Ministry of Labour: certification of gender equality, tax exemption for companies

The Ministry of Labour and Social Policy, in consultation with the Ministry of Equal Opportunity and Family Affairs and the Ministry of Economy and Finance, issued Italian Ministerial Decree of 20 October 2022, regarding the tax exemption for private companies that have obtained the certification of gender equality and additional measures for the promotion of gender wage equality and women’s participation in the labour market, implementing Article 5, paragraph 2 of Italian Law No 162/2021, and Article 1, paragraph 138 of Italian Law No 234/2021.

Contents of the decree

To implement the provisions contained in the previously mentioned articles, the decree identified:

• The criteria and procedures for granting, from 2022, the tax exemption for private companies that have obtained the certification of gender equality, referred to in Article 46-bis of Italian Legislative Decree No 198/2006, as amended, applicable for the period of validity of the same certification;
• Measures to promote gender wage equality and women’s participation in the labour market to be implemented, from 2022, through the Ministry of Labour and Social Policy’s ‘Fund for the support of gender wage equality’.

Tax exemption for private companies

Article 2 of the decree states that private companies that have obtained the certification of gender equality, from 2022, can benefit from a tax exemption as governed by Articles 3 and 4 of that decree. The exemption may be applied for the duration of the validity period of the said certification.

The benefit, for employers, is the possibility of taking advantage of a reduction to the extent of 1 percent of the total social security contributions for which they are liable, subject to a maximum limit of EUR 50,000.00 on an annual basis. If, in connection with a large number of applications submitted, the allocated resources should prove insufficient, the benefit granted to companies would be proportionally reduced.

The tax relief, according to the provisions contained in the decree, will be prorated on a monthly basis and enjoyed by employers in reduction of their social security contributions, on the monthly payments related to the period of validity of the certification of gender equality. The certification is valid for three years and is subject to annual monitoring by the National Social Security Entity (Istituto Nazionale della Previdenza Sociale, ‘INPS’). It should be pointed out that company union representatives and equality counsellors and advisors may, according to Italian Ministerial Decree of 29 April 2022, report to the certifying body any critical issues found at the certified company.

Application for the tax exemption

According to the provisions of Article 3, for the purpose of eligibility for the exemption, private sector companies, through their legal representative or a delegated intermediary, have to submit an electronic application to INPS in accordance with the operating procedures and specific instructions provided by INPS.

Applications shall include the following information:

• company identification data;
• the estimated average monthly salary related to the equality certification’s period of validity;
• the estimated average employer rate related to the equality certification’s period of validity;
• information regarding the corporate workforce;
• the sworn self-declaration, issued under Italian Presidential Decree No 445/2000, with which the company declares that it holds the gender equality certification referred to in Article 46-bis of Italian Legislative Decree No 198 of 11 April 2006, and that the company is not subject to measures suspending tax benefits imposed by the National Labour Inspectorate under Article 46, paragraph 4, of the same Legislative Decree;
• the certification of gender equality’s period of validity.

It should be noted that if the certification is ordered to be revoked, the companies concerned will be required to promptly notify INPS and the Equal Opportunity Department.

If a company unduly benefits from the tax exemption, it will be required to pay the contributions not due in respect of the tax reduction, as well as the penalties set out in the relevant legal provisions. This is without prejudice to any criminal liability where the act constitutes a crime.