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New rules on business trips: national delimitation of the traceability requirement for deductibility of expenses

published on 4 July 2025 | reading time approx. 3 minutes

The Council of Ministers, on June 12, 2025, approved a new Decree-Law containing urgent measures and simplification provisions in tax matters (the so-called "DL Fiscale" or “Tax Decree”), introducing, among other things, modifications to the traceability requirements for reimbursed expenses.

Among the most significant measures of the Tax Decree, it is worth noting the introduction of a territorial distinction in the application of the traceability requirement for travel expense payments, for the purpose of deducting expenses incurred for business trips by both employees and self-employed workers.

The 2025 Budget Law (article 1, paragraphs 81–83 of Law n. 207/2024) introduced the obligation to exclusively use traceable payment instruments in order to benefit from:

the exclusion of expense reimbursements from the taxable income of the employee;
the deductibility of expenses incurred by the company.

However, the lack of distinction between expenses incurred in Italy and those abroad had given rise to practical issues, particularly in foreign contexts where the use of alternatives to cash is uncommon or impractical.

These circumstances penalized both employees, who had reimbursements for expenses paid in cash subjected to taxation, and companies, which were denied the deductibility of such actually incurred costs.

The new decree intervenes by overcoming the previously adopted uniform approach, introducing a geographical distinction consistent with the anti-evasion objectives of the regulation. In particular, it is clarified that the traceability requirement for payments applies exclusively to expenses incurred within the territory of the Italian State.

This amendment was implemented through targeted interventions in the three relevant articles of the TUIR:

Article 51, paragraph 5: The Legislative Decree introduces in the article concerning the determination of income from employment the phrase “within the territory of the State”, limiting the geographical scope of the traceability requirement to reimbursements related only to expenses incurred in Italy;
Article 95, paragraph 3-bis: The phrase “within the territory of the State” is also introduced in the context of the deductibility by the employer of expenses incurred for services provided by employees and self-employed workers, thereby restricting the application of the traceability requirement for expenses to the national territory;
Article 109: A specific provision is introduced for expenses related to meals, accommodation, travel, and transportation (including those made using non-scheduled public transport services, pursuant to Law 15/1992 n. 21), establishing that deductibility is conditional upon traceability only if such expenses are incurred in Italy. Furthermore, paragraph 5-ter extends the same criterion to services provided by self-employed workers, thereby standardizing the tax treatment.

The new provisions apply retroactively from January 1, 2025. This allows for tax settlements related to the first six months of the year. In particular, the new measures entail, on one hand, a reduction of taxes for employees and, on the other hand, increased deductibility for companies of costs incurred for employees on assignment abroad during the first half of the year, even in the absence of traceable payment instruments.

The legislative intervention represents an important step towards greater consistency between anti-evasion objectives and business activities, providing a concrete solution to the practical difficulties encountered by companies and employees operating in an international context.

Companies will need to carefully assess the impact of the new provisions on their management processes for business trips and expense reimbursements, including the possibility of accounting and tax adjustments for the prior period.