From 2025 (from 18 June for part of self-employed work) board, lodging, taxi and NCC paid in cash in Italy lose the deduction and the exemption from tax.
A hotel, a meal or a taxi paid in cash in Italy costs twice over: the expense is not deductible and the reimbursement becomes taxable for the employee. The obligation, however, applies only to expenses incurred within the territory of the State, save for spese di rappresentanza (entertainment expenses).
The condition stems from articolo 1, commi 81-83 (subsections), of legge 30 dicembre 2024, n. 207. Payment by bank or post office transfer, or by one of the other systems listed in articolo 23 of d.lgs. 9 luglio 1997, n. 241, is the precondition for the exemption of the reimbursements paid to employees under articolo 51, comma 5, of the TUIR (the Italian consolidated income tax act), for the deductibility of business travel expenses under articolo 95, comma 3-bis, and for that of entertainment expenses under articolo 108, comma 2, for the purposes of IRAP (the Italian regional tax on productive activities) as well. The rules apply from the tax period following the one in progress at 31 December 2024.
The condition was confined to expenses “sostenute nel territorio dello Stato”, that is, incurred within the territory of the State, by articolo 1 of d.l. 17 giugno 2025, n. 84, converted by legge 30 luglio 2025, n. 108. The same provision redistributed the traceability rules for self-employed work among articoli 54, 54-ter and 54-septies TUIR, articles that d.lgs. 13 dicembre 2024, n. 192, had already rewritten, and inserted commi 5-bis and 5-ter into articolo 109. For the latter, and for the expenses incurred directly by the professional, entertainment expenses included, the starting date is 18 June 2025; for everything else it is 1 January 2025, as the Agenzia delle entrate (the Italian Revenue Agency) states in circolare (circular) n. 15/E del 22 dicembre 2025.
Caught are board, lodging, travel and transport by the autoservizi pubblici non di linea (non-scheduled public transport services) referred to in articolo 1 of legge 15 gennaio 1992, n. 21, that is, taxis and NCC (chauffeur-driven hire cars), including those booked through a platform; to these the imposta di soggiorno (tourist tax) is added (circolare n. 15/E). The obligation also covers travel within the municipality of the workplace, where articolo 51, comma 5, quarto periodo, TUIR taxes every sum paid, save for travel and transport expenses that are evidenced and documented, which have to be paid by traceable means where a taxi or an NCC is involved.
Outside the scope, wherever they are incurred, are scheduled transport tickets (bus, train, plane, ship) and mileage allowances. Also excluded are the other expenses, those other than board, lodging, travel and transport, reimbursed on an itemised basis up to EUR 15.49 a day (EUR 25.82 for trips abroad), but only where the trip is outside the municipality.
From the traceability condition laid down by articolo 51, comma 5, ultimo periodo, TUIR, the law excludes the reimbursements due from 1 January 2025 to the personnel of the Forze armate (the armed forces), of the Forze di polizia (the police forces, articolo 16 of legge 1° aprile 1981, n. 121) and of the Corpo nazionale dei vigili del fuoco (the national fire and rescue service): so provides articolo 14, comma 2, of d.l. 24 febbraio 2026, n. 23, converted by legge 24 aprile 2026, n. 54.
Advertising and sponsorship are not entertainment expenses, save for the investments referred to in articolo 15, commi 2 e 3, of d.lgs. 25 marzo 2024, n. 41, borne by the “concessionari di cui all’articolo 2, comma 1, lettera b)”, the concession holders defined in that provision of the same decree. What qualifies those investments as entertainment expenses in every case is articolo 108, comma 2-bis, TUIR, inserted by articolo 3, comma 3, of d.l. 26 agosto 2026, n. 153, currently undergoing conversion; the rule applies to expenses incurred from the tax period following the one in progress at 31 December 2025.
For directors the rules split in two. Where the director is in receipt of employment income or of income from a collaborazione coordinata e continuativa (co.co.co., a coordinated and continuous collaboration), articolo 95, comma 3-bis, applies together with the limits in comma 3, which relate to board and lodging alone (EUR 180.76 a day outside the municipality, EUR 258.23 abroad); otherwise articolo 109, comma 5-ter, applies, with no ceiling and with board and lodging deductible at 75 per cent (comma 5).
For 2025, by 2 November 2026, note spese (expense reports) and invoices have to be gone through again, isolating the board, lodging, taxi and NCC expenses incurred in Italy for which there is no evidence of traceable payment, and adding them back among the upward adjustments in REDDITI and IRAP 2026. Foreign expenses are not to be added back, nor are the reimbursements paid in 2025 for expenses incurred in 2024.
For the 2025 reimbursements that were neither traceable nor taxed, an amended Certificazione Unica (the Italian single certification of income) and a correction to the modello 770 (the withholding agent’s return) are needed, weighing up the ravvedimento (voluntary correction with reduced penalties).
From 2026 the nota spese has to state the means of payment and carry the evidence of it (card receipt, postal payment slip, MAV, PagoPA; the bank statement is residual evidence). On untraceable reimbursements the withholding has to be applied by the year-end adjustment. The tax document, the evidence of payment and the authorised nota spese have to be kept until the assessment time limits expire.
Is the taxi the employee paid for in cash in Milan reimbursable?
Yes, but the reimbursement forms part of the employee’s income and the cost is not deductible, for IRAP purposes as well.
Is traceable payment needed for a hotel in Paris?
No, the obligation concerns only the expenses incurred in Italy; entertainment expenses, by contrast, have to be traceable wherever they are incurred.
Articolo 1, commi 81-83, of legge 30 dicembre 2024, n. 207, which introduced the traceability condition, and comma 82 for its effect on IRAP under decreto legislativo 15 dicembre 1997, n. 446; text in force at 23 September 2026.
Articolo 1 of decreto-legge 17 giugno 2025, n. 84, converted with amendments by legge 30 luglio 2025, n. 108, which confined the obligation to expenses incurred within the territory of the State and set the starting dates; text in force at 23 September 2026.
Articoli 51, comma 5, 54, 54-ter, 54-septies, 95, commi 3 e 3-bis, 108, comma 2, and 109, commi 5, 5-bis e 5-ter, of the testo unico delle imposte sui redditi (the Italian consolidated income tax act), approved by decreto del Presidente della Repubblica 22 dicembre 1986, n. 917, as amended by decreto legislativo 13 dicembre 2024, n. 192; text in force at 23 September 2026.
Articolo 23 of decreto legislativo 9 luglio 1997, n. 241, for the means of payment admitted; text in force at 23 September 2026.
Articolo 1 of legge 15 gennaio 1992, n. 21, for the autoservizi pubblici non di linea (non-scheduled public transport services); text in force at 23 September 2026.
Articolo 14, comma 2, of decreto-legge 24 febbraio 2026, n. 23, converted with amendments by legge 24 aprile 2026, n. 54, and articolo 16 of legge 1° aprile 1981, n. 121, for the exclusion of the personnel of the Forze armate, of the Forze di polizia and of the Corpo nazionale dei vigili del fuoco; text in force at 23 September 2026.
Articolo 1, comma 1, of decreto ministeriale 19 novembre 2008, for the notion of spesa di rappresentanza (entertainment expense), and articolo 15, commi 2 e 3, and articolo 2, comma 1, lettera b), of decreto legislativo 25 marzo 2024, n. 41; text in force at 23 September 2026.
Articolo 3, commi 3 e 6, of decreto-legge 26 agosto 2026, n. 153, which inserted comma 2-bis into articolo 108 of the testo unico delle imposte sui redditi: a decree undergoing conversion at the date of publication.
Agenzia delle entrate, circolare n. 15/E del 22 dicembre 2025, paragraphs 1 to 5, for the scope of the obligation, travel within the municipality, the daily threshold, the evidence of payment and the reimbursements paid from 1 January 2025 in respect of expenses incurred in the preceding tax period.
Decreto legislativo 24 marzo 2025, n. 33, the application of which is deferred to 1 January 2027 by decreto-legge 31 dicembre 2025, n. 200, converted by legge 27 febbraio 2026, n. 26, and decreto legislativo 19 giugno 2026, n. 117, which applies from the same date: neither affects the framework described here at 23 September 2026.
This note reflects the legislation and administrative practice in force at the date of publication and does not replace an examination of the individual case. Decreto-legge 26 agosto 2026, n. 153 is still awaiting conversion: the text discussed is the one in force on 23 September 2026.