Tax regime of deferred benefits in kind accrued during periods subject to notional remuneration.

With Ruling No. 37/2026, the Italian Revenue Agency addressed the tax treatment of benefits in kind, including those paid on a deferred basis, accrued during tax periods in which employment income was determined under the notional remuneration regime provided for by Article 51, paragraph 8-bis, of the Italian Income Tax Code (TUIR).

The clarifications provided by the Revenue Agency stem from a specific case involving a worker who is tax resident in Italy and who, between 2016 and 2022, carried out work activities exclusively abroad for a foreign company. During those years, the worker accrued the right to receive benefits in kind in the form of stock options and performance shares, the taxable events of which occurred, respectively, in 2024 and 2025.

For the years spent outside Italy, employment income had been determined by applying the notional remuneration regime, which—where the conditions set out by law are met—allows taxable income to be calculated not on the basis of the actual remuneration received, but on a lump-sum basis established annually by ministerial decree.

In this context, an assessment was made as to whether the fringe benefits arising from the exercise of stock options and the free allocation of shares should be subject to additional taxation, or whether they were already included in the lump-sum taxable base.

Referring to its established practice, the Italian Revenue Agency confirmed that, for tax periods covered by the notional regime, this method fully replaces the analytical determination of employment income, also encompassing any additional income components attributable to the same periods, including benefits in kind.

Consequently, the fringe benefits deriving from stock options and performance shares, attributable to tax periods in which employment income was determined under the notional remuneration regime, are not subject to further taxation, as they are already included in the lump-sum taxable base applied in those periods.