Italian Revenue Agency: Operational Guidelines on the Traceability of Business Travel Expenses

With Circular No. 15/E of 22 December 2025, the Italian Revenue Agency, with the aim of ensuring uniform application, provided its local offices with operational instructions regarding the changes introduced by Legislative Decree No. 192 of 13 December 2024 (“IRPEF delegated decree”) and by Law No. 207 of 30 December 2024 (“2025 Budget Law”) concerning business travel and mission expenses.

The circular first recalls the general rules on business travel set out in the Consolidated Income Tax Act (“TUIR”), then focuses on the simplifications introduced by the IRPEF delegated decree for travel carried out within the municipality where the workplace is located, and on the new requirement of expense traceability for tax exemption and deductibility purposes, introduced by the 2025 Budget Law.

Business Travel Rules Under the Italian Tax Act
Article 51, paragraph 5, of TUIR regulates the tax treatment of amounts paid to employees for business travel or missions, intended as temporary movements away from the employee’s usual workplace. The tax regime varies depending on whether the activity is carried out within or outside the municipality where the employee’s workplace is located.

For travel outside the municipality, the legislation provides three alternative reimbursement systems—flat-rate, mixed, and analytical—each with specific rules on income exemption for allowances and reimbursements relating to meals, accommodation, travel, and transportation.

Flat-rate system
This system allows a daily allowance—within predefined statutory limits—to be exempt from income tax, excluding travel and transportation expenses. Where a travel allowance is paid, analytical reimbursements of travel and transportation expenses (including mileage reimbursements) are also exempt, provided they are supported by appropriate documentation.

Travel Outside the Municipality

Mixed system
Unlike the flat-rate method, this system combines allowances with analytical reimbursements for meals and/or lodging, reducing the daily allowance exemption limit by two-thirds based on the reimbursed analytical expenses. Reimbursements for travel and transportation expenses remain exempt if properly documented, while any other additional expenses (i.e., other than meals, lodging, travel, and transportation) are fully taxable.

Analytical system
This regime allows full exclusion from income of reimbursements for meals, lodging, travel, and transportation—including mileage—provided they are duly documented. “Accessory expenses” (e.g., laundry, telephone, tips) may also be non-taxable even if not documented, as long as they are itemized by the employee. These expenses are exempt up to €15.49 per day for travel within Italy and €25.82 per day for foreign travel; any amount exceeding these limits, even if documented, is taxable. The Revenue Agency clarifies that the employer must choose a single reimbursement system for the entire period of the business trip. It is not permissible to apply different systems for different days of the same trip.

Travel Within the Municipality
Until 30 December 2024, the legislation was particularly strict: all allowances and reimbursements were taxable, except for transportation expenses proven by “documents issued by the carrier”. As a result, reimbursements for private car use—including mileage allowances—were always taxable.

The IRPEF delegated decree simplified this rule by replacing the reference to “documents issued by the carrier” with the broader wording “proven and documented travel and transportation expenses”.
Thus, from 1 January 2025, reimbursements of travel and transportation expenses for travel within the municipality do not contribute to taxable income if suitably proven and documented, regardless of the document issuer. This means that mileage reimbursements based on ACI tables, tolls, and parking fees—when properly documented—are also exempt.

The Traceability Requirement
Article 1, paragraph 81, of the 2025 Budget Law amends the TUIR by introducing, as of 1 January 2025, a new requirement for tax and social security exemption: business travel reimbursements relating to meals, lodging, travel, and transportation provided by non‑scheduled public services (such as taxis and NCC—chauffeur services) must be paid using traceable methods.

To qualify for exemption, employees must pay these expenses using traceable instruments, such as bank transfers, debit or credit cards, PagoPA, or other methods listed in Article 23 of Legislative Decree 241/1997, which allow identification of both payer and payee.

Traceability applies to:

• Travel outside the municipality, under all reimbursement systems:
  • Flat-rate: only travel/transport expenses via taxi or NCC;
  • Mixed or analytical: meals, lodging, travel/transport expenses via taxi or NCC;
• Travel within the municipality, for exempt travel/transport expenses via taxi or NCC.

Exclusions From the Traceability Requirement
Traceability is not required for the following reimbursements, regardless of destination:

• Scheduled public transportation (train, bus, airplane, ship);
• Mileage reimbursement (indennità chilometrica);
• Accessory expenses within the daily limits (€15.49 in Italy, €25.82 abroad).

These remain non-taxable even if paid in cash.

Documentation Allowed as Proof of Traceable Payment
The circular lists acceptable proof of traceability, including:

• Credit/debit card payment receipts;
• Copies of postal payment slips or MAV;
• PagoPA payment confirmations;
• Bank statements (with non-relevant data obscured).

Payments made through electronic money institutions (e.g., apps linked to IBAN accounts) are also considered traceable if supported by appropriate documentation.

Domestic vs Foreign Travel: Clarification Introduced During 2025
The circular also recalls Decree-Law No. 84 of 17 June 2025, converted by Law No. 108 of 30 July 2025, which limited the traceability requirement to domestic travel only. As a result, foreign business trips remain exempt even if paid in cash, a change needed to address practical difficulties in countries where electronic payment systems are not widespread.