The Italian Revenue Agency has published a new circular clarifying the measures introduced by Legislative Decree no. 192 of 13 December 2024 and Law no. 207 of 30 December 2024 (the 2025 Budget Law). The circular provides operational instructions on the latest changes to tax rules and employment-related provisions.<\/p>\n\n\n\n
The 2025 Budget Law (sections 21 and 32) confirms and makes permanent the changes to personal income tax (IRPEF) introduced on a temporary basis for 2024 by Legislative Decree no. 216\/2023. Specifically:<\/p>\n\n\n\n
The number of income tax bands has been reduced from four to three.<\/p>\n\n\n\n
The new IRPEF rates are as follows:<\/strong><\/p>\n\n\n\n The Budget Law confirms and makes the \u20ac1,200 supplementary income benefit for employees (called trattamento integrativo<\/em>) a permanent feature of the tax system.<\/p>\n\n\n\n The mechanism by which employees earning up to \u20ac15,000 per year can qualify for the benefit has also been made permanent. Specifically, the benefit is granted if the gross income tax due (calculated on employment and equivalent income) exceeds the employee tax deduction, reduced by \u20ac75.<\/p>\n\n\n\n This \u20ac75 reduction is intended to prevent the recent increase in the employee tax allowance from unintentionally excluding eligible workers from receiving the benefit.<\/p>\n\n\n\n An additional non-taxable amount is granted to employees (excluding pensioners) with total annual income not exceeding \u20ac20,000.<\/p>\n\n\n\n The amount is calculated by applying a variable percentage to the actual employment income earned:<\/p>\n\n\n\n The calculation is based on notional annual income so as to ensure consistent treatment also for employees on contracts that are not continuous.<\/p>\n\n\n\n For employees whose total annual income falls between \u20ac20,000 and \u20ac40,000, an additional tax credit against gross tax liability has been introduced.<\/p>\n\n\n\n During the year-end reconciliation, withholding agents must verify employees\u2019 entitlement to the sums disbursed.<\/p>\n\n\n\n Any amounts paid in excess must be recovered in ten monthly instalments if they exceed \u20ac60, or in a single payment if employment has terminated.<\/p>\n\n\n\n Employees may still claim any sums not recognised by their employer when filing their annual tax return or, in the opposite situation, must repay any amounts unduly received.<\/p>\n\n\n\n The tax relief (i.e. the personal tax deduction) for dependent children applies only to children under the age of 30, unless the child has a certified disability. It does apply to adopted children, foster children and children of a deceased spouse living in the taxpayer\u2019s household.<\/p>\n\n\n\n The relief is shared between parents according to standard rules.<\/p>\n\n\n\n As regards other family members:<\/p>\n\n\n\n For the 2025, 2026 and 2027 tax years, the substitute tax rate on productivity bonuses has been reduced from 10% to 5%. <\/p>\n\n\n\n This applies to gross bonuses of up to \u20ac3,000 per year awarded to private-sector employees under company or territorial collective agreements and linked to measurable improvements in productivity, profitability, quality, efficiency or innovation.<\/p>\n\n\n\n To qualify, an employee\u2019s income from employment in the previous year must not have exceeded \u20ac80,000.<\/p>\n\n\n\n The 2025 Budget Law introduces a special integrative allowance \u2013 a tax bonus \u2013 for employees in the tourism, hotel, spa and foodservice sectors (to support these sectors).<\/p>\n\n\n\n This bonus amounts to 15% of the gross remuneration paid for:<\/p>\n\n\n\n This 15% is entirely excluded from taxable income (i.e. it is not taxed) and applies only to services provided between 1 January and 30 September 2025.<\/p>\n\n\n\n To qualify, employees in the private sector must:<\/p>\n\n\n\n The 2025 Budget Law introduces a more favourable tax regime for tips received by employees in the accommodation sector (hotels, guesthouses, etc.) and in foodservice (bars, restaurants and similar outlets).<\/p>\n\n\n\n There are two key changes compared with the 2023 Budget Law:<\/p>\n\n\n\n Important details:<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" The Italian Revenue Agency has published a new circular clarifying the measures introduced by Legislative Decree no. 192 of 13 December 2024 and Law no. 207 of 30 December 2024 (the 2025 Budget Law). The circular provides operational instructions on the latest changes to tax rules and employment-related provisions.<\/p>\n","protected":false},"author":2,"featured_media":625,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[48],"class_list":["post-1094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-regulatory-news","tag-tax"],"yoast_head":"\n\n
Increase in employee tax credit<\/strong>. The basic income tax deduction for employees (excluding pensions and certain other types of income) increases from \u20ac1,880 to \u20ac1,955.<\/h2>\n\n\n\n
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Supplementary income benefit<\/strong><\/h2>\n\n\n\n
Non-taxable amount for employees earning up to \u20ac20,000<\/strong><\/h2>\n\n\n\n
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Tax credit for income between \u20ac20,000 and \u20ac40,000<\/strong><\/h2>\n\n\n\n
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Recovery of undue amounts and reconciliation<\/strong><\/h2>\n\n\n\n
Tax relief for dependent children and other relatives<\/strong><\/h2>\n\n\n\n
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Extension of the reduced tax rate for productivity bonuses<\/strong><\/h2>\n\n\n\n
Tax relief for tourism and hospitality workers<\/strong><\/h2>\n\n\n\n
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Improved tax treatment for tips in the tourism and hospitality industries<\/strong><\/h2>\n\n\n\n
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