Expense Report and Business Travel Management: Complete 2026 Guide

1. What an expense report is and how it works

An expense report is the document in which an employee or collaborator reports to the company the expenses incurred for work and asks for reimbursement. Each line describes one expense: date, place, amount, type, reason. Each line is linked to a supporting document, that is the till receipt, receipt or invoice that proves the expense. In companies that use company cards the expense report is needed even when there is no reimbursement, because it is where the transaction is linked to the document and to the reason.

Expense report, reimbursement and business trip: three different things

• Business trip: the worker's temporary move away from their usual place of work. If the move is permanent it is called a transfer, which has different rules.
• Expense reimbursement: the sum the company pays back for expenses advanced by the worker. It can be itemised (actual costs), flat-rate (daily allowance) or mixed.
• Expense report: the document that collects expenses and supporting documents and goes through approval. It is the basis for the reimbursement and for the accounting entries.

The distinction matters because the tax treatment depends on the business trip (within or outside the municipality of the workplace, in Italy or abroad) and on the reimbursement system chosen, not on the form used to fill in the report.

Which expenses go into an expense report

The recurring categories are meals, accommodation, trains and planes, taxis and NCC, car hire, fuel, tolls, parking, mileage reimbursement for the employee's own car, tourist tax, and small expenses such as phone, laundry and tips. Each has its own tax rule, covered in sections 3 and 4: for example, the tourist tax follows the accommodation and must be paid by traceable means, whereas a train ticket does not.

An example of a completed expense report

The last row is the case to avoid: a meal paid for in cash in Italy is not forbidden, but the reimbursement becomes income for the employee and the cost is not deductible. To find out more about streamlining the process, read how to simplify expense reports for employees and administration.

2. The business trip process: before, during, after and in administration

A well-managed business trip is a single process, not four offices passing sheets of paper to one another. Each phase produces data that the next phase needs: if the request states the cost centre, nobody will have to ask for it at the time of accounting.

Worth keeping at hand: the printable checklist and template (PDF, 4 pages) (PDF, in Italian) goes through the four phases with the things to check in each, the rules on traceability and daily allowance, and two templates to fill in: the business trip request and the expense report.

Before departure

The business trip request sets the conditions: where the employee is going, for how many days, and with which reimbursement system. The reimbursement system must be chosen for the whole trip: Circular 15/E/2025 reminds us that different criteria cannot be applied to different days of the same trip.

During the trip

This is where almost all of the tax treatment is decided. A taxi paid in cash in Rome cannot be put right in administration. The employee needs to know beforehand, not on returning, which expenses must be paid by card. Recording expenses during the trip, with a photo of the document taken as soon as it is received, reduces lost supporting documents and reconstructions from memory.

After returning

The expense report goes to the manager, who approves or rejects it. The travel policy rules should already have been applied at the time of recording: the manager is left with the exceptions, not with a line-by-line check.

In administration

Administration calculates what is exempt and what is not, pays out the reimbursement, allocates expenses to accounts and cost centres, separates those to be re-charged to clients and starts the preservation of the documents. With hybrid work, less straightforward cases arise, such as the employee who alternates between the office, home and client sites: they are covered in the article on mixed business trips and hybrid work (in Italian). For the organisation of travel, see also how to organise and monitor business trips.

3. 2026 rules: traceability, deductibility and taxation for the employee

This section summarises the rules for employees and equivalent workers and for deduction from business income. Self-employed workers have their own rules, covered in Circular 15/E/2025 at paragraph 3. For specific cases, always check with your own adviser.

What has changed since 1 January 2025

Three provisions, one after the other:

1. Law of 30 December 2024, No. 207 (2025 Budget Law), Article 1, paragraphs 81-83. It added to Article 51(5) of the TUIR the condition of traceable payment for reimbursements of meals, accommodation, travel and transport made with “non-scheduled public road transport services” (Law 21/1992), that is taxis and NCC: among transport services, only these. It inserted paragraph 3-bis into Article 95 for the deduction from business income and extended the condition to entertainment expenses (Article 108). It applies from 1 January 2025.
2. Legislative Decree of 13 December 2024, No. 192 (D.Lgs. 192/2024). For business trips within the municipality of the workplace, it made travel and transport reimbursements “proven and documented” exempt, overriding the requirement for documents issued by the carrier. It applies to reimbursements from 1 January 2025.
3. Decree-Law of 17 June 2025, No. 84 (D.L. 84/2025), converted by Law of 30 July 2025, No. 108. It limited the traceability requirement to expenses incurred in the territory of the State, with effect from 1 January 2025.

The Italian Revenue Agency (Agenzia delle Entrate) issued operational guidance in Circular No. 15/E of 22 December 2025. At the date of this update there are no later circulars on the same subject. The webinar Traceability requirement for business trip expenses (in Italian) (recorded in 2025, 55 minutes) explains how the expense report has changed since the 2025 Budget Law.

Which expenses must be paid by traceable means

It applies to all business trips, within and outside the municipality, and to all reimbursement systems: flat-rate, mixed and itemised. The requirement also applies to those who use the daily allowance, because in that system taxis and NCC are reimbursed separately.

How to show that the payment is traceable

The rule refers to payment by bank or postal transfer and to the instruments of Article 23 of Legislative Decree 241/1997 (from 1 January 2026, see Article 14 of Legislative Decree 33/2025): debit, credit and prepaid cards, cheques and other payment systems. Circular 15/E gives as examples the debit or credit card receipt, a copy of the postal payment slip (bollettino) or MAV payment slip, the PagoPA receipt and the bank statement. The bank statement, however, is residual evidence, to be used only if there is no other. If the employee hands it in, they must black out the transactions unrelated to the business trip.

Payments made through apps of electronic money institutions linked to a current account are also traceable. For these, the tax document for the expense and proof of payment are required; the latter may be the platform's confirmation email.

Note: proof of payment and the supporting document for the expense are two different documents. The card receipt tells you how much you paid and when. The merchant's document tells you what you bought. For a taxi without an invoice, AdE Ruling No. 142/2024 takes the view that the POS slip alone does not seem sufficient to deduct the cost: a supporting document from the provider is also needed, with date, provider's name, route and fee.

If the employee pays in cash

Paying in cash is not forbidden, but for expenses incurred in Italy it has two consequences. The reimbursement of meals, accommodation, taxis or NCC counts as employment income and is taxed through the payslip. The company cannot deduct that cost. In Ruling No. 302 of 4 December 2025 the Italian Revenue Agency applied this to the case of a taxi paid in cash in Italy: the reimbursement is income. The case concerned a State administration, but the rule applied is that of Article 51(5), which is valid for all employers.

Business trips in Italy and abroad

After Decree-Law 84/2025, no traceable payment is required for meals, accommodation, taxis and NCC incurred abroad: the reimbursement remains exempt and the expense remains deductible within the ordinary limits. The stated reason is practical: in some countries traceable payment instruments are not widely used. One difference to remember: for the company's entertainment expenses traceability is needed even when they are incurred abroad, because the rule concerning them (Article 108 TUIR) does not have the limitation to the territory of the State. Daily allowance, currency conversion, documents and foreign VAT are compared in the in-depth article business trips in Italy and abroad: daily allowance, currency, documents and VAT compared (in Italian).

Business trips within and outside the municipality

Outside the municipality of the workplace, the three reimbursement systems of section 4 apply. Within the municipality the rule is stricter: allowances and reimbursements count as income, except for proven and documented travel and transport reimbursements. Since 2025 it is enough for them to be documented, even without documents from the carrier. It follows that, according to Circular 15/E, mileage reimbursement for the use of one's own car within the municipality is also exempt, if it is calculated on the ACI tables and documented. Documented tolls and parking are exempt both within and outside the municipality.

Deductibility for the company

• Meals and accommodation outside the municipality: deductible up to €180.76 per day in Italy and €258.23 abroad (Article 95(3) TUIR).
• Meals and accommodation within the municipality: deductible at 75%, as Circular 15/E reminds us, referring back to Circular 6/E/2009.
• Own or hired car authorised for a business trip: the deduction is limited to the mileage cost or the hire rates of a vehicle of up to 17 fiscal horsepower, 20 if diesel (Article 95(3)).
• Traceability condition: for meals, accommodation, taxis and NCC incurred in Italy, the deduction requires traceable payment (Article 95(3-bis) and Article 109(5-bis) and (5-ter) TUIR). The rules also apply for the purposes of the regional business tax (IRAP).
• Entertainment expenses: deductible only if paid by traceable means, in Italy and abroad (Article 108(2) TUIR).

The general requirements of relevance to the business, accrual and reasonableness remain unchanged. In-depth articles: traceability requirement for business trip expenses (in Italian) and deductibility of business trip expenses (in Italian). Both articles were updated on 21 October 2026 with the rules in force, including the exclusion of expenses abroad.

4. Itemised, flat-rate and mixed reimbursement, and the daily allowance

For business trips outside the municipality, Article 51(5) of the TUIR provides for three alternative systems. The system is chosen for the whole trip.

The daily allowance and its thresholds

The law does not set how much to pay as a daily allowance: it sets up to what daily amount the allowance does not count as income. The part above the threshold is employment income. If meals or accommodation are reimbursed separately, or provided free of charge, the threshold is reduced.

The full thresholds are those of Article 51(5) TUIR. The reduced amounts are calculated by applying the statutory reductions and rounding to the cent.

Three examples

Which system to choose

Itemised is the most precise and the most burdensome to manage: every expense has a document and a check. Flat-rate is simple for the traveller, but taxes the part of the allowance above the threshold; if reimbursements of other expenses, such as phone or laundry, are added to the allowance, those are taxed in full too. If, on the other hand, meals or accommodation are also reimbursed, the trip moves to the mixed system, with the reduced thresholds. Mixed is useful when accommodation has to be booked and paid for anyway. Whichever system is adopted, it applies to the whole trip. To find out more see how business trip expenses are reimbursed (in Italian) and, for employees who alternate between sites and clients, mixed business trips and hybrid work (in Italian).

5. Mileage reimbursement and ACI tables

When employees use their own car for work, the company can grant a mileage allowance. According to the practice of the Revenue Agency, referred to in Circular 15/E (Resolution 92/E of 30 October 2015), the reimbursement is exempt if it is calculated on the ACI tables (the running-cost tables of the Automobile Club d'Italia) taking into account the distance travelled, the type of car used and the cost per kilometre of that model, and if these elements appear in the documentation kept by the company. The step-by-step calculation, with the cost per kilometre of a few vehicles read from the 2026 tables and two examples, is in the in-depth article on mileage reimbursement with the 2026 ACI tables (in Italian).

Which tables to use in 2026

Every year ACI draws up the tables of running costs per kilometre and the Ministry of Economy and Finance publishes them by 31 December, with effect from the following year. The tables for 2026 were published in the Official Gazette (Gazzetta Ufficiale) No. 297 of 23 December 2025, ordinary supplement No. 40 (notice 25A06822). The values change by model and fuel type and the tables have more than 5,000 rows: for this reason we do not reproduce them all here. An example of how to read them, with six vehicles and two calculations, is in the in-depth article on mileage reimbursement with the 2026 ACI tables (in Italian).

What to keep for each reimbursement

• Date and reason for the business trip
• Route: departure, destination, any stops
• Kilometres travelled
• Vehicle: make, model, fuel type
• Cost per kilometre applied and reference ACI table
• Authorisation to use one's own car
• Tolls and parking, with the relevant documents

Three points that cause errors

Within the municipality: since 2025, mileage reimbursement calculated on ACI and documented is exempt even within the municipality of the workplace. Traceability: it does not apply to mileage: according to Circular 15/E it is a reimbursement that compensates the costs incurred to use one's own vehicle, excluded from the requirement like tickets for trains, planes, buses and ships. Company car: those who use a company car do not normally receive mileage; the value of the car granted to the employee follows another rule, that of fringe benefits (Article 51(4)(a), TUIR), which uses the same tables published in the Official Gazette. For the company, the deduction of the reimbursement is limited to the mileage cost of a car of up to 17 fiscal horsepower, 20 if diesel.

6. Digital expense reports: dematerialisation and preservation

Photographing a receipt is not enough to get rid of the original. Two conditions are needed: a digital process that guarantees the immutability, integrity and authenticity of the document, and preservation completed according to the rules. On these conditions the Revenue Agency has confirmed several times that paper can be destroyed.

What Ruling No. 142 of 24 June 2024 says

A company described this process: photo of the supporting document taken with an app on the company smartphone, automatic reading of the data with OCR, an expense report made up of digital records with the image of the document, authenticated access, activity log, automatic checks for inconsistencies and double submissions, manager approval, transmission to a preservation provider. The Agency replied that, if immutability, integrity and authenticity are guaranteed, there is nothing to prevent the process. Verifying these characteristics, however, remains a factual check, which the advance ruling procedure does not carry out.

Unique and non-unique originals

• Non-unique original: a document whose content is found in other mandatory records, including those of third parties. This is the typical case of business trip supporting documents, which are matched by the accounts of whoever sold the service. After digital preservation the original can be destroyed, without the need for a public official (Ministerial Decree of 17 June 2014, Articles 3 and 4).
• Unique original: a document whose content cannot be reconstructed elsewhere. For its substitutive digital preservation the intervention of a public official is required (Article 4(2) of the same decree).

The taxi case

The taxi driver issues an invoice if the customer asks for one. Since 1 January 2024, if an invoice is requested, it must be issued in electronic format through the Exchange System (Sistema di Interscambio). If an invoice is not requested, the POS receipt alone is not enough to deduct the cost: the driver's supporting document with date, name, route and amount is also needed. Both documents are non-unique originals and can be preserved in digital form.

The history of this topic, from Resolution 96/E of 2017 to the 2024 ruling, is reconstructed in the in-depth article on the dematerialisation of expense reports and Ruling 142/2024 (in Italian).

7. Travel policy: what it must contain

The travel policy translates the company's choices on business travel into rules that anyone can apply: who authorises, what can be spent, how to pay, what to document, by when to submit the report. It is different from the approval workflow. The policy says what is allowed; the workflow says who decides when something is not.

Checklist: the items of a travel policy

• Who can go on a business trip and who authorises it
• Reimbursement system: itemised, flat-rate or mixed
• Amount of the daily allowance, if provided
• Allowed and non-allowed expense categories
• Caps by category, by role and by destination
• Hotels: category, cap per night, cities with a different cap
• Meals: cap per meal or per day
• Trains and flights: travel class, advance booking
• Taxis and NCC: when they are allowed, card requirement
• Own car: authorisation and mileage calculation
• Company car and hire: rules of use
• Payment methods: company card, personal card, cash
• Advances: when they are granted and how they are settled
• Business trips abroad: currencies, exchange rate, different rules
• Supporting documents required for each type of expense
• Deadlines: within how many days the expense report is submitted
• Exceptions: who approves them and how they are justified
• Expenses to be re-charged to clients
• Personal expenses incurred by mistake: how they are repaid
• Roles and responsibilities: employee, manager, administration

An example of a well-written rule

“Hotels in Italy: maximum €130 per night, €170 in Milan and Rome. Payment by company card. Above the cap the expense is allowed only with the manager's approval before booking.” (Example amounts, to be adapted.)

A rule like this can be checked automatically. “A hotel of suitable category” cannot. In-depth article: travel policy: what it must contain and why it is needed (in Italian).

8. Company cards and reconciliation

Company cards reduce the cash advances made by the employee and make proof of traceable payment simpler. They do not replace the supporting document: the transaction tells you how much and where, the document tells you what.

Reconciliation: linking transaction and supporting document

Reconciling means matching each card movement with an expense in the report, with its document and its reason. Done by hand at the end of the month, it takes time and slows down the closing of reports. Done automatically, it leaves administration only with the transactions without a document and those outside policy.

Checks before the expense

On some cards the limits already apply at the time of payment: caps, excluded merchant categories, online use, permitted countries. This is a different check from the one in the expense report, which comes afterwards. How prepaid cards and apps change the expense report for travellers and for administration: simplifying expense reports with apps and cards.

9. Digitisation, OCR and artificial intelligence

Digitising the expense report does not mean replacing the Excel sheet with an online form. It means that each piece of data is entered once and travels all the way to the accounts without being re-keyed.

What each technology does

• OCR: reads the date, amount, location, currency and VAT number from the photo, and pre-fills the expense.
• Expense type: set by the person or, where the company has provided for it, by the QR code indicated on the product page.
• Consistency checks: flag the same supporting document uploaded twice, dates or amounts that do not add up, and unreadable photos.
• Policy check: compares the expense with the employee's caps and rules and blocks or flags it.
• Reconciliation: matches card transactions and expenses.

What is left to people

The system flags, people decide. Approving an out-of-policy expense, assessing a doubtful case and the tax classification of an unusual business trip remain the responsibility of whoever signs. The process described in Ruling 142/2024 provides for this: automatic checks come before, and do not replace, the manager's verification. A concrete example of an app with automatic reading of receipts is described on the page app for expense reports and business travel. How it reads the receipt, where it gets it wrong and how to check it is covered in the in-depth article OCR and AI for expense reports: from photo to expense (in Italian).

10. Measuring the process: time, cost, experience

An expense report process is judged by a few numbers, measured in the same way every month.

Reimbursement time is also an indicator of experience: for frequent travellers, advancing money and waiting a long time for reimbursement is a real cost. To set up checks across the whole cycle see how to organise and monitor business trips.

11. How to choose software for expense reports and business travel

Start from the process, not from the list of features. A company with ten people who travel twice a year may be fine with a simple app. With several companies, several currencies, company cards and an elaborate travel policy, a system that covers the whole cycle is needed.

Fifteen questions to ask every vendor

1. How is an expense recorded from a smartphone, even without a connection?
2. What data does it read automatically from the document?
3. Does it flag duplicate supporting documents and unreadable photos?
4. Can policies be defined by role, person and destination, with a block or a warning?
5. Does it handle daily allowance, mixed and itemised reimbursement, and calculate the exempt portion?
6. Does it calculate mileage reimbursement and at what rates?
7. Does it distinguish expenses paid by traceable means from those paid in cash?
8. Does it handle the business trip request and approval before departure?
9. Does it support multiple currencies, and with which exchange rate?
10. Does it integrate with company cards and reconcile transactions?
11. What exports does it prepare for payroll and accounting?
12. Does it separate expenses to be re-charged to clients?
13. Does it include compliant digital preservation? Who is the preservation provider and who is the person responsible for preservation?
14. How is access managed (SSO, permissions) and what certifications does the vendor hold?
15. Who configures expense types and rules: the company on its own or the vendor?

A printable checklist with the main questions is on the page how to choose expense report software. The features to check and the selection criteria, one by one, are in the in-depth article expense report software: features to check and selection criteria (in Italian).

13. Frequently asked questions