Meal Vouchers Regulations in Italy: news for 2020
What innovations are introduced with the new 2020 regulation? From 1 January 2020, new rules will apply in Italy regarding the use of meal vouchers. In particular, art. 1 of paragraph 677 of the budget law approved on 23 December 2019 provides two changes compared to the previous legislation. Variation of meal voucher tax exemption...
14 January 2020 by CleverAdvice
What innovations are introduced with the new 2020 regulation?
From 1 January 2020, new rules will apply in Italy regarding the use of meal vouchers. In particular, art. 1 of paragraph 677 of the budget law approved on 23 December 2019 provides two changes compared to the previous legislation.
Variation of meal voucher tax exemption limits
The first is a change in the tax exemption limits which:
- drops to € 4.00 from the previous € 5.29 for paper vouchers, and
- is increased at € 8.00 from the previous € 7.00 for electronic vouchers.
Non-deductibility of VAT on paper meal vouchers
The second change introduced by the legislation is the non-deductibility of VAT applied to the value of meal vouchers for companies that provide paper vouchers to their employees.
As such from January a company that provides € 5 paper vouchers to its employees will have to pay contributions on the amount exceeding the exemption (€ 1) and will not be able to deduct the VAT applied on the total value of the voucher. In addition, the employee’s income will be increased by the amount of the meal voucher exceeding the exemption, and accordingly personal income tax will be calculated on it.
Reduced to evasion and elusion
The legislation is aimed at promoting the use of electronic payments to reduce the improper / illegal use of meal vouchers in order to reduce both evasion and use by individuals other than the owner (tax elusion).
The legislation has the objective of reducing tax evasion / elusion but keeps both paper and electronic vouchers. Therefore, there is a double administrative burden, so companies must to evaluate the possible convenience of using paper vs. electronics vouchers based on a number of factors – not necessarily on economics alone. It also introduces operational uncertainties for merchants who have to decide whether to accept electronic vouchers from one / more / all issuers with a dedicated POS terminals per issuer.
Electronic meal vouchers: a possible alternative?
A regulation aimed at making electronic meal vouchers mandatory – issued at least 12 months in advance – would have left less uncertainties for both companies and merchants and reduced administrative costs. In addition, the taxman would hit his targets faster and with less uncertainty.
This is what happened in Belgium, where only electronic meal vouchers can be issued as of October 2015.
If you want to learn more about Meal Vouchers, contact us or book a call.
The CleverAdvice Team