What Changes with the Tax Reform? The Novelties

The Finance Committee of the Chamber of Deputies has completed the analysis of the draft law on tax reform.
It is not yet the final step in defining the text, which has to undergo two more readings. However, it is a decisive step.
In fact, out of the 20 articles in the reform, the Committee’s analysis focused only on the first 13. It will then be up to the Senate to proceed with the verification of the next seven and make the final approval in the third reading.

More Substantial Thirteenth Salaries

The Finance Committee of the Chamber of Deputies has approved the amendment that provides for lower tax burdens on thirteenth salaries and suspends the proposal to apply incremental flat tax for employees.
In particular, regarding the thirteenth salary, the following is expected:

The application, instead of income tax brackets, of a substitute tax on personal income tax (IRPEF) and its surcharges, with favorable rates on salaries paid as overtime exceeding a certain threshold and on income attributable to the thirteenth salary.

Installments for Tax Advances

The provision of IRPEF advances concerns, self-employed workers, and individual entrepreneurs.
It will be possible to introduce installment payments for IRPEF advances and balances and also to provide for a “progressive and eventual” reduction of withholding tax.

Incentives for Businesses

Approval has been given to allow for super-amortization linked to new hirings. This measure complements the so-called dual-track IRES, which allows for a reduction in the tax rate for companies that employ resources in investments and hirings in the two years following the creation of income.

Fringe Benefits

As for fringe benefits, the exemption threshold has been raised from 258 to 3,000 euros in favor of workers with children.

IRPEF

The reform provides a comprehensive and organic revision of the personal income tax system.
The objective is to transition towards a single-rate tax system (flat tax), while remaining fully compliant with the principle of progressivity, by reorganizing deductions from the taxable base, income brackets and tax rates, deductions from gross tax, and tax credits. Including a focus on the composition of the household, costs incurred for the upbringing of children, protection of the primary residence and people’s health, education, complementary pension schemes, and the goal of improving energy efficiency, as well as reducing seismic risk in existing buildings.
For the time being, the system is set at three IRPEF tax rates, which should come into effect as early as next year.

The Finance Committee of the Chamber of Deputies has completed the analysis of the draft law on tax reform.
It is not yet the final step in defining the text, which has to undergo two more readings. However, it is a decisive step.
In fact, out of the 20 articles in the reform, the Committee’s analys…