Itemized Expense Reimbursements and the Flat-Rate Tax Regime: Confirmation from the Italian Revenue Agency

In a previous article, focusing on itemized expense reimbursements under the Italian flat-rate tax regime (regime forfettario) and the responses issued by the Regional Directorates of the Italian Revenue Agency (Agenzia delle Entrate), we concluded that the interpretation favorable to taxpayers under the flat-rate regime was legally supportable, but not yet sufficiently reliable as a basis for practical application, given the absence of an official position from the Italian Revenue Agency at central level.

That position has now been provided through Ruling Response No. 213/2026, which confirms the interpretation adopted by the Regional Directorates and clarifies the conditions for its application.

To understand the significance of this clarification, it is useful to briefly summarize the issue. As of 2025, Article 54, paragraph 2, letter b), of the Italian Income Tax Code (TUIR) provides that reimbursements of expenses incurred by professionals in carrying out an engagement, and charged to the client on an itemized basis, do not constitute taxable income. For professionals subject to the ordinary tax regime, this change is essentially tax-neutral, since previously the reimbursement was taxable while the corresponding expense was deductible. For taxpayers under the flat-rate regime, however, the difference is significant: these taxpayers cannot deduct actual expenses and calculate their taxable income by applying a profitability coefficient to the fees received. Consequently, a reimbursement classified as professional income is subject to taxation even though it merely represents the repayment of an expense advanced on behalf of the client. Furthermore, such reimbursements contribute to reaching the revenue thresholds established for remaining within the flat-rate regime. The uncertainty arose because the legislation governing the flat-rate regime (Law No. 190/2014) does not expressly refer to Article 54 of the TUIR and because, in the past, the Italian Revenue Agency had classified certain amounts recharged to clients as professional income, such as the stamp duty examined in Ruling Response No. 428/2022.

The new ruling addresses this uncertainty. It was issued by the Central Directorate in response to a request submitted by a journalist operating under the flat-rate tax regime who advances travel, meal and accommodation expenses in connection with her professional assignments, pays for them using her personal credit card and subsequently submits an itemized expense report, supported by the relevant documentation, to the commissioning company, obtaining full reimbursement. The Italian Revenue Agency confirms that, for expenses incurred from January 1, 2025, amounts received by professionals under the flat-rate regime as itemized expense reimbursements are no longer included among the professional fees to which the profitability coefficient applies. This leads to a second, equally important consequence: these reimbursements are also excluded from the calculation of the €85,000 and €100,000 revenue thresholds, exceeding which results in the loss of eligibility for the flat-rate regime, respectively from the following tax year or during the current tax year.

However, this exclusion is not automatic, as the ruling makes it subject to specific conditions. First, the expenses must be directly related to the professional engagement, and both the expenses and the corresponding reimbursements must be adequately and thoroughly documented. Furthermore, expenses for meals, accommodation, travel and transportation by taxi or chauffeur-driven car services incurred in Italy must be paid using traceable payment methods, such as bank transfers or payment cards. Otherwise, the reimbursement is treated as taxable professional income in all respects, pursuant to Article 54, paragraph 2-bis, of the TUIR, which the Italian Revenue Agency considers applicable also to taxpayers under the flat-rate regime. Finally, the effective date established by Legislative Decree No. 192/2024 remains unchanged, meaning that reimbursements relating to expenses incurred up to December 31, 2024, continue to be governed by the previous rules.

In addition to these conditions, it is important to consider the scope and limitations of the ruling, which the Italian Revenue Agency expressly confines to the specific circumstances examined and formulates “as a general rule.” The case concerned exclusively travel, meal and accommodation expenses reported through an itemized expense statement, and the ruling does not address how such reimbursements should be presented on invoices. In this respect, it therefore remains advisable to follow the criteria set out in Ruling Response No. 270/2025 for professionals under the ordinary tax regime, namely to indicate reimbursed expenses separately from professional fees and retain the relevant supporting documentation. It should also be noted that mileage reimbursements calculated on the basis of a standard rate are not considered itemized expense reimbursements under that ruling and therefore remain subject to taxation as professional income.

In conclusion, the interpretation favorable to taxpayers under the flat-rate regime has now received official confirmation at central level and can therefore be applied with greater certainty, provided that expense reporting, supporting documentation and payment methods comply with the requirements outlined above. For this reason, it is advisable to inform the professionals responsible of any invoices already issued in 2026 that include the expense reimbursements discussed in this article.