Italy modifies company car taxation via Omnibus Decree

The Omnibus Corrective Decree (Legislative Decree no. 148 of August 7, 2026) introduces new rules for the taxation of company cars provided to employees for mixed use, effective from the 2026 tax period. The regulation modifies how the taxable fringe benefit is calculated, aiming to encourage companies to renew their fleets with less polluting vehicles.

Under the new system, the taxable base is determined using ACI (Automobile Club d'Italia) kilometer costs multiplied by a conventional 15,000 kilometers. The applicable percentage depends on the vehicle's fuel type: 50% for petrol, diesel, LPG, methane, and full hybrids; 20% for plug-in hybrids; and 10% for electric vehicles.

A significant change involves vehicle age: cars registered for more than five years will face a 50% surcharge on the taxable value. Additionally, a flat 5% increase will be applied to the fringe benefit value for accessories and optional equipment not included in standard ACI tables. The decree also includes transitional rules for vehicles ordered before the end of 2024 and assigned during 2025 to mitigate taxation risks.