Introduction
Legislative Decree no. 148 of 7 August 2026 (the so-called Omnibus decree) – the fourth corrective decree of the tax reform, published in Ordinary Supplement no. 30 to Official Gazette no. 185 of 11 August 2026 and in force since 12 August 2026 – has once again intervened, through Article 2, in the rules for determining the fringe benefit for vehicles assigned to employees for mixed use, entirely rewriting the ordinary regime governed by Article 51, paragraph 4, letter a), of the TUIR and amending the transitional regime set out in Article 1, paragraph 48-bis, of the 2025 Budget Law (Law no. 207 of 30 December 2024). Two regimes therefore currently coexist, one ordinary and one transitional, which are discussed in the paragraphs below.
This subject was already addressed in our previous circulars, most recently circular no. 9 of 15 July 2025, in which we commented on the clarifications provided by the Italian Revenue Agency in circular no. 10/E of 3 July 2025. Compared with that framework, the Omnibus decree produces a number of significant effects: the “new registration” requirement is removed, the residual criterion of the “reduced normal value” is abandoned and two new flat-rate increases to the fringe benefit are introduced:
1) A 50% increase for vehicles beyond the fifth year from first registration (vehicle age) and
2) A 5% increase for accessories and equipment not valued in the ACI tables.
This circular sets out the new legislative framework applicable from the 2026 tax period, addressing all the situations that may theoretically arise and the related methods of quantifying the benefit, with numerical examples.
1a. The new general rule applicable from 1 January 2026
Article 2, paragraph 1, of Legislative Decree no. 148/2026 entirely replaces letter a) of Article 51, paragraph 4, of the TUIR. The new text provides that, for the motor vehicles indicated in Article 54, paragraph 1, letters a), c) and m), of the Highway Code, as well as for motorcycles and mopeds, assigned for mixed use, 50 per cent of the amount corresponding to a notional mileage of 15,000 kilometres is taken into account, calculated on the basis of the per-kilometre operating cost derived from the national ACI tables, net of any amounts withheld from the employee in connection with the assignment of the vehicle, including those relating to accessories and equipment.
The percentage is reduced to 10 per cent for battery vehicles powered exclusively by electricity and to 20 per cent for plug-in hybrid electric vehicles.
Compared with the wording introduced by the 2025 Budget Law, the references to “new registration” and to “contracts entered into from 1 January 2025” have been removed. Consequently, from 2026, for assignments subject to the ordinary regime the only relevant factor in identifying the applicable regime is the time at which the vehicle is assigned for mixed use (i.e. the date on which it is physically made available to the employee). Under that regime the date of first registration is relevant only for the purposes of the 50% flat-rate increase for vehicle age (vehicles beyond the fifth year from first registration). By contrast, for vehicles falling within the transitional regime, the registration date is relevant both for identifying the period of application of the criterion based on CO₂ emissions and for the starting date of the 50% flat-rate increase for vehicle age.
Two regimes therefore coexist, for which the applicable flat-rate percentages are summarised below:
| CO₂ regime (Article 51(4)(a) of the TUIR as in force at 31.12.2024 – transitional regime) | % | New flat-rate regime by type of power source (Article 51(4)(a) of the TUIR as amended by Legislative Decree 148/2026) | % |
| CO₂ emissions up to 60 g/km | 25% | Vehicles powered exclusively by electricity (BEV) | 10% |
| CO₂ emissions from 61 to 160 g/km | 30% | Plug-in hybrid electric vehicles (PHEV) | 20% |
| CO₂ emissions from 161 to 190 g/km | 50% | All other vehicles (petrol, diesel, LPG, natural gas, full/mild hybrid) | 50% |
| CO₂ emissions above 190 g/km | 60% | — | — |
Under both regimes the calculation basis is the ACI per-kilometre cost multiplied by the notional annual mileage of 15,000 km, apportioned to the period during which the vehicle was actually assigned for mixed use during the tax period.
It should be noted that vehicles assigned in 2025 that were not ordered by 31 December 2024 are subject to the new flat-rate regime “by type of power source”.
1b. The 50% increase for vehicles beyond the fifth year from first registration
The most significant new feature is the mechanism for adjusting the taxable value of the fringe benefit according to the age of the vehicle: the values determined using the flat-rate percentages are increased by 50 per cent after 31 December of the fifth year following the year of first registration.
The parameter chosen is therefore the objective and non-manipulable date of first registration, and not the date of assignment to the individual employee. By way of example, for a vehicle first registered during 2020, the fifth subsequent year is 2025: the increase therefore applies from 1 January 2026. For a vehicle registered in 2024, the increase will apply from 1 January 2030. It should be noted that the increase in question applies both to vehicles subject to the new regime and to vehicles that continue to be valued under the transitional regime based on CO₂ emissions, by virtue of the express provision inserted in paragraph 48-bis of Law no. 207/2024.
It should also be noted, for completeness, that the literal wording of the provision (“after 31 December of the fifth subsequent year”) has been subject to differing interpretations among commentators, with the alternative view that the count should start from the sixth year following first registration. Pending official clarification, the literal interpretation set out above has been adopted in the tables below.
Finally, it should be highlighted that, consistently with the principle that the regime follows the vehicle and not the person, the age accrued by the vehicle is not reset where the vehicle is reassigned to another employee, including within the same group.
1c. The 5% increase for accessories and equipment
The decree expressly regulates an aspect that has historically lacked a clear criterion, namely optional extras. The provision states that “where there are accessories or equipment not valued in the [ACI] tables** and not purchased directly by the employee, the value […] is increased by 5 per cent”.
**ACI tables for 2026 published in Official Gazette no. 297 of 23 December 2025
The increase therefore presupposes that two conditions are met simultaneously:
• the accessory or equipment is not separately valued in the ACI tables applicable to the model;
• the accessory or equipment was not purchased directly by the employee (in which case it remains irrelevant for fringe benefit purposes).
Practical guidance – For each vehicle, the version/trim identified in the ACI table must be compared with the configuration actually assigned, on the basis of the order, the invoice or the leasing company’s specification sheet. If the vehicle has even a single additional accessory or item of equipment not purchased directly by the employee, a single 5% increase applies. It does not apply, however, where the equipment corresponds to the base version listed in the table or where the accessories were purchased directly by the employee. Where documentation is incomplete, it is advisable, on a prudential basis, to apply the 5% provisionally, subject to subsequent verification and adjustment.
This approach is consistent with ruling no. 233 of 9 September 2025 of the Italian Revenue Agency, according to which any optional extras are not taken into account in determining the per-kilometre cost derived from the ACI tables. The new 5% flat-rate increase provided for by Legislative Decree no. 148/2026 is therefore intended to capture, where the conditions are met, accessories and equipment additional to the configuration listed in the tables, provided they were not purchased directly by the employee.
In essence, it would appear that, in order for the 5% increase not to apply, all the accessories and equipment of the assigned vehicle must be included in the description of the vehicle set out in the ACI tables or, failing that, those not included must have been purchased directly by the employee.
A distinction must be drawn between the direct purchase of the accessory or equipment by the employee, which excludes the application of the 5% increase, and amounts withheld from or recharged to the employee by the employer in connection with the assignment of the vehicle. The latter, including those relating to accessories and equipment, reduce the value of the fringe benefit on the terms set out in Article 51, paragraph 4, letter a), of the TUIR.
The 5% increase applies from 1 January 2026:
• to vehicles assigned for mixed use from 2026;
• to vehicles assigned for mixed use in 2025 that were not ordered by 31 December 2024 and that therefore do not fall within the transitional regime;
• to vehicles assigned from 1 July 2020 to 31 December 2024 and to those ordered by 31 December 2024 and assigned for use in 2025, even though subject to the transitional CO₂ regime.
A safeguard clause is expressly provided for: the approaches adopted by employers up to 31 December 2025 as regards the taxation of accessories are preserved, without this giving rise to any refund of any higher taxes already paid.
For calculation purposes, the 5% increase applies to the value already determined under the preceding sentences and therefore, where the conditions are met, after application of the 50% increase for vehicle age. The calculation sequence is therefore as follows:
[(ACI per-kilometre cost × 15,000 km × flat-rate percentage) – amounts withheld from the employee] × (1.50 if the vehicle is more than five years old) × (1.05 if there are optional extras not listed in the tables)
N.B. The sequence of the formula set out above reflects the literal order of the sentences of Article 51, paragraph 4, letter a), of the TUIR; any official clarifications on this point should be monitored.
1d. The transitional regime (Article 1, paragraph 48-bis, of Law no. 207/2024) as updated by Legislative Decree no. 148/2026
Article 2, paragraph 2, of the Omnibus decree rewrites paragraph 48-bis of the 2025 Budget Law. Article 51, paragraph 4, letter a), of the TUIR, in the text in force at 31 December 2024 – and therefore the valuation of the benefit on the basis of CO₂ emissions – continues to apply until 31 December of the fifth year following the year of first registration, for:
• vehicles assigned for mixed use from 1 July 2020 to 31 December 2024;
• vehicles ordered by employers by 31 December 2024 and assigned for mixed use during 2025.
For this second group of vehicles there is a significant broadening in favour of employers: the reference to the 30 June 2025 deadline has been removed, which under the previous wording required the normal value criterion to be applied to deliveries made after that date, in place of the more favourable table-based regime. Consequently, all vehicles ordered by 31 December 2024 and delivered at any time during 2025 fall within the transitional regime.
The reformulated paragraph 48-bis also specifies that:
- after 31 December of the fifth year following first registration the value is increased by 50 per cent, and that
- the same provisions also apply where the vehicles are assigned for mixed use to another employee, thereby confirming that the regime – and with it the calculation of the vehicle’s age – follows the vehicle and not the person.
1e. The abandonment of the “reduced normal value” criterion
As explained in our circular no. 9/2025, for situations that fell neither within the new rules nor within the transitional rules (the Italian Revenue Agency – in circular no. 10/E/2025, confirmed by ruling no. 192/2025 – required the application of the reduced normal value criterion under Articles 51, paragraph 3, and 9 of the TUIR, determined as follows:
(lease or rental fee borne by the employer) – (ACI per-kilometre allowance x kilometres travelled in the employer’s interest).
With the removal of the requirements of first registration and of the date on which the contract was entered into, from 1 January 2026 this residual criterion no longer applies to vehicles assigned for mixed use: the flat-rate rule of 15,000 notional kilometres in fact covers the entire scope of mixed-use assignments. The normal value criterion remains relevant only for situations unrelated to the mixed use of vehicles falling within Article 54, paragraph 1, letters a), c) and m), of the “Codice della Strada” (by way of example: assignment for exclusively personal use, lorries and vehicles not included in the categories referred to, assets other than vehicles).
It remains confirmed, however, that the “reduced normal value” criterion applied for the 2025 tax period to situations attributable neither to the new rules nor to the transitional regime, with the consequent need, for those vehicles, to manage the change of criterion in the 2026 year-end adjustment.
1f. Contract extension and reassignment of the vehicle
Under the new legislative framework, the applicable regime depends solely on the time at which the vehicle is assigned for mixed use. It follows that:
• the extension of an existing contract, in the absence of objective or subjective changes, does not constitute a new assignment and does not alter the applicable regime (consistently with the clarification given in circular no. 10/E/2025);
• the reassignment to another employee of a vehicle already falling within the transitional regime does not cause the loss of the transitional CO₂ regime, by express provision of the new paragraph 48-bis; this therefore supersedes, in substance, the earlier guidance provided by the Italian Revenue Agency, in relation to the previous provision, in circular no. 10/2025 (§ 1.4). In that document it was stated that, where a vehicle is reassigned to another employee through the conclusion of a new contract involving a different person, the applicable tax rules were to be identified on the basis of the provisions in force at the time of the reassignment;
• reassignment does not reset the calculation of the vehicle’s age, which remains anchored to the date of first registration;
• for vehicles returned to the company’s fleet and reassigned from 2026, the regime remains that of the vehicle (transitional or new) depending on when the vehicle was first assigned for mixed use, save where the vehicle has never previously been assigned for mixed use, in which case the new regime applies in full.
1g. Cars assigned by 30/06/2020
The new provisions do not appear to affect the rules applied to cars assigned for mixed use by 30/06/2020. Therefore, for the term of the contract entered into by 30.06.2020, the regime under Article 51, paragraph 4, letter a), of the TUIR in the text in force at 31.12.2019 would remain applicable, pursuant to Article 1, paragraph 633, of Law no. 160 of 27.12.2019: 30% of the ACI per-kilometre cost over 15,000 km per year, net of any amounts withheld from the employee.
1h. Effective date and treatment of past practice
The new provisions apply from the 2026 tax period and also concern vehicles already assigned for mixed use during 2025 that do not fall within the scope of the transitional regime. For earlier tax periods, the rules set out in our previous circulars continue to apply.
Given that the new provisions expressly apply from the 2026 tax period, withholding agents will have to review, for each vehicle, the fringe benefit valuation accrued from 1 January 2026, identifying all the differences compared with the rules applied up to 12 August 2026: not only any 5% increase for accessories and equipment, but also the application of the new percentages by type of power source, the 50% increase for vehicle age, the abandonment of the normal value criterion for the situations concerned and the changes to the transitional regime, including reassignments. The related tax and social security realignment may be carried out as early as the September 2026 payslip, where the necessary checks have been completed, and it is in any event advisable to complete it by the December 2026 payslip, by means of a separate adjustment item. The instructions that may be issued by the competent social security bodies remain to be verified.
With specific regard to accessories and equipment, as already noted, the approaches adopted by employers up to 31 December 2025 are preserved, with no right to a refund of any higher taxes paid.
2. SUMMARY OF ALL SITUATIONS
The table below summarises all the situations that may theoretically arise, indicating the regime applicable for the 2026 tax period and subsequent periods. It should be noted that, for all situations, the date of first registration is relevant solely for the purposes of the 50% increase for vehicle age.
| No. | Situation – time at which the vehicle is assigned for mixed use | Further conditions | Regime applicable from 2026 |
| 1 | Vehicles assigned for mixed use by 30 June 2020 | Contract entered into by 30.06.2020 and still in force without changes | The regime under Article 51, paragraph 4, letter a), of the TUIR in the text in force at 31.12.2019 remains applicable for the term of the contract entered into by 30.06.2020, pursuant to Article 1, paragraph 633, of Law no. 160 of 27.12.2019: 30% of the ACI per-kilometre cost over 15,000 km per year, net of any amounts withheld from the employee. |
| 2 | Vehicles assigned for mixed use from 1 July 2020 to 31 December 2024 | No further conditions | The transitional CO₂ regime continues to apply (25/30/50/60%). From 1 January following 31 December of the fifth year after first registration, the value so determined is increased by 50%. From 1 January 2026 the 5% increase for optional extras not listed in the tables also applies, where the relevant conditions are met. |
| 3 | Vehicles assigned for mixed use in 2025 | Ordered by the employer by 31.12.2024 (the delivery date in 2025 is irrelevant) | Transitional CO₂ regime as per no. 2. Compared with the previous text, the 30.06.2025 limit no longer applies: the regime extends to all assignments made during 2025 for vehicles ordered by 31.12.2024. |
| 4 | Vehicles assigned for mixed use in 2025 | Not ordered by 31.12.2024; newly registered and contract entered into from 1.1.2025 | For 2025: new regime under Law 207/2024 (50/20/10%). From 2026: same percentages with the 5% increase for optional extras and, where applicable, the 50% increase for vehicle age |
| 5 | Vehicles assigned for mixed use in 2025 | Not ordered by 31.12.2024; not newly registered and/or contract entered into before 2025 | For 2025: reduced normal value (circular 10/E/2025; ruling 192/2025). From 2026: new flat-rate regime 50/20/10% with the 5% and 50% increases |
| 6 | Vehicles assigned for mixed use from 1 January 2026 | The order date, the registration date and the date the contract was entered into are all irrelevant | New regime: 50% (10% BEV; 20% PHEV) of the ACI cost over 15,000 km, + 50% if the vehicle is more than five years old, + 5% if there are optional extras not listed in the tables, net of amounts withheld |
| 7 | Reassignment of the vehicle to another employee | Vehicle already under the transitional regime (nos. 2 and 3) | The transitional CO₂ regime continues for the new assignee; the age of the vehicle is not reset (Article 1, paragraph 48-bis, of Law 207/2024) |
| 8 | Reassignment of the vehicle to another employee | Vehicle already under the new regime (nos. 4, 5 and 6) | The new flat-rate regime continues; the age of the vehicle is not reset |
| 9 | Extension of the existing contract | No objective or subjective changes | The regime already applied to the original contract continues |
| 10 | Vehicle with accessories or equipment purchased directly by the employee | Optional extras borne by the employee | No 5% increase for accessories or equipment purchased directly by the employee. Amounts withheld from or recharged to the employee by the employer in connection with the assignment of the vehicle, including those relating to accessories and equipment, remain separately relevant on the terms set out in Article 51, paragraph 4, letter a), of the TUIR. |
| 11 | Recharge to the employee of amounts for use of the vehicle | Invoicing or deduction from the payslip | The amounts withheld (including VAT and, from 2026, also those relating to accessories and equipment) are deducted from the flat-rate value determined |
| 12 | Assignment of the vehicle for exclusively business use | Absence of private use, documented by policies and monitoring tools | No taxable fringe benefit |
| 13 | Assignment of the vehicle for exclusively personal use | No business use | Normal value under Articles 51(3) and 9 of the TUIR (the flat-rate criterion does not apply) |
| 14 | Vehicles not falling within Article 54(1)(a), (c) and (m) of the Highway Code | E.g. lorries, special vehicles | Normal value under Articles 51(3) and 9 of the TUIR |
| 15 | Motorcycles and mopeds assigned for mixed use | Expressly included in the provision | Same regime as for motor vehicles, with the percentages and increases set out above |
3. PRACTICAL EXAMPLES
The ACI per-kilometre costs and the monetary values shown in the following examples are purely illustrative and must be replaced with the actual figures derived from the ACI tables in force in the relevant tax period and from the contractual documentation. In particular, where the number of kilometres travelled in the employer’s interest is relevant, that figure must be verified on a case-by-case basis on the basis of appropriate documentation.
Example 1 – Newly registered electric vehicle (BEV) assigned in 2026, without optional extras outside the tables
| Item | Figure / calculation |
| First registration | 2026 |
| Date of assignment for mixed use | 1 March 2026 |
| ACI per-kilometre cost | €0.55/km |
| Notional mileage | 15,000 km |
| Flat-rate percentage | 10% (powered exclusively by electricity) |
| Increase for vehicle age | Not applicable |
| Increase for optional extras | Not applicable |
| Calculation | 0.55 × 15,000 × 10% = €825.00 |
| Annual fringe benefit | €825.00 (to be apportioned to the days of actual assignment: from 1 March to 31 December 2026, 306/365 = €691.64) |
Example 2 – Newly registered plug-in hybrid vehicle (PHEV) assigned in 2026, with optional extras not valued in the ACI tables
| Item | Figure / calculation |
| First registration | 2026 |
| ACI per-kilometre cost | €0.68/km |
| Flat-rate percentage | 20% (plug-in hybrid) |
| Increase for vehicle age | Not applicable |
| Increase for optional extras | + 5% (accessories not listed in the tables, not purchased by the employee) |
| Calculation | 0.68 × 15,000 × 20% = €2,040.00 2,040.00 × 105% = €2,142.00 |
| Annual fringe benefit | €2,142.00 |
Example 3 – Petrol vehicle registered in 2020, assigned for mixed use for the first time in 2026, with optional extras not valued in the ACI tables
| Item | Figure / calculation |
| First registration | 2020 |
| Date of assignment for mixed use | January 2026 (first assignment) |
| ACI per-kilometre cost | €0.65/km |
| Flat-rate percentage | 50% (conventional fuel) |
| Increase for vehicle age | + 50% (fifth year after 2020 = 2025; increase from 1 January 2026) |
| Increase for optional extras | + 5% |
| Calculation | 0.65 × 15,000 × 50% = €4,875.00 4,875.00 × 150% = €7,312.50 7,312.50 × 105% = €7,678.13 |
| Annual fringe benefit | €7,678.13 |
Example 4 – Diesel vehicle under the transitional regime (assigned for mixed use in 2024), with optional extras not valued in the ACI tables
| Item | 2025 | 2026 |
| First registration | September 2024 | September 2024 |
| Assignment for mixed use | 1 October 2024 | Ongoing |
| CO₂ emissions | 194 g/km | 194 g/km |
| ACI per-kilometre cost | €1.034/km | €1.034/km |
| Flat-rate percentage | 60% (CO₂ regime) | 60% (CO₂ regime) |
| Increase for vehicle age | Not applicable | Not applicable (+ 50% from 1 January 2030) |
| Increase for optional extras | Not applicable (safeguard of approaches adopted up to 31.12.2025) | + 5% |
| Calculation | 1.034 × 15,000 × 60% = €9,306.00 | 9,306.00 × 105% = €9,771.30 |
| Annual fringe benefit | €9,306.00 | €9,771.30 |
Example 5 – Vehicle under the transitional regime exceeding the fifth year from first registration
| Item | 2025 | 2026 |
| First registration | March 2020 | March 2020 |
| Assignment for mixed use | 1 September 2020 | Ongoing |
| CO₂ emissions | 150 g/km | 150 g/km |
| ACI per-kilometre cost | €0.60/km | €0.60/km |
| Flat-rate percentage | 30% (CO₂ regime) | 30% (CO₂ regime) |
| Increase for vehicle age | Not applicable | + 50% (fifth year after 2020 = 2025, increase from 1 January 2026) |
| Increase for optional extras | Not applicable | Not applicable (no optional extras outside the tables) |
| Calculation | 0.60 × 15,000 × 30% = €2,700.00 | 2,700.00 × 150% = €4,050.00 |
| Annual fringe benefit | €2,700.00 | €4,050.00 |
Example 6 – Vehicle assigned in 2025 outside the transitional regime: transition from the reduced normal value to the new flat-rate criterion
| Item | 2025 (reduced normal value) | 2026 (new flat-rate regime) |
| First registration | December 2024 | December 2024 |
| Employer’s order | February 2025 (after 31.12.2024) | — |
| Assignment for mixed use | May 2025 | Ongoing |
| Power source | Non-plug-in hybrid | Non-plug-in hybrid |
| Annual rental fee | €9,600 | Irrelevant |
| ACI per-kilometre cost | €0.72/km | €0.72/km |
| Km travelled in the employer’s interest | 10,000 km (to be documented) | Irrelevant |
| Increase for optional extras | Not applicable | + 5% |
| Calculation | 9,600 – (0.72 × 10,000) = €2,400.00 | 0.72 × 15,000 × 50% = €5,400.00 5,400.00 × 105% = €5,670.00 |
| Annual fringe benefit | €2,400.00 | €5,670.00 |
Example 6 illustrates the most significant impact of the reform: for vehicles subject in 2025 to the reduced normal value criterion, the move to the flat-rate criterion may entail a considerable increase in the taxable amount, with consequent effects on withholding taxes and social security contributions. It is recommended that the employees concerned be informed before payroll processing begins.
4. PRACTICAL RECOMMENDATIONS
In light of the interplay between the new rules, the transitional regime and the safeguard clauses, withholding agents are advised to proceed promptly with:
• a detailed mapping of the company car fleet, identifying for each vehicle the order date, the date of first registration, the date of assignment for mixed use and the date on which the contract with the employee was entered into;
• the classification of vehicles by power source (BEV, PHEV, others) and, for those under the transitional regime, by CO₂ emissions band;
• the review of accessories and equipment not valued in the ACI tables, distinguishing those purchased directly by the employee from those borne by the employer;
• the identification of vehicles exceeding the fifth year from first registration during 2026 and in subsequent years, updating the calculations from 1 January of the year in which the increase applies;
• the updating of company car policies and assignment contracts, also in order to assess whether to recharge amounts to the employee to reduce the taxable amount;
• the adaptation of payroll systems and fleet management software, with particular attention to the correct order of application of the 50% and 5% increases;
• the management of adjustments for vehicles that in 2025 were subject to the reduced normal value criterion and that from 2026 move to the flat-rate criterion, as well as for reassignments made during the year.
Finally, it should be noted that, as at the date of this circular, no official guidance from the Italian Revenue Agency on the new legislative framework has yet been issued. Certain aspects of application – in particular the exact calculation of the five-year period, the treatment of vehicles assigned before 1 July 2020 and the scope of the relevant accessories – may be the subject of subsequent clarifications, of which we will promptly inform you.
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The attention of those concerned is drawn to the fact that this circular constitutes preliminary information and guidance on the application of the rules and provisions discussed.
For obvious reasons of timeliness and brevity, it does not provide a complete and exhaustive treatment of the topics and is not intended to suggest binding decisions and/or courses of action.