What services do regal assets provide

What is Corporate Welfare?

Corporate welfare includes

a series of services, benefits and sums that the employer grants to its employees with the aim of increasing the well-being of workers and their family environment.

A corporate welfare plan is implemented by giving a salary increase not in money but in the form of untaxed benefits (defined as flexible benefits) for workers and their families. Shopping vouchers, petrol vouchers, prizes and gifts, experiences…. There can be many rewards, concessions, services and benefits that a company can include in its welfare plan, which can be categorized as follows:

  • Integrative Healthcare
  • Provision of food
  • Collective transport services
  • Public transport services
  • Charges of social utility
  • Education and instruction services
  • Support services
  • Benefits for the risk of non self-sufficiency
  • Supplementary pension
  • Health costs
  • Each company decides which services to offer and how, drawing up its own welfare plan.
  • In the rest of our article we illustrate the various methods in more detail.

Who can take advantage of the Company Welfare plan

The beneficiaries of a corporate welfare plan are employees who work in public or private companies (in reality, with the approval of the Jobs Act of self-employment in 2017, some benefits can also be extended to self-employed workers and professionals with a VAT number
). One of the main characteristics of the benefits included in a welfare plan is that they are bonuses which, while increasing the value of the salary, do not form the taxable income and are therefore not taxable. This condition is allowed only when the benefits, linked to company welfare, are granted to all employees or to well-identified categories of employees, thus excluding the ad personam bonus, ie for a single person.

In this regard, the Revenue Agency, in question no. 273/2019 clarified that

the expression “categories of employees”, used by the legislator, should not be understood only with reference to the categories provided for in the civil code (managers, workers, etc.), but to all employees of a certain type (for example, all employees of a certain level or of a certain qualification, ie all the night shift workers, etc.), or to a homogeneous group of employees, even if some of these do not actually benefit from the foreseen “utilities”.

Some examples of employee categories could be:

  • employees residing in the same location;
  • employees who have an identical classification (for example all employees);
  • employees who have the same contractual level (for example all third-level trade);
  • employees who have children.
  • Family members who can benefit from Welfare

Some welfare services can also be used by the worker’s family members. These can be:

  • the spouse, even separated but not legally (including partners from civil unions);
  • children, including recognized biological children, adopted children and foster children or affiliates;
  • the parents and, in their absence, the next ascendants;
  • the adopters;
  • genders and daughters-in-law;
  • father-in-law and mother-in-law;
  • full or one-sided brothers and sisters.

How Corporate Welfare was born

The issue of corporate welfare is constantly evolving with respect to regulatory updates: it was introduced in Italy in 1986 when Presidential Decree 917 was approved, which established what is now called TUIR (Consolidated Income Tax)
). Over time, the text has undergone major changes, but from the very beginning it has dealt with regulating the payments that complement the remuneration: fringe benefits and flexible benefits.

To date, Article 51 – Determination of employment income – and Article 100 – Charges of social utility – of the TUIR form the basis of Italian corporate welfare, supplemented each year by the Stability Law approved by the Government.