Proposed Changes to IRPEF and IRES Tax Matters: Simplifying Regulations for Employees

The new legislative decree on tax matters, which includes changes to IRPEF and IRES, has been postponed in the Council of Ministers. The text was expected to contain provisions regarding benefits for the thirteenth month’s salary and the taxation of productivity bonuses. Specifically, it proposed an allowance of up to 100 euros for employees with a total income not exceeding 28,000 euros in 2024, under certain conditions.

In addition to this, the draft decree outlines that performance bonuses paid from January 1, 2025, will be subject to a 10% tax within a ceiling of 3,000 euros. This tax is in lieu of personal income tax and additional regional and municipal taxes and applies to bonuses linked to indicators of productivity, profitability, quality, efficiency, innovation, reputation, and social responsibility.

The draft also specifies that the temporary early supplementary income (Rita) will only be recognized in cases of employment termination not related to pension requirements starting from January 1, 2025. The decree aims to simplify and rationalize the current regulations to encourage wider access to tax measures for employees.

Moreover, changes are being made to streamline the process of accessing tax measures and support company rewards for workers. The decree highlights the importance of capturing individual company dynamics and ensuring fair rewards without solely focusing on numerical increases in productivity indicators. Furthermore, data on the number of workers benefiting from productivity bonuses will be provided as part of these changes.

Overall, this draft decree aims to provide more favorable measures for employees while simplifying existing regulations.