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Editor in chief: Angelo Scorza
06/11/17 10:08

The benefits of corporate welfare plans

Studio TCL also analyzes new rules regarding the proposed new taxation on works of art included in the bill of the Budget Law for 2018

Taxation of works of art

The bill of the Budget Law for 2018 contains new laws regarding the taxation of works of art, although the first draft of this bill has already undergone several revisions and, according to recent rumors, it seems that to date there is no longer any track of the proposed taxation on works of art.

In wait of the definitive text of the law, we provide below a brief description of the provisions contained in the draft of the budget law.

The capital gains deriving from the sale of art works, antiques and art collection made by private individuals - which until now were included in category of different income (article 67 of the TUIR), provided they derive from activities not carried out on regular basis - could be subject to taxation based on two alternatives methods:

- by an analytic method, which imposes on taxation the "difference between the consideration received in the tax period and the costs"; or

- by a fixed method, with IRPEF applying on 40% of the sale price.

The new tax regime should apply not only on capital gains realized from January 1, 2018, but also stretch its effects on tax periods for which a tax assessment is still possible, that is to say the five previous years. This retroactive effect would make the rule even more rigid for private collectors, leading to the risk of a real "art flight" from our country.

Fabrizio Moscatelli

Chiara Vurruso

PKF - Studio TCL Tax Consulting Legal  –

Genoa  –  Milano

Company welfare plans

"Business welfare" means a set of benefits granted to workers as an alternative to an increase in their salary, in order to improve their personal life and the one of their family.

It can also be termed as "second welfare", because these benefits go hand in hand with the traditional "public welfare" forms (which guarantee coverage in case of illness, unemployment, disability), allowing companies to implement interventions that in a certain sense make up for stately shortcomings.

Business welfare is thus achieved through an agreement between the worker and the employer, aimed both at achieving certain business performance goals and, at the same time, individual goals.

The Stability Law for 2016, and later on the Stability Law for 2017, have included the launch of corporate welfare plans, which have led to the granting of productivity awards related to the company performance; as well as, to the expansion of the services benefiting the worker and contained in article 51 of the TUIR. These beneficial services include education, recreation, social and health services, including related services to support school expenditure by means of books vouchers, scholarships, canteen access,  recreational clubs, summer and winter camps; nurseries services for the infancy and elderlies or with handicaps; commercial relief, such as meal and expense vouchers.

Employees’ access to various benefits, related to company welfare projects, depends on their achieving certain business and individual performance goals in relation to which a "welfare credit" is allocated to the company, i.e. a virtual spending budget totally incurred by the employer and not refundable. A customizable web platform enables each employee to enjoy, depending on their needs, a set of benefits, provided that, in case of non-use, the assigned budget is not converted into cash and redeemed to the employee.

Benefits of company welfare plans, beyond the increase of company productivity and employee well-being with positive repercussions on private and professional life, are also considerable both for the company and the employee: for example, in front of € 100 recognized to the employee in goods and services, the cost for the company is € 100, and also for the employee. The "great" difference is instantly obvious. The grant to a productivity awards (partially untaxed for the employee), involves a higher cost for the company (€ 100 + grants) and a minor "net" available to the employee (€ 100 – withholding taxes).

Unfortunately, there is still a low spread of company welfare plans, probably related to a low knowledge of economic benefits as well as the extreme mistrust of employees towards the plans. Therefore, confronting the alternative to receive an increase in salary wage or rather a business welfare, in most cases the workers chooses for the first option.


Barbara Pollicina

Chiara Vurruso

PKF - Studio TCL Tax Consulting Legal  –

Genoa  –  Milano



TAG : Tax corner