What will happen to corporate welfare? As we told you in recent months, the 2024 Budget Law has also increased the tax exemption threshold for this year and expanded the spending possibilities for fringe benefits, that is, that set of income support for male and female workers which provides specific tax benefits for the companies that provide them. Specifically, for the current year the tax exemption threshold of fringe it was in fact increased to 2,000 and 1,000 euros based on the presence or absence of dependent children, while among the new usage items there are bills, rents and mortgages in derogation of the provisions of current legislation (art. 51 TUIR). However, once again, it is one transitional rule valid only for the current year.
Furthermore, the Revenue Agency recently intervened with a clarification which specifies that companies that want to provide welfare can also invest in terms of sustainable mobility. Based on a Response given to a company, the Agency has established that a series of measures affecting the employee home-work travel – carried out through tools linked to sustainable mobility made available via an app – can in fact enjoy tax benefits and be included in the welfare plans promoted by companies.
Although they are innovations that aim to expand the possibilities for companies to maneuver in the welfare sector, these continuous and temporary changes in legislation they risk being a serious problem for many organizations that have instead need for stability regulatory to be able to plan your activities. Because of this we interviewed some experts of this matter to try to understand what the Legislator might intend to do in the near future and what new developments await corporate welfare. Under the magnifying glass there is above all the Tax Reform which should take shape in the coming months.
The centrality of corporate welfare for the Legislator
Gianpaolo Sbaragliaassociate Studio e-IUS Tax&Legal, is confident in saying that corporate welfare represents a key issue for the Legislator. “It has certainly registered in recent years a change of direction by the Legislator who gave a lot of attention to corporate welfare and fringe benefits“, explains, “which have become important tools for supporting the purchasing power of employees, especially with the increase in inflation”.
Sbaraglia recalled some of the latest measures in this sense: “in 2023 it reached 3,000 euros for employees who have dependent children. In 2024, however, the threshold has increased to 1,000 for those without children and 2,000 for those with dependent children. Furthermore, the exemption no longer only concerns goods and services but also bills, mortgages and rent on your first home. The Legislator is moving in the direction of implementing income support policies for employees through tax and contribution leveraging, trying to provide concrete help also for complex situations linked to the increase in the cost of living”.
Corporate welfare, the debate must go beyond fringe benefits
In this sense, the Tax Reform will probably bring concrete innovations to the legislation on corporate welfare and give new long-term opportunities to businesses and social partners. “There Enabling Law has a clear objective: to reorganize employee income and their determination criteria through the simplification of the exemption thresholds reserved for welfare and fringe benefits. This is done by safeguarding and developing five possibilities from a welfare perspective: sustainable mobility, energy efficiency, social solidarity, bilateralism, supplementary healthcare and complementary pensions“, recalls Sbaraglia.
The role of corporate welfare in Tax Reform
As we told you last year, the Enabling law on Tax Reform clarifies – within article 5 – that the legislation on corporate welfare will be expanded and strengthened. The first drafts of the implementing decrees of the Law which are circulating among professionals at the moment do not appear particularly clear on this point.
This explains it Diego Pacielloresponsible for the tax, welfare, compensation & benefits area of the Studio Toffoletto De Luca Tamajo and Associates. “In the first versions of the Enabling Law on Tax Reform there is talk of a possible limit to tax favor for company welfare quotas for those with a gross income of 80,000 euros, the same as for performance bonuses, with welfare amounts exceeding 2,000 euros. But these are only preliminary versions which are destined to change”.
“I believe there will be some interventions relating to article 51 of the TUIR”, continues Paciello. “But I don’t think there will be an upheaval. The objective of the Legislator is in fact to give new opportunities to companies that invest in welfarewidening the room for maneuver with regards to social security, healthcare and sustainable mobility. It will therefore be an expansive intervention”.
According to Paciello, we have reached a point where welfare has become essential for many companies and the Legislator must move accordingly. “Today it is clear that welfare is a strategic tool for businesses, especially from a retention and attraction perspective. Welfare no longer has just solidarity purposes but is an opportunity to attract and retain people in the company, at lower costs than those of the monetary component of the salary. This is a need felt by many companies; there are more and more companies – even large and famous ones that guarantee salaries and benefits of considerable value – that are struggling to find qualified people”. In this sense “welfare is increasingly appreciated and present in organizations because it leverages well-being in all its forms: from healthcare to the gym, from work-life balance to services, up to free time. It offers possibilities for everyone, regardless of age or personal and family situation”.
Will there be opportunities to enhance “noble” welfare?
In some ways though this variety of services and benefits which all fall within the legislation risks generating further confusion. Although it is true that today many organizations can no longer do without these tools, the fact of encompassing so many things under the concept of welfare is a risk. For example, talk about welfare and fringe benefits is not the same thing. And the Legislator should also take this into account in view of large-scale interventions on the legislation. As we have often pointed out, frequently the fringe they become a form of “compensation” for pay rather than an opportunity to access social, welfare or care services.
This is not corporate welfare: a reflection on fringe benefits at 3,000 euros
He also supports it Jorge Torre, responsible for social bargaining and relations with contractual welfare at CGIL Nazionale. According to Torre, “this excessive valorization of fringe benefitsoften called ‘corporate welfare’ by the legislator himself, is creating cultural damage because it pushes us to think of welfare as a purely monetary element. Today many workers think that welfare is only shopping vouchers and shopping vouchers”. This, however, is “a reductive vision, even if it is understandable: in recent years we have only talked about these tools and not about the “noble” tools that can give concrete answers to people’s social needs. Because of this I believe that they are mainly used due to the tax advantages“.
“From my point of view, when we talk about corporate welfare we must talk about agreed and shared tools, capable of generating social impact. For this it is necessary to find new ways to create synergies with the local service system. When we talk about welfare we talk about assistance, care, healthcare, social security. To give the right importance to these issues we must enhance the relationship between integrative welfare and universal public welfare”.
In this direction the keystone is work on the territory. Alone building collaborative networks and systems at local levelcapable of involving welfare systems and social partners, it will really be possible enhance the social component of corporate welfare (to know more). “Now though Clarity is needed from a regulatory and, above all, political point of view”, concludes Torre. “The Government must be clear and must deal with the social partners, because only by talking with those who work in the field every day can we really understand how things work”.
Now all that remains is to see whether the Tax Reform will be concretely the subject of discussion on the subject of corporate welfare and, above all, what will be the issues that the Legislator will take into consideration in the development of the new legislation on the subject.
