Allowance expenses and reimbursement of expenses: limits exemptions from income of employees

The workers sent away are paid in payroll expense reimbursements and compensation for work outside the town hall. The IRS provides for exemptions from employment income, beyond which the figures contribute to the taxable receipts tax. We see all aspects.

During the course of the employment relationship often, especially for particular sectors (such as construction) that the company who needs to send its workers away outside the municipality where the company is located. In this case, generally, the worker is entitled to reimbursement of expenses to the perception of a travel allowance.

The travel allowance or per diem is a daily allowance granted to the employee who is temporarily employed in a place other than the seat contractual employment to their job performance. This allowance may be accompanied by reimbursement of expenses at the bottom of the list, in full or in part. Deepen the tax treatment of these fees paid to the employee in payroll.

Article. 51 of Presidential Decree n. 917/1986 (Tax Code) governs the system of taxation of transfers and more specifically in paragraph 5 introduces three different methods of reimbursement to the employee: the lump-sum refund, reimbursement and refund mixed analytical. Based on the company chooses which method for disbursing the subsistence, with the addition of reimbursement of expenses or as an alternative to reimbursement of expenses, the IRS provides an exemption from the application of more or less income tax on the perceived by the employee.

Choice of repayment methods. We have to clarify that the methods of reimbursement of expenses and subsistence allowance are alternative to each other and may not be combined. In the sense that it is not possible, within the same business trip, adopt different criteria for reimbursement for individual days included in the period in which the employee is located outside the workplace. This is established by a circular of the Revenue.

 

Reimbursement with the standard method

It is a travel allowance recognized in a fixed manner to the employee for each day of work away (out of the ordinary where the headquarters of their work contract) and such pre-established figure does not include expenditure actually incurred by the employee, which therefore has to manage the daily expenses taking into account the lump-sum reimbursement received.

46,48 € per day free (77.46 for travel abroad). With regard to the tax treatment of the reimbursement, the first part of paragraph 5 states that "the allowances paid for travel and missions outside the municipal area combine to form the income for the part exceeding EUR 46.48 per day, higher at 77 , 47 € for travel abroad, net of expenses of travel and transport. " This exemption is also applied for the placing social security, and also the contributions paid by the employee will be calculated for the amount exceeding these figures.

Therefore, the income of the employee, or more precisely the taxable payroll on which you calculate the income tax due, it increases only for reimbursements exceeding 46,48 € per day and for the excess (77.46 € for travel abroad). This amount exceeding therefore will be subject to tax, the employee sent away will pay the tax and additional income tax on the share of regional and municipal repayment beyond € 46.48 (or € 77.46).

These daily limits established by the IRS refer to each calendar day conduct of the business trip, as well as the municipal territory, and there is no reduction in relation to the duration of the trip itself. As required by law, reimbursement is determined net of expenses of travel and transport that have been incurred by the employee and for which adequate supporting documents submitted, the worker is entitled to the recognition of an additional refund.

 

Money back with mixed method

Another system of reimbursement to the employee is the mixed method. With this method, similar to the provisions of the lump-sum reimbursement, travel expenses and transportation shall be reimbursed separately. The difference compared to the standard method is that in this case, in addition to the allowance for travel, the employee is also entitled to reimbursement of expenses at the bottom of the list for the board and lodging. Or alternatively is granted to the employee an accommodation or free meals.

In tax matters, the second part of paragraph 5 of article. 51 of Presidential Decree n. 917/1986 (Tax Code) provides that "in case of reimbursement of accommodation costs, or those of the accommodation, or accommodation or meals provided free of charge the limit is reduced by one third. The limit 'reduced by two thirds in the case of repayment of housing costs than those for food. " So we can distinguish three types of exemptions:

- Exemption to the extent of 30.98 euro per day (one-third reduction), raised to € 51.64 for travel abroad, in the case of recognition of compensation to the employee travel expenses plus the reimbursement of expenses for meals or for 'accommodation;

- Exemption up to the limit of 15.49 euro per day (two-thirds reduction), raised to € 25.82 for travel abroad, in the case of recognition of compensation to the employee travel expenses plus the reimbursement of expenses for both the board and for accommodation.

In the case of recognition of transfer allowance plus reimbursement for travel and expenses for transportation, remember that the exemption limit remains of 46.48 € for the trip to Italy and 77.46 for the trip abroad . Likewise if the company reimburses the employee at the bottom of the list any other expenses as may be eg telephone charges, parking fees, races, laundry, etc..

As we have already said, this exemption is also applied for the placing social security, and also the contributions paid by the employee will be calculated for the amount exceeding these figures.

 

Reimbursement with the analytical method

With this system, however all expenses incurred by the employee in carrying out their work performance in the place where it was sent away are analyzed analytically and the company provides fully reimburse the expenditure incurred on the basis of known expenditure submitted by the employee with all attachments supporting documents.

Food, accommodation, travel and transport. Paragraph 5 of Presidential Decree n. 917 & 1986 (ITCA), states that "In the case of analytical reimbursement of expenses for travel or missions outside the municipality shall not constitute income refunds of documented expenses related to food, housing, travel and transport."

So the cost of food, accommodation, travel (even in the form of mileage allowance), transport are all reimbursed by the employer at the bottom of the list and do not form part of the taxable income of the employee, regardless of the amount of the refund expenses. Obviously in the case of analytical refund the worker does not receive allowances, which would be subject to tax for the amount exceeding the exemption.

The other documented expenses. Paragraph 5 also establishes the treatment of other charges, those other than food, housing, travel and transport by establishing that do not form part of the employee's income as "redemptions of other expenses, including not documented, it may be borne by employee, always on the occasion of such transfers or assignments, up to a daily maximum of € 15.49, € 25.82 for elevated to travel abroad. "

So for other expenses such as telephone charges, parking fees, tips, laundry etc.., Analytically documented and presented to the employer, shall be reimbursed by the company but the share of expenses in excess of € 15,49 (or € 25.82) is included nell'imponibile tax and then the employer will calculate the taxes due (income tax, additional regional and municipal) on these figures expense reimbursement received.

Documented expenses for reimbursement analytical. In fiscal terms for the purposes of evidence of expenditure the employee must provide the employer the documents provided by art. 3 of Presidential Decree n. 696 of 1996, that is to say can be used one of the following documents:

- The expense report with an overview of all expenses incurred, accompanied by receipts, receipts and transportation tickets;

- Invoices;

- The receipts, provided that they contain, however, the specification of the factors related to the nature, quality and quantity of the transaction and an indication of the tax identification number of the purchaser;

- The tax receipt with the identification data of the customer;

- The documentation for the cost of corporate credit card.

 

Allowances and reimbursements for travel expenses in the municipal

Subsistence allowances and reimbursements included in payroll through the method of lump-sum refund, analytical or mixed, concern transfers by a municipality other than the one where he established his own company. Or rather a different municipality from the place of work indicated in their individual employment contract entered into with the company.

From the fiscal point of view this distinction between allowances and reimbursements received for the trip outside the municipality or company for the trip in the municipal company, has an important significance for the purposes of the income tax base of the employee sent away .

A component of the income tax burden. Article. 51 paragraph 5 of the Income Tax Code governs this case, in fact, also stating that "The allowances or reimbursement of expenses for travel within the municipality, except for the reimbursement of transport costs supported by documents from the carrier, a component of the income." So everything that the company delivers to the employee away in the same municipality where the headquarters of their work is treated as taxable income and then the employee pays taxes due on these figures. The only exception are the transport costs, which shall be supported by documents obtained by the carrier.

 

The tax treatment of the income of transfer for

In this case it is those workers who are not sent away by the company, but to those required by contract workers to perform their work in different places and ever-changing. In this case, you lose the character of the temporary and the change in place of work by sending in a place of business located in another town, as is the case for relocation.

For workers is provided by the IRS transfer for a different mode of competition to the income allowances and bonuses received by the employer for the performance of this particular activity with various workplaces.

Income contributes to 50%. Article. 51 Paragraph 6 of the Tax Code states that contribute to the formation of income to the extent of 50% of their amount:

- "The allowances and increases in pay due to workers bound by contract to carry out work activities in different places and ever-changing, even if paid with continuity;

- Allowances navigation and flight provided by law or by collective agreement;

- As well as the allowances payable to bailiffs.

By decree of the Minister of Finance, in consultation with the Minister of Labour and Social Security, can be identified categories of workers and conditions of applicability of this provision.

Who are the transfer for. INPS with a message of 2008, the number 27271, has given important information for the identification of such transfer for workers are considered. The following elements are particularly important to identify the trasfertismo, which must be met simultaneously:

- Failure to indicate in the contract and / or letter of engagement of workplace understood as the place of performance of work and not that of employment (the latter, in fact, may not coincide with that of carrying out the work)

- Carrying out an occupation which requires the continuous mobility of the employee (ie the displacement is ordinary content of their work)

- The payment to the employee, in relation to the performance of work in different places and ever-changing, a bonus or increase in salary as a fixed amount that is not closely related to the transfer as given, without considering whether the employee has actually gone away and where you made the trip.

Transfer for freight haulers are not. A further intervention of the Revenue with a resolution, no. 56 of 2000, was excluded the digestibility of road hauliers to transfer for all precisely in consideration of the fact that the allowances paid to them do not have a continuous (ie ie paid for all days of paid leave), but only compete for days of actual transfer.

For the purposes of taxation are irrelevant reasons for the choice of the contracting parties. By this is meant that it is irrelevant whether there has been the willingness of the parties to the contract, the employer and employee, to simplify the method of calculation of the salary, given the continuous departure for posting the worker, or if the choice depends on whether the worker is not a place of work determined, because it is subject to constant movement. You do not need the same premise of the trip and the need to determine whether or not the shift exceeds the limits of the municipality.

 

The deductibility of expenses for the enterprise

In addition to the tax provisions relating to possible exemptions from the employment income of the workers sent away, there is a tax break for the company that also bear the costs related to the performance of work away, that reimbursements for expenses incurred by employees sent in the new workplace.

Deductibility of food, accommodation. And 'in fact provided the deduction from the business income of the bottom of the list reimbursements paid to employees. To regulate this facility is art. 95 of the Tax Code. As for the board and lodging (obviously related to transfers carried out by the municipality), there is a daily limit for such expenses. And 'the deductible amount of 180,76 euro per day for these expenses. In the case of travel abroad this deductibility is high at 258.23 Euros. The amounts, we repeat, refer to daily allowances.

Refund necessary analytical. An important clarification of the Ministry of Finance states that the deductible limit refers to refund analytical. Are excluded then the lump-sum basis or mixed. So the company opting economically between the different systems of reimbursement must also take into account the deductibility of only refund analytical, which as we have seen involves the compilation of a detailed expense reports by employees with all supporting documentation attached.

Deduction only for the actual days of accommodation. Regarding the reimbursement analytical, and in any case with regard to accommodation provided free of charge by the employer for the purposes of determining the deduction accruing daily, account should be taken of the specific costs of the accommodation itself, which are deductible only for the days of actual transfer made during the year and are not deductible for days not in use.

Deductibility of travel and transportation. In addition to room and board are among the expenses deductible from business income also the cost of travel and transportation incurred by employees sent on the road. In the event of use by an employee of a motor vehicle owned by him, the deductibility of repayments is limited to the part corresponding to the cost of driving of automobiles of a power not exceeding 17 fiscal horsepower or 20 horsepower in the case of vehicles with engine diesel.

Documents to be enclosed. With regard to the documentation of repayment you can use either the receipt or "speaking", both the receipt integrated. And 'necessary that these documents are summarized in an expense report to get all the documentary evidence of incurrence of inherence and the cost incurred. In the case of expense in fact, any defects header or other irregularities formal integration of tickets and receipts are not relevant.

As for the trips made by public transport, with regard to the costs of room and board, for the purposes of deduction of income, it is no longer necessary that the documents relating to such expenses are payable to employees, it is sufficient that they both incurred in time and in places where the transfer took place and that they are certified by the employee through the summary.

 

01/02/2012

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Source:

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