Reimbursement of travel expenses to employees – since 1 January 2025 (!) mileage reimbursements for business trips within the municipality of employment are also tax-free
Bolzano, 23.12.2025
Just before Christmas, some genuinely good news: with Circular No. 15/E of 22 December 2025, the Italian Revenue Agency published important clarifications on the tax treatment of reimbursements of travel expenses incurred on external assignments and on the documentation requirements and payment traceability for such expenses. The changes result in particular from the IRPEF/IRES reform (Law Decree No. 192/2024) and from the 2025 Budget Law. The interpretations, however, go far beyond this. Below we summarise the most important points for employers and employees.
1. Definition of a business trip
A business trip is deemed to be exclusively a temporary relocation of the place of work with respect to the usual place of work. A permanent transfer does not constitute a business trip and is therefore subject to a different tax treatment.
2. Business trips within the municipality
The revolution concerns this point: in the view of the Italian Revenue Agency, the legal position (Art. 51 para. 5 TUIR) is, since 1 January 2025, to be interpreted in such a way that reimbursements of travel and transport costs within the municipality of employment are also tax-free, provided that they are properly evidenced and documented. Until now, the Italian Revenue Agency had always strictly maintained the interpretation that, within the municipality, only costs supported by documents issued by a transport operator (e.g. a taxi receipt) were tax-free.
It follows that mileage allowances for the use of the employee's private vehicle may also be settled in accordance with the general criteria for journeys within the municipality of employment.
This clarification represents a considerable simplification compared with previous practice. It should be added that, of course, for journeys within the municipality as well, a business assignment and a clear justification in the expense statement must be available.
3. Tolls and parking fees
Likewise not taxable are reimbursements of toll charges, provided they are properly documented, and reimbursements of parking costs, where the vehicle and the parking transaction are clearly identifiable from the supporting documents. Earlier restrictive interpretations by the tax authorities, according to which these expenses would not be deductible for journeys within the municipality of employment, are to be regarded as superseded in this respect. Naturally, these expenses must always be connected with a business trip.
4. Traceability of payments
The restrictions introduced at the beginning of the year regarding proof of payment for expenses for meals, accommodation and taxi journeys are confirmed. This requirement also applies to business trips within the municipality. Conversely, it is confirmed that the restrictions do not apply abroad.
5. Application over time
The new rules apply to all reimbursements paid out from 1 January 2025, even where the reimbursed costs relate to business trips of the previous year
(subject to the extended cash principle).
Addendum: unfortunately, the circular contains no clarification on those cases in which, under the current interpretation, mileage reimbursements may not be based on the ACI rate but must instead be based on the „normal value“.
Please do not hesitate to contact us if you have any queries.
Yours faithfully,
Dott. Comm. Josef Vieider
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