Company cars, crackdown on thermals: tax increases will hit the salaries of those who use them

ROME – With the final approval of the law converting the Milleproroghe decree and the rejection of the amendments that provided for the postponement of the entry into force of the law that changes the taxation criteria for cars in fringe benefits, not only does the company car risk turning from a benefit into an additional salary for many, but the company fleet market, which represents 42% of total registrations, could suffer heavy contractions, with a consequent cut for the treasury of 125 million euros.

The reform of the taxation on fringe benefits, contained in the Milleproroghe conversion law, introduces new calculation coefficients for the taxable base for mixed-use company cars from 1 January 2025. Coefficients that will no longer be based on the vehicle's CO2 emissions but on the type of fuel, with the aim of encouraging the inclusion of electric and plug-in hybrid vehicles in fleets, discouraging the use of those with a combustion engine. Based on this new formulation, electric cars are valued with a coefficient of 10% and plug-in hybrids of 20%, with a benefit of between 5 and 10% compared to the previous legislation, which provided for a coefficient of 25% for the emission range between 0 and 60 g/km of CO2 emitted. All other types of fuel, regardless of emissions, will instead see a coefficient of 50% applied. This means that not only diesel and petrol vehicles will be penalised, but also full hybrids, mild hybrids, bifuels and LPG, i.e. all those with non-rechargeable internal combustion engines, which correspond to 85% of company cars.

The new rules do not even distinguish between a small car and a luxury car or a supercar , which was not the case until 2024, when the tax coefficient was 30% for the 61-160 g/km emissions range, 50% for cars between 161 and 190 g/km, up to 60% for vehicles with over 190 g/km of CO2 emissions. In short, applying the rules in force since 2025, we could arrive at the paradox that a Fiat Panda in the basic version, therefore with a tax coefficient of 50%, has a total taxable fringe benefit value higher than that of a Porsche Taycan, a luxury electric sports car with a list price of over 100 thousand euros, which however has a tax coefficient of 10%.

In general, the new rule, with the increase in the coefficient from 30 to 50%, hits hard especially cars with internal combustion engines in the emission range between 61 and 160 g/km of CO2, which constitute at least 75% of registrations of VAT subjects. And this, due to the increase in taxable income and therefore of Irpef and social security contributions, will have an immediate effect both on workers' salaries, which will be lower, and on the social security contributions of companies which, due to the higher taxation on fringe benefits, will suffer an increase. This could lead many companies, especially the smaller ones, to reduce the number of vehicles granted to employees or, in some cases, to propose to workers to contribute financially to the cost of the vehicle, transforming what was a benefit into an additional burden.

Aniasa , the association representing long-term rental and mobility services companies, estimates that with the application of the new rule there will be an annual increase in the taxable value of the car benefit of an average of 1,600 euros (+67%). The increase in taxation will affect approximately 1 million Italians who use a company car and the most penalized will be middle-class employees who, as a rule, are the main users of diesel or petrol cars. This will lead to a reduction of at least 30% in registrations of cars for long-term rental use in 2025 (approximately 60,000 units) and 20% in purchases by companies (15,000 units), with lower revenues for the Treasury and Local Authorities estimated at 125 million euros.

But that's not all. During the legislative process, the so-called safeguard clause was effectively blocked, with which the government had decided to exclude from the 2025 restrictions vehicles ordered in 2024 but delivered to employees during this year. And even if the intention would seem to be to re-propose it in a new emergency measure as soon as possible, according to Aniasa the lack of a specific safeguard clause for the past also generates another risk: that the previous regulation of fringe benefits, replaced by the one that came into force on January 1st of this year, is no longer applicable to cars assigned and registered up to December 31st 2024. In essence, cars delivered up to December 31st 2024 could no longer benefit in 2025 from the flat-rate determination of the value of the fringe benefit based on the Aci tables, but would have to return to the analytical regime of 1997. Which, in many cases, would lead to a significant increase in taxable income and, therefore, taxation for these subjects, even though they are the same vehicles already granted for use by the company.

To discuss this and the heavy economic and market burdens that the increase in the tax rate to 50% for all non-rechargeable fringe benefit vehicles risks generating, Anfia, Aniasa and Unrae have requested an urgent meeting with the government in an open letter sent in recent days.