Company car and relevant optional features

A company car is the ultimate fringe benefit and remains one of the most appreciated assets used by companies within remuneration policies, thanks in part to its popularity among employees and the convenience associated with the relevant taxation regime.

Given the need to manage a company's car fleet, car brands and models to be assigned to employees are usually identified following corporate policies, depending on the categories to which employees belong.

Moreover, it is not unusual that, when choosing a vehicle, employees might decide to customise it by adding optional extras that they are willing to pay for, convinced that the relevant withholding will reduce the value of the taxable benefit in their payslip. But is this really the case?

Actually, no: additional optional features do not impact the value of the taxable benefit.

A clarification on the matter has recently been provided by the Revenue Office, with its response to ruling no. 233 dated 9 September 2025.

In justifying their opinion, the tax authorities refer to art. 51 of the Italian Consolidated Income Tax Law (TUIR), according to which everything that employees receive in relation to their employment relationship contributes to their taxable income. Para. 4 of the abovementioned article stipulates that for vehicles granted to employees for business and personal use, a calculation based on a lump sum should be adopted, identified according to the ACI tables, which estimate the cost per kilometre for a conventional distance travelled of 15,000 km per year. The tables used refer to the basic model of each vehicle and do not include the cost of optional features. It is therefore not correct to subtract the cost of possible extra accessories not included in the tables according to which the benefit is calculated from the value of the benefit thus estimated.

According to the established position of the Revenue Office, the only amounts that can be withheld are those representing a remuneration for the personal use of the vehicle (see Circular 326/E of 1997). The charge at stake must be directly linked to the possibility of using the asset and not to the customisation of the asset itself. By way of example, let’s consider the case of an employee choosing a car model not covered by the company policy for their category, offering to contribute to the additional cost incurred by the company through a corresponding withholding. Is such a situation, the taxable benefit for the employee is reduced by the amounts charged back by the employer, who will collect the corresponding amount after issuing an invoice to be paid by the employee by the end of the tax period.

Having clarified that the payment for optional car features has no effect on the calculation of taxable income, which is the correct way to manage the charge to the employee? The amount relating to optional features must be treated as a mere withholding, with no impact on tax or social security contributions. The company must therefore charge this cost to the employee through a withholding on their net salary.

For the sake of completeness, it should be noted that the letter assigning the car should specify the cost of installing any optional features and establish the amount that will be charged back to the employee, either in part or in full, as well as the value of any sums withheld from the employee in relation to the assignment of the company car.