The maxi deduction provided for by Italian Legislative Decree no. 216 of 30 December 2023, fully implemented by Italian Ministerial Decree of 25 June 2024, allows, for 2024 only, companies with business income and those engaged in the arts and professions to benefit from a labour cost deduction increased by 20% for the purposes of determining their income with reference to new permanent hires in 2024. This is to provide an incentive to the recipients to establish this type of employment relationship.
The benefit will only apply if there is an increase in the number of permanent employees as of 31 December 2024 with respect to the average number of permanent employees employed in the previous year, as well as an overall increase in the number of employees, including those on fixed-term contracts, at the end of 2024, compared to the average number employed in the previous year.
Newly established companies operating for less than 365 days and companies and institutions in crisis are excluded from this benefit.
For the purposes of determining the applicable increase, it will be necessary to determine the lower of the 2024 cost actually attributable to the new permanent employees and the overall increase in the cost of personnel with respect to the current year ended 31 December 2023.
The benefit, determined at the end of the current year, may be applied, where possible, on the – Italian Tax on Corporate Income (Imposta sul Reddito della Società, ‘IRES’)– Italian Income Tax on Natural Persons (Imposta sul Reddito delle Persone Fisiche, ‘IRPEF’) declarations prepared in 2025.
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