{"id":2359,"date":"2021-06-28T00:00:00","date_gmt":"2021-06-27T22:00:00","guid":{"rendered":"https:\/\/www.hrcapital.it\/observatory\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/"},"modified":"2021-06-28T00:00:00","modified_gmt":"2021-06-27T22:00:00","slug":"inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections","status":"publish","type":"post","link":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/","title":{"rendered":"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections"},"content":{"rendered":"<p>The Italian Inland Revenue was asked about the reimbursement of expenses paid to \u201c<strong>smart working<\/strong>\u201d employees. In answer to question no. 371 of 24 May 2021, clarifications were provided on the tax treatment of the sums paid by the employer to its employees as a reimbursement of internet connection costs.<\/p>\n<p><strong>The taxpayer\u2019s question<\/strong><\/p>\n<p>In formulating the question, the employer informed the Inland Revenue of an intention to implement a smart working programme involving the reimbursement of the <strong>cost of connection <\/strong>\u00a0<strong>using an \u201cinternet key\u201d or a subscription to the domestic internet service.<\/strong><\/p>\n<p>The employer asked for clarifications on the relevance of the reimbursement of expenses for defining the:<\/p>\n<ul>\n<li><strong>employment income<\/strong> (IRPEF),<\/li>\n<li><strong>deductibility for business income purposes <\/strong>(IRES).<\/li>\n<\/ul>\n<p>According to the taxpayer\u2019s interpretation, based on resolution no. 357\/E of 7 December 2007 on the reimbursement of expenses under \u201cteleworking.\u201d The reimbursement of the internet connection cost paid to the employee, being instrumental to working performance, does not constitute employment income and is fully deductible from business income.<\/p>\n<p><strong>The Inland Revenue\u2019s opinion<\/strong><\/p>\n<p>In formulating its opinion on the first question, concerning the IRPEF profiles, the Inland Revenue stated that employment income is governed by the <strong>all-inclusiveness principle<\/strong>, under Article 51, paragraph 1, of the Consolidated Income Tax Act, approved by Presidential Decree no.\u00a0 917\/1986 (TUIR).<\/p>\n<p>Based on this principle, employment income is considered to be \u201c<em>all of the general sums and valuables, received for any reason during the tax period, including donations, related to employment.\u201d<\/em><\/p>\n<p>Apart from the exceptions provided for in the cases of travels and transfers (referred to in paragraphs 5 et seq. of Article 51), sums paid to the employee as reimbursement of expenses constitute employment income and are subject to taxation and social security.<\/p>\n<p>Without prejudice to the general principles of the tax system outlined above, the Inland Revenue refers to the circular of 23 December 1997, no. 326, according to which certain reimbursements may be excluded from taxation. Reimbursements for expenses other than those incurred to produce income are exempt and are the employer\u2019s responsibility but advanced by the employee for operational streamlining purposes. For example, expenses incurred to purchase capital goods of a nominal value (such as paper for a photocopy machine or printer, batteries for a calculator, etc.).<\/p>\n<p>In the case presented by the taxpayer, the <strong>reimbursement granted by the employer does not relate to the cost attributable to the employer\u2019s exclusive interest. The applicant would reimburse all the expenses incurred by the employee for the activation and subscription fees for the internet connection service<\/strong>, allowing them full and unlimited access to all the functions available and offered by the technology on the market.<\/p>\n<p>The relationship between the internet use and the employer\u2019s interest is doubtful since the data traffic contract is not chosen and entered into by the employer who reimburses the costs, and is external to the negotiated relationship established with the operator selected by the employee.<\/p>\n<p>The Inland Revenue concluded that the <strong>reimbursement of internet costs<\/strong> incurred by the smart working employee, <strong>without objective and documented elements and parameters, cannot be excluded from defining the employment income and, will be fiscally relevant to the employee under Article 51, paragraph 1, of the TUIR.<\/strong><\/p>\n<p>For the IRES profiles, Article 95 of the TUIR provides that <em>\u201cThe expenses for employee services deductible for defining the income include those incurred in cash or in-kind by way of donations in favour of employees, without prejudice to Article 100, paragraph 1.\u201d<\/em><\/p>\n<p>In this case, the reimbursement granted to the employee for the activation and subscription fees for the internet connection service meets an employee need and is linked to smart working, contributing to the payment of remuneration for the employee\u2019s needs.<\/p>\n<p><strong>Reimbursements may be deductible for IRES purposes under Article 95, paragraph 1, of the TUIR<\/strong>, <strong>only to the extent that the activation of the internet connection is an implicit obligation of the agreed service, <\/strong>through the individual agreement under Law 81\/2017, signed between employer and employee,<strong> as they are similar to \u201cExpenses for work services.\u201d<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Italian Inland Revenue was asked about the reimbursement of expenses paid to \u201csmart working\u201d employees. In answer to question no. 371 of 24 May 2021, clarifications were provided on the tax treatment of the sums paid by the employer to its employees as a reimbursement of internet connection costs. The taxpayer\u2019s question In formulating [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26],"tags":[131],"class_list":["post-2359","post","type-post","status-publish","format-standard","hentry","category-observatory","tag-smart-working"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections - HR Capital<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections - HR Capital\" \/>\n<meta property=\"og:description\" content=\"The Italian Inland Revenue was asked about the reimbursement of expenses paid to \u201csmart working\u201d employees. In answer to question no. 371 of 24 May 2021, clarifications were provided on the tax treatment of the sums paid by the employer to its employees as a reimbursement of internet connection costs. The taxpayer\u2019s question In formulating [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/\" \/>\n<meta property=\"og:site_name\" content=\"HR Capital\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-27T22:00:00+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#\\\/schema\\\/person\\\/e1cf5408d480ec27d7f119fa9801b4c7\"},\"headline\":\"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections\",\"datePublished\":\"2021-06-27T22:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/\"},\"wordCount\":670,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#organization\"},\"keywords\":[\"smart working\"],\"articleSection\":[\"Observatory\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/\",\"url\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/\",\"name\":\"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections - HR Capital\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#website\"},\"datePublished\":\"2021-06-27T22:00:00+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/osservatorio\\\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#website\",\"url\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/\",\"name\":\"HR Capital\",\"description\":\"HR Advisor &amp; Payroll\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#organization\",\"name\":\"HR Capital\",\"url\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.hrcapital.it\\\/wp-content\\\/uploads\\\/2022\\\/03\\\/nuovologohr.png\",\"contentUrl\":\"https:\\\/\\\/www.hrcapital.it\\\/wp-content\\\/uploads\\\/2022\\\/03\\\/nuovologohr.png\",\"width\":270,\"height\":65,\"caption\":\"HR Capital\"},\"image\":{\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.linkedin.com\\\/company\\\/hr-capital-s-r-l-\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.hrcapital.it\\\/en\\\/#\\\/schema\\\/person\\\/e1cf5408d480ec27d7f119fa9801b4c7\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/abc81b0c708aea145c773c368ae5bc3f1f3fd0d40a61429cb96d09523d41ab66?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/abc81b0c708aea145c773c368ae5bc3f1f3fd0d40a61429cb96d09523d41ab66?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/abc81b0c708aea145c773c368ae5bc3f1f3fd0d40a61429cb96d09523d41ab66?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"https:\\\/\\\/www.hrcapital.it\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections - HR Capital","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/","og_locale":"en_US","og_type":"article","og_title":"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections - HR Capital","og_description":"The Italian Inland Revenue was asked about the reimbursement of expenses paid to \u201csmart working\u201d employees. In answer to question no. 371 of 24 May 2021, clarifications were provided on the tax treatment of the sums paid by the employer to its employees as a reimbursement of internet connection costs. The taxpayer\u2019s question In formulating [&hellip;]","og_url":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/","og_site_name":"HR Capital","article_published_time":"2021-06-27T22:00:00+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/#article","isPartOf":{"@id":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/"},"author":{"name":"admin","@id":"https:\/\/www.hrcapital.it\/en\/#\/schema\/person\/e1cf5408d480ec27d7f119fa9801b4c7"},"headline":"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections","datePublished":"2021-06-27T22:00:00+00:00","mainEntityOfPage":{"@id":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/"},"wordCount":670,"commentCount":0,"publisher":{"@id":"https:\/\/www.hrcapital.it\/en\/#organization"},"keywords":["smart working"],"articleSection":["Observatory"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/","url":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/","name":"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections - HR Capital","isPartOf":{"@id":"https:\/\/www.hrcapital.it\/en\/#website"},"datePublished":"2021-06-27T22:00:00+00:00","breadcrumb":{"@id":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.hrcapital.it\/en\/osservatorio\/inland-revenue-clarifications-on-the-tax-treatment-of-reimbursements-to-smart-workers-for-internet-connections\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.hrcapital.it\/en\/"},{"@type":"ListItem","position":2,"name":"Inland Revenue: clarifications on the tax treatment of reimbursements to smart workers for internet connections"}]},{"@type":"WebSite","@id":"https:\/\/www.hrcapital.it\/en\/#website","url":"https:\/\/www.hrcapital.it\/en\/","name":"HR Capital","description":"HR Advisor &amp; Payroll","publisher":{"@id":"https:\/\/www.hrcapital.it\/en\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.hrcapital.it\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.hrcapital.it\/en\/#organization","name":"HR Capital","url":"https:\/\/www.hrcapital.it\/en\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.hrcapital.it\/en\/#\/schema\/logo\/image\/","url":"https:\/\/www.hrcapital.it\/wp-content\/uploads\/2022\/03\/nuovologohr.png","contentUrl":"https:\/\/www.hrcapital.it\/wp-content\/uploads\/2022\/03\/nuovologohr.png","width":270,"height":65,"caption":"HR Capital"},"image":{"@id":"https:\/\/www.hrcapital.it\/en\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.linkedin.com\/company\/hr-capital-s-r-l-"]},{"@type":"Person","@id":"https:\/\/www.hrcapital.it\/en\/#\/schema\/person\/e1cf5408d480ec27d7f119fa9801b4c7","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/abc81b0c708aea145c773c368ae5bc3f1f3fd0d40a61429cb96d09523d41ab66?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/abc81b0c708aea145c773c368ae5bc3f1f3fd0d40a61429cb96d09523d41ab66?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/abc81b0c708aea145c773c368ae5bc3f1f3fd0d40a61429cb96d09523d41ab66?s=96&d=mm&r=g","caption":"admin"},"sameAs":["https:\/\/www.hrcapital.it"]}]}},"_links":{"self":[{"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/posts\/2359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/comments?post=2359"}],"version-history":[{"count":0,"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/posts\/2359\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/media?parent=2359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/categories?post=2359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hrcapital.it\/en\/wp-json\/wp\/v2\/tags?post=2359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}