In its Response to Application no. 154 of 15 July 2024, the Italian Revenue Agency ruled again on employees’ obligations to give notice to supplementary pension funds (hereinafter “Pension Fund”), following the decision to make additional Pension Fund contributions, which, in this case, derived from the conversion of performance bonuses.

The Application, submitted by a Pension Fund, follows previous clarification from the Italian Revenue Agency contained in Resolution no. 55/E of 2020. In that earlier resolution which related to employees choosing to pay amounts deriving from a company welfare plan to the Pension Fund, the Italian Revenue Agency stated that “as the payment is made directly by the employer to the Supplementary Pension Fund, as well as set out in the Certificate of Income issued to the employee, the latter is not required to give notice to the supplementary pension fund in relation to the welfare credit intended for this purpose”.

The Applicant’s question

On the basis of the Resolution cited, the Applicant requested confirmation that the employee was under no obligation to give notice of amount of contributions paid to the Pension Fund, even if they derived from the conversion of the performance bonus, notice of which was in fact given by the employer at the time of payment of the contribution, with subsequent registration of the amounts also provided in each worker’s Certificate of Income.

In the question the Applicant recalled the advantages identified by the legislation in the event of conversion of the performance bonus into additional contributions to the Pension Fund, such as: i) the recognition of the same as deductible charges under Article 10 letter e – bis) of the TUIR, (ii) their exclusion from the annual deductibility limit of EUR 5,164.57 of pension fund payments on the basis of an increase of this limit by a maximum of EUR 3,000 in cases of performance bonus conversion, (iii) the exclusion of such contributions from the taxable base at the time of payment of the pension benefit by the funds.

The obligation to give notice to the Pension Fund

With reference to the last preferential benefit set out above, namely the exclusion from taxation of the pension benefit of contributions paid to supplementary pension schemes in place of performance bonuses, the Italian Revenue Agency clarified that this benefit is subject to giving notice to the Pension Fund of the contributions, to be carried out by 31 December of the year following the year of payment.

As indicated in Italian Revenue Agency Circular no. 5/E of 2018, the notice must contain (i) both the amount of contributions not deducted in the reference year and (ii) the amount of contributions replacing performance bonuses, which, even if they were subject to taxation, will not be included in the taxable base of supplementary pension benefits, under Article 1, paragraph 184-bis of Italian Law no. 208 of 2015, introduced by the 2017 Budget Law.

The Italian Revenue Agency’s opinion on the Applicant’s question

In its Response, the Italian Revenue Agency accepted the Applicant’s interpretation, essentially confirming the position taken stated in the above-mentioned Resolution no. 55/E of 2020.

Employees who choose to convert the performance bonus into additional payments to the supplementary pension scheme are not required to give notice of such contributions to their pension fund if this is done by the employer, for example by sending, via a specific electronic form, the data relating to the payments divided between (i) “ordinary” monthly contributions to the fund, (ii) and contributions replacing the performance bonus.

In conclusion, the Italian Revenue Agency’s recent Response, which follows and supplements the 2020 Resolution, is particularly useful as it provides clarification to employers and workers with respect to the notice obligations, the fulfilment of which, in fact, is “in the taxpayer’s interest, to avoid taxation of contributions paid in place of bonuses, at the time the benefit is paid by the Fund”.

With Resolution no. 40/E of 23 July 2024, the Italian Revenue Agency provided specific clarification on a question concerning the tax treatment of sums paid as an incentive to leave and other contractual amounts paid on termination of the employment relationship with workers benefiting from the so-called impatriate incentive regime, under Article 16 of Italian Legislative Decree no. 147 September 2015, no.

The request for clarification

The Applicant informed the Italian Revenue Agency that it had reached an agreement for the consensual termination of the employment relationship with some workers who were beneficiaries of the tax incentive regime for so-called impatriates, involving payment to the latter of sums as an incentive to leave and other settlement amounts.

In light of the above, the Applicant requested clarification on the possibility of applying the preferential regime referred to in Article 16 of Italian Legislative Decree no. 147 of 14 September 2015 to the aforementioned sums in derogation from the separate taxation regime referred to in Articles 17 and 19 of the Italian Income Tax Consolidation Act (Testo Unico delle Imposte sui Redditti, ‘TUIR’).

Reference legislation

As a preliminary point, it should be noted that in line with the provisions of Article 17, paragraph 1, letter a), of the TUIR “the tax is applied separately on the following income: a) […] other one-off compensation and amounts received relating to the termination of the aforementioned relationships […], as well as the sums and amounts received in any case net of legal costs incurred […]”. These also include “other compensation and amounts received on a one-off basis in relation to termination”, such as sums paid as an incentive to leave, up to an overall limit of EUR 1 million.

As is well known, for such income the taxation applied by the withholding agent is to be considered provisional, since it is only at a later date that the Italian Revenue Agency provides for its recalculation by determining the tax actually due, applying the average rate of the preceding five-year period or by including the income in the total income of the year of receipt, if this is more favourable to the taxpayer.

With reference, however, to the applicability of the preferential tax regime for impatriate workers, it has been clarified on several occasions that the preferential income “must be determined according to the provisions set out in the TUIR for the individual categories of income, namely Article 51, if deriving from employment relationships, Article 52, if deriving from relationships assimilated to employment and Article 54 if deriving from the exercise of arts and professions”.

The Italian Revenue Agency’s conclusions

Without prejudice to the point highlighted above, in this resolution the Italian Revenue Agency clarified at the outset that, for the purposes of applying the special regime in question, “the relief applies to income from employment in Italy which is included in the total income according to the ordinary provisions of the TUIR. However, income which is not included in the taxable base for Italian Personal Income Tax (Imposta sul Reddito delle Persone Fisiche, ‘IRPEF’) purposes is excluded, including income which is taxed separately under the aforementioned Article 17 of the TUIR”.

Consequently, the ruling confirmed that amounts that do not contribute to the formation of the taxable base for IRPEF purposes are excluded from the “impatriates” preferential tax regime. This includes those subject to separate taxation such as the compensation that is the subject of the request for clarification. 

It introduces, however, one new aspect, guaranteeing that workers benefiting from the so-called impatriate regime can apply, after receiving the notice of the results of the tax assessment, to the competent regional office of the Italian Revenue Agency, which, upon verification of the conditions, will reassess the tax due, including the income in question in the total income for the year in which it is received.

Alternatively, while waiting for the notice from the Italian Revenue Agency, workers can submit a request for reimbursement under Article 38 of the same Italian Presidential Decree no. 602 of 1973.

With notice no. 2704 of 23 July 2024, the Italian National Social Security Institute (Istituto Nazionale della Previdenza Sociale, ‘INPS’) announced the implementation of the electronic procedure for submission of applications for parental leave and hourly parental leave seeking the increased 80% allowance.

The communication in question is addressed to all employees who, based on the provisions contained in the 2023 Budget Law (Italian Law no. 197/2022) and the 2024 Budget Law (Italian Law 213/2023), are entitled to take an 80% allowance for parental leave, for a maximum of one or two months depending on the conditions set out in the legislation.

Under the new procedure, it will be necessary, during the compilation phase for the employee (i) to confirm that he/she is requesting the allowance at an increased rate, (ii) to identify the date relating to the end of maternity or paternity leave (mandatory or otherwise), to correctly identify the months eligible for the 80% allowance.

Finally, INPS announced that the application procedure has already been changed to allow the submission of the application for parental leave only for periods starting within two months from the date of submission of the application itself.

In its Response to Application for Ruling no. 142 of 2024, the Italian Revenue Agency was once again called upon to provide guidance on the processing, in terms of retention, of documentation relating to expense reports and supporting attachments for employees’ travel expenses, with specific reference to taxis normally paid for with a company card.  

The Application for Ruling dealt with the applicant Company’s intention to dematerialise the aforementioned documentation, through an appropriate computer system, to streamline the preparation, management and monitoring of expense reports.  

The dematerialisation process  

To explain the dematerialisation process for the expense reports to the Italian Revenue Agency, the Company explained the different dematerialisation phases, starting from the scanning of the paper expense document by workers, through a special application installed on the company smartphone, to the transfer in a “form”, through the support of Optical Character Recognition (OCR technology), of the data contained in the document such as: the name of the operator, the date and time, the city, the amounts and reason for the expense (e.g.: food, taxi etc.). The “company form” would contain all the information collected from the paper version of the expense reports and the scanned image of the same. The applicant Company guaranteed the integrity, inalterability and legibility of the document thus digitised and that it would be automatically archived in accordance with the law. The document would therefore no longer be editable by the employee. 

The Company added that consistency between the scanned document and the digitised information would be further ensured by the use of Artificial Intelligence tools that would highlight any anomalies and by a final check by the approving manager. 

The expense report and its supporting documents, thus processed, would be archived. 

Purpose of the Application  

Following the description of the process, the Applicant asked the Agency if, once compliance with Article 4, Italian Ministerial Decree of 17 June 2014 on the dematerialisation and archiving of documents had been confirmed: (i) paper documents issued to employees, digitised and attached to expense reports also digitised, considered “original non-unique documents” can be destroyed; (ii) original non-unique documents can also include taxi receipts, not documented by invoice, but by mere accounting entries made by staff in transit at the time of payment by company card, which can also be dematerialised by the process set out above. 

The Italian Revenue Agency’s Response  

The Italian Revenue Agency’s Response to the Application emphasised what has been clarified several times in the past regarding dematerialisation procedures for seconded employees’ travel expense reports, namely that in relation to electronic documents, “any issue must have regard for Italian Legislative Decree no. 82 (so-called ‘Digital Administration Code’ or ‘CAD’ (Codice dell’ Amministrazione Digitale) and its implementing decrees (the Italian Prime Ministerial Decrees of 22 February 2013, 3 December 2013 and 13 November 2014, and the Italian Ministerial Decree of 17 June 2014)”. 

In this regard, the Italian Revenue Agency stated that any tax-relevant electronic document (defined in Article 1, letter p of Italian Legislative Decree no. 82/2005 as “an electronic document that contains the electronic representation of documents, facts or legally relevant data”), such as the expense reports under consideration, must possess, among others, the characteristics of inalterability, integrity and authenticity, as set out in Article 2 of Italian Ministerial Decree of 17 June 2014 and in Article 3 of Italian Prime Ministerial Decrees of 13 November 2014 and 3 December 2013, without prejudice – added the Italian Revenue Agency – to the additional requirements, identified by Italian Presidential Decree no. 917 of 1986 (Italian Income Tax Consolidation Act (Testo unico delle imposte sui redditi, ‘TUIR’), for the purposes of including those expenses in deductible costs. 

Only if the electronic documents have the characteristics of inalterability, integrity and authenticity mentioned, can they completely replace the paper copies, and can be duplicated under Article 23-bis of Italian Legislative Decree no. 82. 

With respect to the supporting documents attached to the expense reports, in relation to which the Applicant was applying to include them as original non-unique documents, the Italian Revenue Agency referred to its previous Resolution no. 96 of 21 July 2017, stating that “generally the receipts attached to expense reports correspond to the accounts of the suppliers or providers, who are required to fulfil their tax obligations, which makes them identifiable as non-unique original hard copy documents, within the meaning of the definition in Article 1, letter v of the CAD”. 

The ability to trace the content of the supporting documents through other records or documents the retention of which is mandatory, even if in the possession of third parties, makes the electronic retention of the supporting documents possible without the need for a public official to attest the conformity of the electronic copies to the original (Article 4, Italian Ministerial Decree, 17 June 2014). This in turn makes it possible to completely dematerialise and destroy the document. 

Finally, with regard to the classification of documents issued to travelling workers by taxi drivers as ‘non-unique analogue original documents’ and deductible expenses, the Italian Revenue Agency does not believe that mere accounting receipts delivered by the service provider following electronic payment with a company card can be considered as such. Rather, to be considered non-unique analogue documents and for the expense incurred to be considered as a deductible cost, it will be necessary to issue an invoice or other tax document accompanying the accounting receipt from which the essential data of the expense made (date, name of the service provider, route, consideration). In this regard the Italian Revenue Agency recalled that taxi providers must produce an invoice at the request of the client, under Articles 1 and 2 letter l) of Italian Presidential Decree no. 696/1996, and that the issuance of such a tax document in duplicate, one of which is kept by the service provider, either on paper or electronically, makes the analogue document non-unique. 

Finally, the Italian Revenue Agency noted, with reference to the supporting documents accompanying the expense reports, that if they are original unique analogue documents, “as it is not possible to trace the content through other documents the retention of which is mandatory, including from third parties” then the intervention of a public official will be required for correct dematerialisation.    

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• Management of national and trans-national postings

On 30 April 2024, Italian Law no. 56/2024, which implemented Italian Decree-Law no. 19/2024, was published in the Italian Official Gazette. Among other things, the new law introduced important changes to the sanctions regime for unlawful staff supply work, contracting and secondment. 

Specifically, Article 29, paragraph 4 of the above-mentioned law has amended Article 18 of Italian Legislative Decree no. 276/2003, effectively reinstating the criminal offences of unlawful staff supply work, contracting and secondment which had previously been decriminalised (Article 1, Italian Legislative Decree no. 8/2016). The new law has introduced the alternative or joint penalty of arrest or fine and increased the fines connected to these offences. 

Increased penalties 

In note no. 1091 of 18 June 2024, the Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’) provided explicit operational guidelines on the sanctions regime, as set out in Italian Decree-Law no. 19/2024. In particular it highlighted that from the date of entry into force of Italian Decree-Law no. 19/2024 – that is, from 2 March 2024 – unlawful staff supply work, contracting and secondment are punished alternately with the penalty of arrest (one month) or “a fine of EUR 60 euros per day for each worker employed and for each day of work”. This is increased by 20% – as already previously introduced by Article 1, paragraph 445, letter d) of Italian Law no. 145/2018 – or 30% (in the case of the sanction for ‘off the books’ work), effectively reaching EUR 72 for each worker and for each day of unlawful work (and EUR 90 in the case of ‘off the books’ work). 

A new rule that inspection staff must comply with is contained in Article 18, paragraph 5-quinquies according to which “the amount of the proportional fines, regardless of the determination of minimum or maximum limits, cannot, in any case, be less than EUR 5,000 or more than EUR 50,000”. 

These minimum and maximum limits apply to the offences referred to in Article 18, paragraphs 1 and 2, paragraph 5-ter, and paragraph 5-bis), i.e. unauthorised and fraudulent staff supply work and unlawful contracting and secondment, for which proportional fines are provided for each worker employed and for each day of work.  

Therefore, in the light of the above, and in line with what has already been set out in Circular no. 6/2016 of the Italian Ministry of Labour and Social Policies, for offences punished with a fixed proportional fine, even if the amount to be imposed in practice is less than EUR 5,000, this threshold will in any case apply. Once this requisite is met, it will then be reduced to a quarter, under Article 21, paragraph 2, of Italian Legislative Decree no. 758/1994 (therefore becoming EUR 1,250.00). 

New paragraph 5-quater of the new Article 18 of Italian Legislative Decree no. 276/2003, together with the current provisions of Article 1, paragraph 445 letter e) of Italian Law no. 145/2018, increases the penalties for recidivism while creating confusion about the applicability of one or the other provision. 

On this point, therefore, the INL intervened with its own interpretative guidance specifying that the increase referred to in paragraph 1, letter e) of Italian Law no. 145/2018 applies where, in the previous three years, the employer has been subject to any administrative or criminal sanction under the same law (so-called “simple” recidivism) while the increase referred to in paragraph 5-quater of the new Article 18 applies only in the case of repeat offences previously sanctioned under the new Article 18 (so-called “specific” recidivism). 

In the first case the fine will be EUR 60 plus 40% for recidivism (EUR 84 for each worker and for each day of unlawful work); while in the second case the fine will be EUR 72 plus 40% (EUR 100.80 for each worker and for each day of unlawful work). 

Finally, it should be noted that Italian Legislative Decree no. 19/2024 is silent on the alternative nature of the penalty of arrest or fine in the presence of the aggravating factor of child exploitation, for which the penalty of arrest of up to 18 months together with the fine increased by up to six times remain. 

On this aspect, the INL, in light of the new wording of most of the sanctions of Article 18 of Italian Legislative Decree no. 276/2003, clarifies that also in the presence of the aggravating factor of child exploitation, “the prescription under Article 20, Legislative Decree no. 758/1994 and, where the prerequisites are met, a fine equal to a quarter of six times the basic penalty (increased by 20%) or that determined following recidivism [will also apply]”. In addition, the minimum and maximum limits introduced by Article 5-quinquies of the new Article 18 of Italian Legislative Decree no. 276/2003 will apply. 

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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• New regulations on the use of contributions’ relief

The “Cohesion Decree” has introduced a new contributory exemption for the recruitment of permanent staff. This exemption will be available for up to 24 months for the recruitment of young people who, as of the start date, have not yet reached 35 years of age and have never been employed on a permanent basis..

The “Cohesion Decree” has introduced a new contributory exemption for the recruitment of permanent staff. This exemption will be available for up to 24 months for the recruitment of young people who, as of the start date, have not yet reached 35 years of age and have never been employed on a permanent basis.

The measure of the exemption for companies is equal to 100% of the INPS contributions payable by the employer, up to a maximum monthly limit of €500 for each “under 35” employed. Moreover, the monthly limit increases to €650 for new recruits in locations in the southern part of the national territory.

Regarding the timing of the exemption’s implementation, the “Cohesion Decree” states that it can be applied to new recruits employed beteen the 1^st of September 2024, and the 31^st of December 2025. The entry into force, however, is still subject to approval by the European Commission.

To benefit from the exemption, employers will therefore have to wait, while also meeting the general requirements for enjoying contributory benefits, such as having a regular DURC and complying with legal and contractual labor regulations. In fact, in addition to authorization from the European Union, the exemption will also necessitate the publication of the usual operational instructions by INPS.

Regarded as probably the most innovative job of recent years, the activity of influencers, which is on the rise in the large financial market of the internet, is not only the most coveted profession among the very young, but also a profitable resource for all those companies that collaborate with these popular and influential market figures, for their own commercial purposes, and the promotion and sale of products.

However, the ever-increasing visibility and use of influencers, the face in some cases of real corporate propaganda, is accompanied by as yet ill-defined employment laws governing the collaboration relationship between influencers and commissioning companies.

In this context, a recent  Court of Rome ruling is of particular interest. In judgment no. 2615 of 4 March 2024, dealing with the classification of the collaboration relationship between influencer and commissioning Company, the Court held that the relationship fell under the contractual category of an agency relationship under Article 1742 and following of the Italian Civil Code.

Following an inspection, the Rome Inter-regional Labour Inspectorate had considered certain influencers employed by the claimant Company to be classifiable as Commercial Agents and required the company to pay contributions to the National Assistance Organisation for Commercial Agents and Representatives (Ente nazionale di assistenza per gli agenti e i rappresentanti di commercio, ‘ENASARCO’) Social Security Fund and to the Severance Indemnity Fund.

The influencers’ activities

The Company was a wholesale food supplement business. Its sales were mainly through its own websites and it used a number of people in online promotion and sale of its products. The company collaborated with professional athletes and personal trainers with whom the Company had signed collaboration agreements relating to sponsorship, testimonials and “influencer services”.

In their capacity as sponsors and providing testimonials, professional athletes undertook to use their image, to participate in official competitions, to wear Company-sponsored clothing, and to publish fitness-related articles and videos on the company website. In return for these undertakings, there was a fee, agreed in advance, which was totally unrelated to the company achieving its sales results.

The “influencer activity” was different and consisted of the collaborators undertaking to promote the Company’s products through their social channels: Facebook, Instagram, Twitter, YouTube, with the aim of influencing their followers and promoting the commissioning company’s products on a large scale.

During the promotional activities on their web pages, the influencers indicated a customised discount code linked to the Company’s platform. The use of the discount code allowed the Company to trace the orders received back to the influencer through which the buyer was purchasing the product. In this event the parties had agreed on a percentage of profit on the orders attributable to the influencer.

From the evidence it emerged that through the professional’s ability to grant discounts to user followers she “was actually carrying out sales promotion activity where the remuneration was determined by the orders directly procured and successfully completed by the collaborator”.

From the inspection of the invoices issued, it appeared that the above-mentioned appointments were long-term and took the form of multi-year continuous collaborations.

The Inspectorate’s view and its confirmation by the Court

With respect to the Inspectorate’s finding, the claimant Company argued that the conditions necessary to classify the influencers as Commercial Agents were missing on the basis of the following factors: (i) the existence of a permanent professional services contract under which the services were provided, (ii) the absence of a permanent on-going appointment for the promotion and conclusion on behalf of the Company of sales contracts in a specific area, (iii) the absence of a specified scope of work, which is typical of the contract referred to in Article 1742 of the Italian Civil Code.

Refuting the points raised by the Company, the Inspectorate emphasised the typical aspects of the agency agreement, which were present in the way in which the Company employed the influencers, namely: (i) the activity carried out on a permanent basis, demonstrated by the type of agreement which was for an indefinite period and evidenced by the long-standing issuance of invoices, (ii) the purpose of the agreements entered into with the Company, not limited to mere propaganda but to the promotion and sale of products complete with a discount code made available by the influencer, (iii) the percentage of profit associated with the purchase of the product by the user and (iv) the presence of a specified area, which in view of the new consumer purchasing methods based on an online ‘click’, can be traced back to the community of followers.

The Court of Rome agreed with the Inspectorate that the influencer in this case fell within the classification of Commercial Agent and ordered the Company to pay the ENASARCO contributions, ruling on an issue which is not yet regulated.

In circular no. 69 of 29 May 2024, the Italian National Social Security Institute (Istituto nazionale della previdenza sociale, ‘INPS’) provided instructions on how to make up shortfalls for periods not covered by contributions for the two-year period 2024-2025. This is line with Article 1, paragraphs 126 to 130 of Italian Law no. 213 of 30 December 2023, (hereafter, ‘2024 Budget Law’) that reintroduced this provision which had already been introduced, on an experimental basis, for the three-year period 2019-2021 by Italian Law no. 26 of 28 March 2019.

Beneficiaries

The following categories of people are eligible to make up shortfalls for periods not covered by contributions (also called ‘contributions gaps’) (i) employees with Compulsory General Insurance for disability, old age and surviving partners (Assicurazione Generale Obbligatoria per l’invalidità, vecchiaia e superstiti, ‘AGO’), or (ii) those who are enrolled special contributions’ management fund for self-employed workers, or (iii) those who are enrolled in the Separately Managed Contributions fund for other workers (Gestione Separata), or (iv) those who have substitute and exclusive forms of AGO provided that they have not made sufficient contributions as of 31 December 1995 and are not already in receipt of a pension.

In summary, only those who will obtain a pension calculated entirely on contributions and who have made no additional pension contributions (mandatory, notional, from redemption) before 1 January 1996 to any compulsory pension management scheme (including professional pension funds) will then have the right to make up pension shortfalls.

INPS has indeed clarified that if a person who makes a request to fill a pensions shortfall, for any reason, reaches a position where they have made sufficient contributions prior to 1 January 1996, the sums paid towards the shortfall will be returned and the payment will be automatically cancelled. Furthermore, this exclusion from the right to make up contribution gaps also applies to holders of direct pensions (in any compulsory pension management scheme).

Contributions gaps, cost of making up shortfalls and potential employer intervention

It should be highlighted that the INPS guarantees that contributions gaps can be made up only for the periods entirely uncovered by contributions falling between 1 January 1996 – 31 December 2023. This right is also extended to those who have not used it to make up shortfalls introduced previously by Italian Law no. 26/2019 or to those who have used it, if the person eligibility requirements are met, for a maximum of five years.

However, people who have periods of work for which no contributions have been paid remain explicitly excluded from the possibility of benefiting from the ability to fill contributions gaps. In this case, the worker can only use the so-called creation of a life annuity under the provisions of Article 13, Italian Law no. 1338/1962.

Furthermore, the periods that can be made up must fall between the year of the first and the last contribution credited to the INPS insurance schemes while it is not possible to make up contributions gap periods at professional funds.

With regard to the cost, the INPS announced that the cost of making up contributions gaps is calculated under Article 2, paragraph 5 of Italian Legislative Decree no. 184/1997, i.e. using the percentage method, applying the financing contribution rate in force on the date of submission of the application to fill the shortfall in contributions to the applicable Pension Management Scheme. The calculation is effectively based on the salary subject to contributions in the last 52 weeks prior to the transaction and correlates to the period for which contributions are being made. The payment can be made in a lump sum or in a maximum of 120 monthly instalments.

It is also essential to underline that the amount of contributions that the worker acquires through filling a contributions gap contributes to both the maturation of the right to a pension and its financial amount. In addition, the cost incurred in filling a contributions gap is tax deductible from overall income.

It is of particular note that, in the private sector, the employer rather the employee can pay the contributions’ gap.

In fact, if the beneficiary’s consent is obtained in advance, the employer can pay the employee’s contribution gap by allocating any production bonuses due to employee and take advantage of the fact that it will be fully deductible from the company’s income.

Final thoughts

The clarification provided by the INPS shows, on the one hand, the financial benefits of the scheme as it permits payment by instalment and the costs of adherence are deductible, and on the other hand, the possibility of early retirement, as being able to make up the gap is useful both for the accrual of the right to a pension and for its monthly amount.

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Exercise of optional contribution regime: buy-back periods determine if pre-conditions are fulfilled – HR Capital

Published in the EU Official Journal, C series, on 23 April 2024, the opinion of the European Economic and Social Committee (EESC), C/2024/2479 analyses the current European and global employment framework, which has been increasingly shaped by globalisation, digitisation and the pandemic, and the critical issues related to tax aspects, which are progressing slowly in comparison to the changing world of work.

The new employment framework 

The EESC’s opinion on “Taxation of cross-border teleworkers globally and the impact on the EU” opens with an overview of today’s working world: early changes can be traced back to globalisation and the development of digital tools and new technologies, that have been affecting companies for decades. In recent years, the companies themselves and their workers have also unknowingly contributed to the acceleration of the digitisation process, having to resort during the Covid-19 pandemic to the use of “new technologies” that would ensure that they could carry out their daily work activities – by necessity carried out remotely – without it affecting their work.   

The unintended result was the realisation that the exact same work could be done without having to be physically present, as well as the recognition of the effectiveness of the new mode of remote work, not only by the companies that now benefit in terms of reduced costs related to the space formerly used by employees, but especially by the workers, in that remote work has improved the quality of life by increasing the work-life balance. And while worker welfare has always translated into a productivity benefit for companies, in this case remote working is also believed to promote increased corporate sustainability through a reduction in the environmental impact generated by commuting, furthering EU goals in this regard. 

As noted above, while remote working has many positive implications, on the other hand, when workers employed in a foreign state other than their country of origin work remotely, several critical issues emerge, including (i) the social security and tax aspects relating to the worker’s income and (ii) the impact that remote work has on the States involved. 

After analysing the current regulatory framework, the EESC opinion affirms the need for updated tax rules that reflect the new way in which work is carried out, and which also reflect the fact that a worker’s choice to live in a given country has implications in terms of public spending and tax revenues of the countries involved. 

Current tax legislation 

Where a person resides in one state and works in another, the general rule on the taxation of employment income set out in the OECD model gives the right to tax the employment income to the state where the work is carried out. This is subject to bilateral agreements derived from this model, signed by the countries concerned, aimed at avoiding double taxation on transnational income, for example in the case of European cross-border workers. 

However, the EESC’s view is that the increasing presence of workers working remotely in their State of residence, while their employer is located in a different State, means that both bilateral and multilateral agreements need to be reviewed. 

In this regard, the opinion refers to the recent agreement between Switzerland and France, which has been updated to deal with taxation of the income of cross-border telecommuters. The existing agreement between the two states stipulates that frontier workers residing in France who work in the canton of Geneva are subject to taxation in the Swiss canton by withholding tax on wages received. Under the new agreement, if the hours of cross-border telecommuting are less than 40% of total working hours, the tax regulations for cross-border telecommuters will remain unchanged. From the perspective of the countries involved, the agreement provides for a revenue-sharing mechanism under which the Swiss canton will pay compensation to France of 3.5% of the applicable tax revenue. 

While noting the need for countries to agree specific solutions to regulate cross-border telework, the Committee hopes, that by expressing its opinion, general principles can be established. These can then be transposed by bilateral agreements, to avoid ad hoc solutions among individual states resulting in a set of internationally applicable standards and rules that would lead to inconsistency in regulations. 

The Economic and Social Committee’s proposal 

The EESC’s proposal sees a possible solution in the taxation of telecommuters’ income in the country where the employer is based. This would simplify and harmonise the tax rules for cross-border telecommuters and would facilitate international mobility and its benefits.  

In its opinion the Committee also analyses the impact that this solution could have on the country where the worker resides, in terms of increased public spending and failure to increase tax revenues, its main source of financing. Indeed, the fact that a worker remains in his or her own State will result in greater use of public services, subsidised by the public expenditure of his or her own State, which, in contrast, will not be financed by the tax on the worker, as this will be applied by the employer’s State. To obviate this burden on the first state, the EESC believes that the countries concerned could decide to share the tax revenue, for example, on the basis of the actual presence of the workers in the countries concerned, through the data provided by the employer to its tax authority (acting as a “one-stop shop”), a mechanism that would also ease any double taxation issues. 

In a globalised and digitised world, there will be more and more cross-border telecommuters, free to choose the country in which they reside and “connect” regardless of where their employer is based; faced with this prospect, it will be easier to apply the tax law of the country in which the work is performed, rather than the country in which the worker lives. 

The EESC concludes its opinion by speculating that the implementation of such a proposal could take place through “introducing alternative model provision(s) in the commentary of the OECD Model Convention to be used by countries in bilateral negotiations. This would facilitate a more uniform set of rules”. 

If you want to learn more about the topic:

• New social security agreements between Italy-Albania and Italy-Japan: updates  – HR Capital
• Entry into Italy of highly qualified personnel: changes and simplified procedure for companies and workers (Norme e Tributi Plus Diritto – Il Sole 24 Ore, 14 May 2024 – Valentino Biasi, Andrea Di Nino, Giorgia Tosoni) – HR Capital

With circular no. 57 of 18 April 2024, the Italian National Social Security Institute (Istituto nazionale della previdenza sociale, ‘INPS’) issued the operating instructions for the new rules on parental leave. The new rules were introduced by Article 1, paragraph 179, of Italian Law no. 213 of 30 December 2024 (hereafter, 2024 Budget Law), which amended Article 34, paragraph 1 of Italian Legislative Decree no. 151 of 26 March 2001, (the “Consolidated Maternity and Paternity Support Law”). 

The new rules and beneficiaries 

With the aim of fostering work-life balance as well as promoting greater sharing of parental responsibilities between working mothers and fathers, the new rules have increased, from 30% to 60% of salary, the parental leave allowance for an additional month to be taken before the child’s sixth birthday (or, in the case of adoption or fostering, within six years from the child’s entry into the family and, in any case, no later than the child turning 18). For 2024 only, the parental leave allowance for the additional month is 80% of salary (instead of 60%).  

The 2024 Budget Law added a second month of paid parental leave. This is more favourable than the provisions of the 2023 Budget Law, which had raised the leave allowance to 80% for a single month’s pay subject to the following conditions: 

1. only employees are entitled to the increase; 

2. compulsory maternity leave or compulsory paternity leave or alternative paternity leave must have been concluded after 31 December 2023 (taken as the starting date); 

3. it could be shared between both parents or by only one as long as the period of increased allowance falls within the first three months of non-transferable leave. On this point it should be clarified that “alternating” use of the leave between parents does not preclude the possibility of both parents taking parental leave on the same days and for the same child.  

From this it follows that, while respecting the maximum limits of parental leave provided for both parents in Article 32 of Italian Legislative Decree no. 151/2001 (10 months that can be increased to 11 months if the father abstains from taking the parental leave for a full or fractional period of at least three months), the parental leave allowance that can now be claimed by parents or a single parent is as follows:  

• one month at 80% of pay before the child’s sixth birthday (or, in the case of adoption or fostering of the child, within six years of entering the family); 
• one month at 60% of pay (80% for 2024 only), before the child’s sixth birthday (or, in the case of adoption or fostering of the child, within six years of entering the family);  
• seven months at 30%, regardless of income if taken before the child’s first birthday;  
• two months unpaid (unless the special income conditions set out in Article 34, paragraph 3 of the Consolidated Law are met). 

Changes introduced by the 2024 Budget Law 

As stated above, the increase in the allowance provided by the 2024 Budget Law only applies to parents who end (even by a single day) maternity or, alternatively, paternity leave after 31 December 2023. Thus, the provision excludes all those who have completed maternity or paternity leave on 31 December 2023. 

However, an important new change introduced by the 2024 Budget Law and also reiterated by the INPS should be highlighted. This is that the increase in the allowance for the first two months of parental leave only applies to workers who end the period of maternity or, alternatively, paternity leave after 31 December 2023, is not a condition for the right to the increase of the parental leave allowance for an additional month, but rather an initial effective date of the new provision.  

In light of the above, in the case of a child born on or after 1 January 2024, the right to an additional month’s increase in the parental leave allowance from 30% to 80% of salary for 2024 (to 60% from 1 January 2025) is granted irrespective of whether the parental leave is taken, provided there is an employment relationship at the time of taking the leave.  

If you want to learn more about the topic:
Access to NASpI for working fathers who have taken paternity leave – HR Capital

EU Blue Card holders will be able to start work immediately even in the absence of a “work permit employment contract” – There are also changes to the “digital nomads” guidelines.

Workers who are citizens of countries outside the European Union and who come to Italy to work are regulated by specific provisions, under which the Ministry of the Interior sets and limits the annual entry quotas. The provisions also ensure that highly qualified personnel can benefit from ad hoc exemptions from these quotas, allowing them to work in Italy regardless of the annual limits.

For highly qualified “non-EU” personnel, the procedures for the entry into Italy require the Italian employer and the worker to complete a set of procedural requirements certifying that the worker is highly qualified and specialised. In most cases, this will involve several relevant authorities and processing times of months.

In light of the growing international mobility of workers over recent years – also as a result of the spread of remote working that occurred during the Covid-19 pandemic – the above-mentioned entry requirements have proved to be particularly cumbersome with respect to the specific needs of employers, given the increasing number of highly specialised workers – whether employees or self-employed – who decide to work abroad and remotely for a certain period of time,with respect to their country of origin or employment.

In this regard, there have been some recent changes, deriving, first of all, from the transposition in Italy of Directive (EU) 2021/1883 and the subsequent measures introduced by the ministries concerned, which have addressed the specific features of the new procedures with a circular and a Ministerial Decree.

Looking at the recent changes, it should be remembered that in the Italian legal system, Italian Legislative Decree no. 286/1998 (“Consolidated Immigration Act”) regulates the entry into Italy of foreign persons, including with reference to employment relationships. As mentioned above, and with particular relevance to the latter, it is generally provided that, with respect to the so-called “annual quotas” of entry from time to time established by the Ministry of the Interior, it is possible to guarantee the entry of so-called “extra-quota” workers, i.e. in derogation of the ministerial limits established annually, for foreigners who meet certain specialisation requirements. These exceptions are regulated by Article 27 of the Consolidated Immigration Act.

Following the entry into force of Italian Legislative Decree no. 152/2023, which incorporated into Italian law the aforementioned Directive (EU) 2021/1883 aimed at expanding and simplifying the entry and stay of highly qualified citizens from countries outside the European Union and the Schengen area, the Ministry of Labour and Social Policies, together with the Ministry of the Interior, issued circular no. 2829 of 28 March 2024, containing some clarification on the new Consolidated Immigration Act.

Among the various changes, the introduction of additional subjective requirements aimed at identifying the “highly qualified” foreign workers, specifically referred to in the circular is of considerable importance. Currently, this definition includes not only the holders of a university degree, but also the holders of the professional qualifications provided for in the new Article 27-quater of the Consolidated Immigration Act, such as: (i) persons who have held a post-secondary level professional qualification for at least three years, (ii) persons who meet the requirements for the exercise of regulated professions, (iii) holders of higher professional qualifications attested by at least five years’ experience at a level comparable to tertiary level higher education qualifications, and (iv) managers and specialists in the field of information and communication technologies with higher professional qualifications attested by at least three years’ professional experience.

The Ministerial circular clarifies that satisfaction of the above requirements must be demonstrated at the time of submission of the application for authorisation for the EU Blue Card, by forwarding the diploma certificates issued by universities or non-university institutes at the end of the training course. In the case of professional qualifications, satisfaction of the requirements must be met through the presentation of contracts and/or payslips and the optional addition of a letter of experience drawn up by the previous employer, certifying that the worker has been employed for the time period provided for by the legislation, in the specific sector in which the worker will be employed in Italy.

In order to obtain the EU Blue Card, and in addition to the documentation referred to above, it will be necessary to submit a draft employment contract or binding offer for the highly qualified work activity for a period of at least six months and with an annual salary, shown in the draft or offer, that is not less than the remuneration provided for by the national collective bargaining agreement (contratto collettivo nazionale di lavoro, ‘CCNL’).

In addition, in point 4, the circular reiterates the worker’s rights and limitations on him/her, after he/she has obtained the EU Blue Card, namely:

• for the first 12 months of residence, he/she must carry out the highly qualified activity for which he/she has obtained the authorisation exclusively for the employer who made the request. It is possible to change employer within the 12 months’ period subject to authorisation from the Territorial Labour Inspectorate;
• during a period of unemployment, the worker has the right to seek and take up employment in accordance with Article 27-quater;
• he/she may, in parallel with the highly qualified activity for which he/she is employed, engage in self-employment, in accordance with the provisions of Article 27-quater, paragraph 13-ter.

When the highly qualified worker has obtained the authorisation and the entry visa from the Italian diplomatic corps in the country of origin, he/she has the right to work immediately upon arrival in Italy, even before being summoned to the Immigration Desk to sign the work permit employment contract (contratto di soggiorno). The employer must still send the mandatory prior notice of the establishment of the employment relationship (so-called “Unilav”).

In relation to the simplified procedure, the circular refers to the provisions of Article 27-quater, paragraph 8 of the Consolidated Immigration Act and provides that if the employer has signed with the Ministry of the Interior, after consulting the Ministry of Labour and Social Policies, a specific memorandum of understanding in which it guarantees the existence of the requirements for the application of the procedure, in that case the employer does not need to file a request for authorisation, but can instead file a draft employment contract or binding offer for the non-EU worker. In this case, the highly qualified worker will be issued a residence permit within 30 days of the notification, during which he/she will be able to stay in Italy and work.

A further change favouring international mobility within the EU concerns workers already holding a valid EU Blue Card issued by other Member States. These workers are allowed to enter and stay in Italy without a visa for work purposes for a maximum of 90 days within a total of six months, provided that they declare their presence in Italy to the Police Headquarters (Questura) within eight working days of entry.

If the holder of an EU Blue Card issued by a Member State has been legally resident in the same State for at least 12 months, he/she may enter Italy, without the need for a visa, to perform highly qualified work for more than 90 days, subject, in this case, to the filing of the request for authorisation. The period of legal residence in the other State required for entry into Italy is reduced to six months if the worker comes from a second Member State where he or she had already arrived in possession of an EU Blue Card issued by a first Member State.

Finally, the joint circular explains that holders of the EU Blue Card may apply for a family reunification authorisation, with the issuance, at the same time as the EU Blue Card, of a residence permit for family reasons, which can be converted into a residence permit for work (employed or self-employed) or for study purposes, if the requirements are met.

As set out at the outset, further changes have been made through Italian Decree no. 79 of 4 April 2024, issued jointly by the Ministry of the Interior, the Ministry of Tourism and the Ministry of Labour and Social Policies. With this decree, the ministries regulate the methods and requirements for entry and stay in Italy also of highly qualified workers identifiable as “digital nomads” and remote workers.

According to the aforementioned decree, “digital nomads” and remote workers are defined as workers –  self-employed in the first case, employees or collaborators in the second – who carry out highly qualified work through the use of technological tools that allow them to work remotely, independently or on behalf of companies, regardless of whether they are resident in Italy or not.

Continue reading the full version published on Norme e Tributi Plus Diritto del Il Sole 24 Ore.

For further information on this topic, see also:

• New social security agreements between Italy-Albania and Italy-Japan: updates 
• Cross-border workers: new agreement between Italy and Switzerland on taxes and remote working effective from 1 January 2024 (Norme e Tributi Plus Diritto – Il Sole 24 Ore, 14 February 2024 – Andrea di Nino, Valentino Biasi)
• National Labour Inspectorate: transnational posting and document retention burden – HR Capital

The Italian Revenue Agency, with its answer to request for ruling no. 89/E of 11 April 2024, returns to the issue of taxation applicable to gifts to employees.

The facts of the case

In the case in question, the company provided its employees with a free drink each day, a bag of coffee per month and was considering the possibility of giving employees promotional items, such as mugs or pins with the company logo, for parties or promotional launches. In the request for ruling, the applicant company clarified that the purpose of the gifts was in line with its corporate marketing strategy: firstly, to promote employees’ product knowledge to ensure better customer service and, secondly, to promote the company’s image on the market.

The Italian Revenue Agency’s decision

The Italian Revenue Agency, while recognising that the gifts in question are connected to the corporate strategy, considered that these gifts – although offered to all employees in the workforce regardless of their sales and work performed – satisfy the individual worker’s specific needs and, therefore, constitute his/her enrichment. The gifts, according to the Agency, cannot therefore be considered as payments made in the employer’s exclusive interest.

In light of this interpretation, if the value of the assets granted in the case in question exceeds the exemption limit for “fringe benefits” – generally equal to EUR 1,000 for 2024, raised to EUR 2,000 for workers with children who are dependent for tax purposes – the same will constitute employment income.

For more information about Fringe Benefits, see the article referred to below:

• 2024 Budget Law: employment initiatives – HR Capital

The European Directive 2022/2464/EU (Corporate Sustainability Reporting Directive), which came into force on 5 January 2023, is part of the European Green Deal and aims to promote transparency and disclosure of information by companies on the environmental, social and governance-related (ESG) impacts of their activities, through enhanced corporate reporting obligations. In this regard, the so-called ‘Relaunch Decree’ (Decreto rilancio) (Italian Decree-law no. 34/2020, converted into Italian Law no.77/2020) introduced the concept of ‘Mobility Management’ into our legal system, i.e. the promotion of sustainable mobility, as well as the management of private transport demand by changing user attitudes and behaviour.

The legislation currently applies to public bodies and private companies with more than 100 employees per location, with offices in cities with a high risk of air pollution, for which there is also an obligation to appoint a ‘Mobility Manager’ who to produce an annual ‘Home-Work Travel Plan’ for employees, aimed at reducing the use of individual private transport and better organising working hours to limit traffic congestion.

The question addressed to the Italian Revenue Agency

In this regard, the Italian Revenue Agency, a few months before the deadline for the implementation of the aforementioned directive, scheduled for 6 July 2024, has provided Answer no. 74/E of 21 March 2024 providing clarification on the possibility of using sustainable mobility services for the home-work-home commute as part of a company welfare plan, through the use of an App.

The question addressed to the Italian Revenue Agency concerned a company that was considering creating an App to enable employees to access sustainable mobility services, such as car-sharing, bike-sharing, scooter-sharing, electric scooters and others. The App would be used for home-work-home commutes, to optimise and reduce, in terms of environmental sustainability and greater road safety, the social costs and individual transport costs linked to the employees’ commute. In line with these purposes, the applicant clarified that sharing services should only be used where the place of work is in urban or metropolitan areas, allowing the transport to be shared with other users. Charging the use of services to the employer and setting a ceiling for expenditure would allow the quantification of usage and ensure that it would be limited to the home-work-home commute.

The applicant’s question concerned the possibility of including the use of the App, granted to categories of employees or to the majority of employees, among the welfare initiatives excluded from taxation under Article 51, paragraph 2, letter f) of the Italian Income Tax Consolidation Act (Testo unico delle imposte sui redditi, ‘TUIR’).

In its reply to the applicant, the Italian Revenue Agency set out the guidelines to be followed so that services granted to employees can be excluded from employee income in accordance with the provisions of Article 51, paragraph 2, letter f) of  TUIR.

Conditions for the implementation of welfare plans

The Agency pointed out for the exclusion from employee income to apply, the benefits and services granted to employees must firstly (i) be granted to the majority of employees or categories of them, (ii) relate exclusively to disbursements in kind and not to disbursements in lieu of money, and (iii) pursue the specific social utility purposes referred to in Article 100, paragraph 1 of TUIR. In addition, employees using the services must be totally unconnected to the financial relationship between the company and any third-party service provider.

The Italian Revenue Agency had provided guidelines on this point in the past with answer no. 461 of 31 October 2019, confirming that the provisions of Article 51, paragraph 2, letter f) of TUIR also included benefits in kind granted to employees through the company car-pooling service, which could be used through an IT platform and was provided by the employer through a specific contract with a third party. The aim of the service was, in fact, to reduce social and individual costs related to the home-work-home commute, while at the same time increasing employees’ punctuality with respect to working hours and promoting socialising, which also benefitted company work productivity. 

In line with the position already confirmed, the Italian Revenue Agency therefore reiterated that where an employer provides its employees with an App for accessing sustainable mobility services for the home-work-home commute, as part of a corporate welfare plan, this falls within the purposes of ‘social utility’ identified by Article 100, paragraph 1 of TUIR, and that such services may be considered non-taxable in accordance with the provisions of Article 51, paragraph 2, letter f) of TUIR provided that the conditions described above are fulfilled.

On 22 March 2024, Confcommercio, Filcams Cgil, Fisascat Cisl and Uiltucs Uil signed the agreement to renew the National Collective Bargaining Agreement (contratto collettivo nazionale di lavoro, ‘CCNL’) for employees of Tertiary, Distribution and Services Companies, effective from 1 April 2023 to 31 March 2027.

Leave for women who are the victims of abuse

In addition to wage increases and benefits such as supplementary health care and permanent contracts, the agreement addresses the increasingly topical issues of gender equality, fair distribution of family burdens, and support for women who are victims of gender-based abuse.

In this regard, implementing Article 24 of Italian Legislative Decree no. 80/2015, Article 16-bis of the new agreement recognises the right of female employees of public or private employers included in ‘protection pathways’ related to gender-based abuse to take leave from work for a maximum period of 90 days. For the purposes of exercising this right, the employee, except where it is objectively impossible, is required to give the employer at least seven days’ notice and, furthermore, to produce the certification confirming her inclusion in the pathways in question.

During the leave period, the woman is paid an allowance corresponding to her last salary, paid in advance in her pay packet by the employer on behalf of the Italian National Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) (in line with the payment of maternity benefits).

The period of leave is taken into account for the purposes of accruing seniority, holidays, and for the purposes of accruing additional months’ pay and severance pay (trattamento di fine rapporto or T.F.R.).

Leave for women who are victims of abuse may be taken, over a three-year period, on a daily or hourly basis (the latter is allowed at half the average daily working hours for the month immediately preceding the month in which the leave starts).

If further conditions are met, the leave period may be extended for a further 90 days, with entitlement to payment of an allowance equal to 100% of the current salary.

In addition, the employee has the right to change her employment relationship from full-time to part-time, and both vertically or horizontally within the organisation, and also to apply for a transfer to another place of work, even if located in another municipality.

Parental leave

To promote gender equality as well as the fair distribution of family burdens, the parties to the agreement agreed new provisions on parental leave.

In particular, it should be remembered that, to reconcile workers’ rights with the company’s organisational needs, Italian Legislative Decree no. 151/2001 (the Consolidated Law or Testo Unico, ‘TU’) introduced a notice period under which, to take the leave, the parent is required to give his or her employer at least 15 days’ notice.

In the new agreement renewing the CCNL Commerce, this notice period has been reduced to five days, unless this is objectively impossible.

Finally, it should also be noted that, under Article 34 of Italian Legislative Decree no. 151/2001, both working parents are entitled to the period of parental leave which may be shared between them. This leave may be taken during the first 12 years of the child’s life and may not exceed a total of 10 months, which may be increased to 11 months if the working father uses the leave for a period of at least three months.  

Currently, the period for which the working parent will receive their salary is nine months: in the first month the parent will receive 80% of salary and in the second 60% (increased to 80% for 2024 only) provided that:

• the leave periods are taken after 1 January 2024;
• the leave is taken before the child is six years old; 
• the period of maternity or, alternatively, paternity leave ended after 31 December 2023. 

Otherwise, the parent will receive 30% of salary for the remaining period.

On 22 March 2024, Confcommercio, Filcams Cgil, Fisascat Cisl and Uiltucs Uil announced that they had signed the agreement to renew the National Collective Bargaining Agreement (contratto collettivo nazionale di lavoro, ‘CCNL’) for employees of Tertiary, Distribution and Services Companies. Among the changes to the new contract, applicable from 1 April 2023 to 31 March 2027, there is a salary increase connected to the various levels and divided for each year of the CCNL’s term; the first tranche of the increase will be paid from April 2024.

In addition, provision has been made for the payment of a lump sum, also linked to the various levels, which is to be paid in two equal tranches in July 2024 and July 2025. This amount will be attributed according to the length of the employment relationship as well as the actual work provided in the period from 1 January 2022 to 31 March 2023.

In addition to salary increases, in compliance with the provisions of Italian Decree-Law no. 48/2023 (the so-called “Employment Decree”), the parties to the CCNL intervened on the issue of fixed-term employment contracts, identifying the reasons that allow their use for more than 12 months.

Finally, particular attention was paid to the issues of gender equality and the fight against abuse against women through the provision of simplifications on the methods of taking parental leave and, also, through the provision of specific leave for women who are the victims of abuse.

On 26 March 2024, Andrea Di Nino will participate, as a speaker, in the webinar organised by AISOM entitled: “Expats and Reversing Brain Drain”.

FOCUS

The following topics will be covered during the webinar:

• Contributions in more than one EU Member State: the provisions of the EC Regulations;
• Changes for workers in countries which have signed a convention with Italy and countries that have not;
• International aggregation and contributions purchase: useful tools for obtaining a pension;
• The ‘case’ of Great Britain[ED1] ;
• Foreign supplementary pensions;
• Transfer/Liquidation and taxation Applied.

You can find all the information you need to register for free at this link.

Italian Decree-Law no. 19/2024, published in the Italian Official Gazette no. 52 of 2 March 2024, amended the regulations which had applied since 1 July 2007 – following the entry into force of Italian Law no. 296/2006 (the 2007 Budget Law) – in relation to the Certificate of Contributions Compliance (Documento Unico di Regolarità Contributiva, ‘DURC’) and the use of the contributory and regulatory benefits subject to it.

The first relevant change affects Article 1, paragraph 1175, of Italian Law no. 296/2006, with respect to which the regulations provided for the possibility of benefiting from regulatory and contributions’ relief in the field of employment and social legislation only subject to the employer’s possession of the DURC, without prejudice to the other legal obligations and compliance with the multi-level applicable agreements and collective agreements, entered into by the most representative employers’ and workers’ trade unions at national level.

In addition to what was previously provided for, the new provision expressly emphasises what was already partly and implicitly indicated in paragraph 1176 which referred to irregularities in the safeguarding of working conditions that are not considered to be an obstacle to the issuance of the DURC itself, i.e. there must not be any breaches of employment and social legislation, including the absence of breaches relating to the safeguarding of working conditions and health and safety in the workplace, as identified by a specific decree of the Italian Ministry of Labour and Social Policies.

New paragraph 1175 bis, highlights the condition precedent generated by the DURC being non-compliant, confirming the right to receive the benefits provided for in paragraph 1175 in the event of compliance with the contribution and insurance obligations and remedying the ascertained breaches referred to in the same paragraph 1175, within the terms provided for by the supervisory bodies. An exception is made for administrative breaches that cannot be remedied, for which the recovery of the benefits granted may not be more than double the amount of the penalty for non-compliance.

The introduction of the new paragraph is of considerable importance: it appears to try to overcome the difficulties encountered to date in non-compliant companies’ use of contribution benefits, granting, on the one hand, those who proceed to regularise their contribution and insurance position and health and safety breaches within the specified deadlines the possibility of continuing to enjoy them, and, on the other hand, in the case of administrative breaches which cannot be remedied, the recovery of the benefits paid out to which the companies concerned will be subject will not be more than double the penalty.

In resolution no. 59/E/2024, the Italian Revenue Agency (Agenzia delle Entrate) clarified the application of tax relief for performance bonuses under Article 1, paragraph 182 of Italian Law no. 208 of 2015, with specific reference to the requirement of improved performance against company targets.

Article 1, paragraphs 182 to 189 of Italian Law no. 208 of 2015 (the “2016 Budget Law”) provides for the application of a tax substituting personal income tax (imposta sul reddito delle persone fisiche – IRPEF) and related regional and municipal surcharges on “variable performance bonuses, the payment of which is linked to increases in productivity, profitability, quality, efficiency and innovation, which are measurable and verifiable on the basis of the criteria defined by the decree referred to in paragraph 188”. This substitute tax is 10%, up to a maximum of EUR 3,000 gross.

Italian Law no. 197 of 29 December 2022 (the “2023 Budget Law”) subsequently amended this provision with Article 1, Paragraph 63, which stipulates that for bonuses and amounts paid during 2023, the substitute tax rate is reduced to 5%. Similarly, Italian Law no. 213 of 30 December 2023 (the “2024 Budget Law”) extended the application of the provision for bonuses and amounts paid during 2024; therefore, the 5% rate applies to these amounts for the current year as well.

With regard to the performance criteria to which the company objectives for the payment of performance bonuses must be anchored, the decree of the Ministry of Labour and Social Policies of 16 March 2016 refers to the definition in the company or area collective bargaining agreement, which must contain “criteria for measuring and verifying increases in productivity, profitability, quality, efficiency and innovation, which may consist in an increase in production or savings in production costs or in the improvement of the quality of products and processes, including through the re-organisation of non-overtime working hours or the use of remote work as a flexible way of carrying out the employment relationship, with respect to a reasonable period defined by the agreement, the achievement of which can be objectively verified through specifically identified numerical or other indicators”.

Therefore, the improved performance must be “measurable and verifiable”, and consequently it is necessary to identify criteria for measuring the achievement of improved performance through objectively verifiable numerical (or other) indicators identified for this purpose.

In view of the above, for the purposes of applying the substitute tax, it is necessary that, over a period of time defined in the agreement, improved performance in at least one of the objectives of productivity, profitability, quality, efficiency and innovation mentioned above is found and, in addition, that this improvement can be verified and measured.

In this regard, Circular no. 5/E of 2018 clarified that to qualify for the tax relief, it is sufficient that the company achieve an improvement in only one of the productivity, profitability, quality, efficiency and innovation objectives identified in the contract, within an appropriate period predefined by the parties.

The Circular also clarified that “appropriate period” means the accrual period of the performance bonus, or the time period identified by the agreement at the end of which the improved performance against the objectives must be verified. The duration of the appropriate period is left to the second-level bargaining agreement and may be annual, mid-year or multi-year.

The resolution of 19 October 2018, no. 78/E, later clarified that – for the purposes of applying the tax benefits – it does not appear to be sufficient that the objective set by the second-level bargaining agreement is achieved, it is also necessary that the company’s performance has improved compared to its performance prior to the beginning of the bonus accrual period.

In the question considered by the Italian Revenue Agency’s resolution of 5 March 2024, clarification was sought on the tax regime applicable to the amounts paid as a performance bonus in view of the reduction in the number of holidays days untaken as of 31 December compared to the previous year (resulting in a reduction in the related business cost). In this circumstance, however, the “holiday parameter” criterion, while objectively achieved, was not explicitly stated in the company’s supplementary agreement as a condition for bonus payment.

In fact, the supplementary agreement made payment of the performance bonus conditional not on the achievement of improved performance, but on the attainment of stipulated figures, consisting partly of “collective company objectives” and partly of “functional/individual objectives”, without therefore providing for any verification of the attainment of improved performance.

In conclusion, the Italian Revenue Agency – with the answer under discussion – ruled that in this case the performance bonus is not eligible for the tax relief, as:

“The rule under consideration requires (…) that the following conditions concurrently exist:

1. the achievement of set goals is linked with payment of the bonus;
2. improved performance compared with that recorded in the previous year is verified and measured.

These conditions are not fully met by all the objectives outlined above.”

According to research by HR Capital, in 2023 remote working was adopted by 60% of companies with more than 50 employees and an internal HR structure (-15% vs 2022).  In less structured companies, the percentage drops below 40%.

Milan, 12 March 2024 – The possibility of working remotely has now established itself as one of the useful factors in making the workplace more attractive, both in attracting new talent and retaining those already in force. Remote working is now perceived by workers as a way of working that promotes both a work-life balance and, at the same time, a work ethic based on objectives. 

After initial and widespread use of remote working– a consequence above all of the pandemic and post-pandemic landscape, during which the possibility of working remotely five days a week was often guaranteed – today, however, we seem to be witnessing a slowdown, if not an actual halt, in the use of this tool.  

This is the picture that emerges from research by HR Capital – a subsidiary of De Luca & Partners and leader in outsourced personnel management and administration services – on the current state of remote working policies by employers.  

According to the study¹, conducted by HR Capital on client companies, in 2023 60% of the most structured companies – i.e. with a workforce of at least 50 people and a department dedicated to human resources – now allow remote working. Among those that are less structured – i.e. that do not meet the conditions mentioned above – the percentage drops below 40%. Both values are down compared to 2022, with a more marked decline for large companies (-15%). 

Despite the affirmation of remote working in the employment field, compared to previous years, the numbers therefore record a slowdown in the advance of its use: from the immediately post-pandemic period to today, in fact, remote working has often been regulated in a restrictive way, especially in large companies – the same ones that had initially made greater use of it. 

“The data show how the entrepreneurial culture of our country still tends to consider the possibility of working from home as an alternative tool to the use of holidays and permits or as a normal additional benefit, without taking into account the advantages that, in practice, can derive from it, including the reduction of costs for the company, the well-being of workers and the possibility of increasing their productivity”, notesAndrea Di Nino, Employment Consultant at HR Capital. “The research”, Di Nino continues, “has also underlined that the latest provisions aimed at workers with children and, even more so, those aimed at so-called vulnerable workers have proven to be complicated to manage from an operational point of view, often increasing the mistrust of companies that are less structured with respect to this tool”.  

The regulatory framework of reference in the Italian legal system is Italian Law no. 81/2017, which considers remote working to be a specific way of performing work, based, among other things, on the alternation between ‘face-to-face’ and remote work. The use of remote working is subject to the signing of an agreement between employer and employee and, in this regard, Article 23, first paragraph of the same law provides that the employer must provide electronically to the Ministry of Labour and Social Policies the names of the workers who will work remotely, as well as all the related details, through the special ‘Servizi Lavoro’ (Work Services) platform. 

On the subject, in recent years, there have been a number of legislative interventions (most recently, the conversion into law of the so-called “Milleproroghe Decree”) which have further extended some of the ‘emergency’ rules established by the COVID regulations. In particular, the right to remote working has been extended to workers with children under 14 years of age until 30 June 2024, as well as for workers who, based on the assessment of the company doctor as part of the exceptional health surveillance introduced during the COVID period, are more exposed to the risk of contagion from the virus (so-called ‘vulnerable workers’).

Press release:

Labitalia – Adnkronos Group