2020, the benefit-in-kind value continues to be determined at a flat rate for 4,500 km, calculated on the basis of the 15,000 km mileage of the vehicle concerned, irrespective of pollutant emissions and type of drive. In our understanding, neither the new 50% age surcharge nor the 5% surcharge for special equipment applies; official clarification, however, remains to be seen. And as shown above, it must be assumed that this second transitional rule continues to apply only if the vehicle continues to be used by an employee with whom a corresponding agreement was concluded before 1 July 2020.

Abolition of the market value

As a result of the reform, the rules under which the private-use share had to be determined by reference to the market value in special cases also cease to apply from 1 January 2026. Accordingly, the new rule excludes the application of the market value both for vehicles under the transitional rule from 1 July 2020 to 31 December 2024 and for vehicles ordered by 31 December 2024 and assigned during 2025. For these vehicles the respective flat-rate calculation method based on the ACI rates therefore remains decisive. The abolition of the reference to the market value is to be welcomed insofar as the tax authorities have to this day been unable to establish a reliable criterion for determining the market value.

Conclusion

• For vehicles which, on the basis of a contract concluded by 30 June 2020, continue to fall under the rule applicable at that time and for which private use could still be determined at 4,500 km/year using the ACI rate for 15,000 km, no changes at all should arise, always provided that the user has remained the same over the years. On our understanding of the provision, the new surcharges of 5% and 50% also do not apply to these vehicles; official clarification, however, remains to be seen.
• For vehicles which, from 1 July 2020 up to 31 December 2024, were assigned to an employee for mixed use, the previous calculations remain in place; however, insofar as the vehicle was registered before 1 January 2021 or contains special equipment, considerable additional burdens are likely to arise.
• The change may be advantageous for vehicles ordered before 31 December 2024: until now, assignment to the employee by 30 June 2025 was required; now assignment by 31 December 2025 is sufficient to still fall under the emissions rule.
• Finally, it is advantageous that, for vehicles under the first transitional rule, a change of employee has no effect on the method of calculating the benefit in kind.

Recommendations

As shown at the outset, the new rules apply retroactively from 1 January 2026. We recommend recording the company fleet before the next payroll runs and noting five details for each vehicle:

• type of drive or CO₂ emissions of the vehicle,
• date of order,
• date of assignment to the employee,
• date of first registration, and
• any special equipment.

Only on the basis of these five details can the applicable calculation method and any surcharges be determined. Wherever private use is settled as a benefit in kind via the payslip, we recommend that you contact your payroll office immediately in order to coordinate the retroactive corrections. Where private use is invoiced to the employee, it will be necessary to inform the employee of the potentially considerable additional costs. The retroactive revaluation may affect not only wage tax but also social security contributions and the corresponding declarations. It may be advisable to wait before issuing increased invoices; who knows what else will happen on this subject once all those concerned are back from the August holidays.

Below is an overview of the new legal situation: