In December, the Draft Law no. 1264, also known as the “DDL Lavoro” was officially approved.
Some of the main legislative updates include measures concerning fixed-term contracts, “de facto” resignations, and remote work. Let’s take a general overview.

The new rules on administration exclude from the 30% limit of fixed-term employees those hired on a permanent basis by employment agencies, as well as seasonal workers, those over 50, those employed in start-ups or to replace absent employees.

As for “de facto” resignations, if a worker is absent without justification for more than fifteen days, their contract will be automatically terminated without requiring online resignation formalities, unless the absence is due to force majeure or employer-related issues.

Probation periods for fixed-term contracts have also been redefined: for contracts up to six months, probation ranges from 2 to 15 days, while for contracts longer than six months but under twelve, it ranges from 2 to 30 days.

Regarding remote work, employers are required to report employees’ details to the Ministry of Labor electronically within five days from the start of the remote work period.

Finally, from January 1, 2025, it will be possible to pay off contribution debts to INPS and INAIL in up to 60 monthly installments, provided they have not been assigned to Revenue Agents, with specific methods and requirements defined by ministerial decree.

Granting benefits in kind remains one of the most strategic compensation policies that companies can adopt. However, it seems they have yet to achieve widespread implementation. This is according to a study conducted by HR Capital—a subsidiary of De Luca & Partners and a leader in outsourced personnel management and HR services—which analyzed how widely benefits kind are adopted by companies.

Specifically, the research found that 60% of the surveyed companies—primarily large, well-structured organizations—have integrated benefits in kind into their compensation strategies, often in synergy with corporate welfare programs. On the other hand, the remaining 40% of the sample has shown greater hesitation in adopting these strategies due to the additional costs involved, which, despite favorable tax conditions, remain significant, particularly for small and medium-sized businesses.

Compared to 2023, there has been a 10% increase in the number of companies introducing or enhancing their compensation policies with benefits in kind. In most cases, these have taken the form of providing employees with company cars for mixed personal and professional use or offering health coverage through insurance policies.

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In Message No. 3748, dated November 11, 2024, INPS provided clarifications on the re-employment of workers or the continuation of an employment relationship after the individual has begun receiving pension benefits.

What Is the Contribution Cap?

The contribution cap is a mechanism introduced by the pension reform enacted under Law No. 335 of August 8, 1995, specifically Article 2, paragraph 18. It establishes a limit on the gross taxable income of employees that is subject to pension contributions. This threshold is set annually and currently stands at €119,650. The cap applies to workers who did not have any credited social security contributions for any reason before January 1, 1996.

The contribution cap has two primary effects:

1. Limit on Contribution Calculations: Once the annual cap is reached, neither the employer nor the employee is required to pay pension-related “IVS” contributions on income exceeding the threshold.
2. Limit on Pension Calculations: Pension benefits are calculated only on income up to the cap. This means that any annual income exceeding the threshold is not considered in determining the pension amount.

In summary, for workers subject to the contribution cap, pension contributions are calculated only up to the specified limit. Consequently, income above this threshold does not impact the future pension amount.

Status of “Old Enrolled” vs. “New Enrolled”

INPS clarified in its message that the date of initial enrollment in mandatory pension schemes is a key factor in verifying the proper fulfillment of contribution obligations by employers.

The contribution cap applies only to workers without any social security contributions credited before January 1, 1996, or to those who opted for the contributory pension system. It does not apply to individuals with contributions accrued before this date.

Contribution Cap for 2024

The contribution cap is updated annually based on ISTAT’s consumer price index. For 2024, the cap for workers subject to the contributory system has been set at €119,650.

Re-employment of Retired Workers

Regarding the re-employment of individuals after retirement, INPS reiterated the position of the Ministry of Labor and Social Policies: re-employment following the receipt of a pension does not nullify the worker’s original status as an “old enrolled”. Therefore, the date of initial enrollment in mandatory pension schemes remains valid for applying the rules established by Article 2, paragraph 18, of Law No. 335 of 1995, regardless of whether the individual has begun receiving pension benefits.

Special Considerations for Self-Employed Re-employed Workers

The Ministry further clarified that if a retired individual begins a freelance activity requiring enrollment in a professional body regulated by Legislative Decrees No. 509 of 1994 or No. 103 of 1996, the activity will be governed by the specific rules established by the relevant professional body.

In its response to Inquiry No. 218, dated November 6, 2024, the Revenue Agency revisited the tax treatment of group insurance policies provided to employees, with a particular focus on policies covering the risk of death (commonly referred to as life insurance policies).

The inquiry examined whether it is possible to apply both (i) the general exemption threshold for fringe benefits under Article 51, paragraph 3 of the Italian Income Tax Code (TUIR)—set at €258.23 annually but increased to €1,000 for 2024, or €2,000 for employees with at least one dependent child for tax purposes—and (ii) the 19 percent deduction for expenses from gross tax liability under Article 15, paragraph 1, letter f) of the TUIR, which applies to insurance premiums covering the risk of death or permanent disability of at least 5 percent from any cause.

In its query, the employer, acting as the tax withholding agent, argued that employees should be able to claim the 19 percent deduction on the value of life insurance premiums, even in cases where these policies, owing to the temporarily increased fringe benefit exemption limit for the current year, are classified as “exempt” and therefore excluded from the taxable income of the employees receiving them. This interpretation is based on the absence of explicit provisions within the regulations governing the increased fringe benefit exemption limit that either confirm or deny this possibility.

Revenue Agency’s Guidance

The Revenue Agency, in response to the inquiry, provided guidance on the tax and social security treatment of insurance policies. First, it referred to Circular No. 326 dated December 23, 1997, addressing the “harmonization, rationalization, and simplification of tax and social security provisions concerning employment income and similar types of income.” Section 2.1 specifies that premiums paid by the employer for health, life, and non-occupational accident insurance, among other benefits in kind provided to employees, are included in taxable employment income, explicitly excluding premiums for occupational accident insurance.
Additionally, the Revenue Agency highlighted the exemption outlined in Article 51, paragraph 3 of the Italian Income Tax Code (TUIR), which states that such benefits in kind—such as non-occupational accident, life, and permanent disability insurance policies—”are not included in taxable income if their total value does not exceed €258,23 during the tax year; if this threshold is exceeded, the entire amount is considered taxable.” This provision acknowledges the possibility that employers may offer goods and services to employees without charge, allowing these to be excluded from taxable income up to a certain limit, which is currently set at €1.000 or €2.000, depending on specific conditions. The tax authority emphasized that when fringe benefits are exempt from taxation because they fall below the statutory threshold, the total value of all benefits provided to the employee during the same tax year must still be considered. This includes benefits from multiple employment relationships, if applicable.

The Revenue Agency then turned to the determination of deductions for expenses under Article 15, paragraph 1, letter f) of the TUIR: “From gross tax liability, a deduction of 19 percent is allowed for the following expenses incurred by the taxpayer, provided they are not deductible when calculating the individual incomes that contribute to total taxable income: […] f) premiums for insurance policies covering the risk of death or permanent disability of at least 5 percent from any cause, or the inability to perform daily living activities, provided the insurance company cannot terminate the contract […]”.

In this context, the Agency cited Resolution No. 391 of 2007, reiterating that “to claim a deduction for an expense under Article 15, paragraph 1, letter f) of the TUIR—such as premiums for a group life insurance policy taken out for employees—the expense must have been incurred by the taxpayer and actually borne by them. Consequently, if the premiums were paid by the employer, they can only be deducted under the above provision if their amount was included in taxable income.”

Based on the Agency’s opinion, life insurance premiums provided to employees that fall within the exemption threshold for fringe benefits in the relevant year may only be deducted at 19 percent from the gross tax liability of the employees if these amounts are included in their taxable employment income. The temporary increase in the exemption threshold for 2024 to €1.000–€2.000, compared to the €258,23 stated in the TUIR, does not affect this principle.

Deductible Expenses – Policies for Risk of Death and Permanent Disability

In light of the topics discussed here and the upcoming year-end processes, when employers and tax withholding agents will need to perform tax adjustments on income from employment and similar sources received by their employees and collaborators, it is worth recalling an important detail regarding the 19 percent deduction for expenses related to life insurance and permanent disability policies with a deductible of no less than 5 percent.

Specifically, the deductible premium is capped at €530, with the deduction being progressively reduced—and eventually eliminated—for employees whose total income exceeds €120.000.

On November 13, 2024, Confindustria and Federmanager signed the renewal agreement for the NCLA for Industrial Executives, introducing several new provisions effective from 2025.

Firstly, the minimum salary for executives will increase to €80,000 in 2025 and to €85,000 in 2026, compared to the current €75,000.

Additionally, by March 2025, a one-off payment of 6% of the gross annual salary received by the executive in 2024 must be provided by employers to cover the 2024 period.

Regarding variable compensation, starting from January 1, 2025, it will become mandatory to adopt an MBO (Management by Objectives) system. Companies will need to implement variable compensation systems for executives tied to specific goals or results.

Finally, the cost of supplementary pension contributions due by employers will increase: the Previndai rate paid by the company will rise from 4% to 6%, applicable up to a maximum annual salary of €200,000.

INPS, with its message no. 3662 of 5 November 2024, has provided clarifications regarding the new platform for the verification and interactive management of social contribution compliance, also known as “V.e.R.A.”. 

The platform is a novelty that allows companies to know in advance the contribution situation of their company and thus the relevant Single Document of Contribution Regularity (i.e. “DURC”), in order to ensure full social contribution compliance. 

With the “Ve.R.A./Simulation DURC” procedure, specifically, the company’s legal representative and its intermediary can consult the company’s possible debt exposures and the simulation of the automatic procedure of compliance. 

At this time, the data on the platform only relate to the Private Employees’ management; however, INPS has specified that it will progressively allow similar implementations for the other managements. 

Available sections and technical specifications 

The “Ve.R.A.” procedure consists of two sections: 

– Regularity Verification (“Ve.R.A.”), 

– DURC simulation. 

The first one is functional for the management of all evidence and information that may require the activation of regularization procedures of social contribution, regardless of their relevance to the issue of the DURC. In particular, it sets out in sub-sections the nature of the taxpayer’s debts and their status, in order to allow for the verification of irregularities. 

The second, facilitates the taxpayer and his intermediary in identifying the obstacles to the issue of the automatic regularization of contributions, which, if not addressed in advance, will lead to the issue of an invitation to regularize contributions during the management phase of the regularization procedure within the “DURC Online” procedure. 

The simulation provides the company with three levels of reporting, ranging from optimal to where regulation is required: 

– First level (marked with a green dot): no evidence is available. 

– Second level (identified by a yellow dot): management where there is evidence, even if not relevant to contribution, that needs to be addressed. 

– Third level (marked with a red dot): anomalies to be regularized. 

Management of the service through an intermediary 

If the company decides to delegate the management of the platform to its intermediary, the INPS has specified that a further delegation, known as a “master delegation”, is required and is available on the INPS website. 

On 4 November 2024, almost one year after the entry into force of Legislative Decree no. 209/2023 (hereinafter the “Decree”), Revenue Agency Circular no. 20/E has been issued to provide the first operating instructions regarding the new criteria for determining tax residence contained in Chapter I of the Decree. 

Decree no. 209, which implements Legislative Decree no. 111 of 2023, has revised the rules on the tax residence of individuals, companies and entities not related to companies, provided for respectively in articles 2 and 73 of the Consolidated Income Tax Law (hereinafter “TUIR”), to bring these rules into line with international practice and with the conventions signed by Italy in order to avoid double taxation, as well as coordinating the same rules with the provisions on permanent establishments and with the tax regime applicable to employees working remotely. 

To analyze what the new legislation has introduced with regard to individuals, it is first necessary to point out the principle laid down in article 3 of the TUIR on taxation, according to which (i) residents in Italy are taxed in our country on all income, wherever generated (without prejudice to the application of double taxation conventions), whilst (ii) non-residents are taxed only on income generated in Italy. 

The new concept of domicile 

Based on this principle, the first important amendment provided for by Article 1 of Legislative Decree no. 209/2023 concerns the amendment of paragraph 2 of Article 2 of the TUIR, which introduces a completely new criteria for determining tax domicile, according to which “for the purposes of income tax, natural persons shall be deemed to be domiciled if, for the greater part of the tax period, including fractions of a day, they have their domicile within the meaning of the Civil Code or are resident or present in the territory of the State. For the purposes of this provision, the place of residence shall be the place where the person’s personal and family relationships are primarily developed. Unless proven otherwise, persons who are registered in the census of the resident population for the greater part of the tax period are also presumed to be resident”. 

Prior to this provision, which according to the Revenue Agency’s circular will enter into force on 1 January 2024, the amended article 2 of the TUIR provided that individuals who, for the greater part of the taxable period (i.e. 183 days in a year, 184 days if it is a leap year), were alternatively: (i) registered in the register of residents, (ii) had their domicile in Italy, and (iii) had their residence in Italy, were considered resident for tax purposes and therefore subject to taxation on all income, wherever generated.  

Therefore, first of all, the concept of domicile has been modified, no longer based on the civil law definition (which returns it to the place where the taxpayer has established the main seat of his business and interests), but now identified as “the place where the taxpayer’s personal and family relations are principally developed”, a definition, moreover, consolidated by international practice and double taxation treaties, to which our domestic legislation had to be adapted. 

Registration with the population registry office: the new relative presumption  

What has also changed is the value of registration with the resident population registry office, which has now become a relative presumption for determining tax residence, as it can be rebutted if the taxpayer is able to prove – notwithstanding registration with the registry office – that he has no habitual abode or domicile in Italy or that he is not physically present in Italy for most of the tax period.  

In this regard, it should be recalled that the requirement of registration with the population registry office determined, under the previous legislation, an absolute presumption that could not be rebutted by demonstrating the absence of the above-mentioned requirements.   

Finally, the Revenue Agency reiterates – in continuity with what was already provided for in the previous legislation – that for the purposes of determining the permanence in the State for the “greater part” of the tax period, non-consecutive periods are also relevant, provided that they add up to at least 183 – or 184 in the event of a leap year – days in the course of a calendar year. 

Remote work under the new provisions  

A further reference contained in Circular no. 20 of 4 November, concerns the tax rules to which workers who perform remote work are subject (i) both in cases in which they perform work from Italy for a foreign employer, for which the stay in Italy for 183 days (184 in leap years) will determine the tax residence in our country, with the consequent taxation in Italy of the income wherever produced (subject to the possible application of double taxation conventions), (ii) in the case of workers working for a foreign employer for at least 183/184 days, who will still be considered tax resident in Italy if they meet one of the other three requirements of the new Art. 2 paragraph 2 of the TUIR: (i) civil residence, (ii) domicile in Italy or (iii) registration in the resident population registry. 

Finally, the Revenue Agency reiterates the effectiveness of the new rules with effect from the tax period following the issuance of Decree 209, i.e. from 1 January 2024, specifying that the application of the new principles will also be relevant for the purposes of the new inbound workers regime in force from 2024. 

The document equivalent to the credit license is valid only if provided for by the country of origin and telematic requests might jeopardize the assessment of requirements.

The transition period during which companies and self-employed workers could apply for the credit license by submitting the self-certification form via PEC (certified email) ended on October 31, 2024.

From November 1, the release of the credit license in digital format will only occur upon the submission of the telematic application on the INL portal, along with a declaration from the company confirming compliance with the requirements for obtaining the credit license as in Article 27, paragraph 1, of D.lgs n. 81/2008.

Continue reading the full article on Norme e Tributi Plus Lavoro De Il Sole 24 Ore.

Law no. 143, published in the Gazzetta Ufficiale on 8 October 2024, which converted Legislative Decree no. 113 of 9 August 2024, the so-called “Omnibus Decree”, confirmed the introduction of the long-awaited €100 bonus, the payment of which, initially scheduled for January 2025 in the form of the “Befana Bonus”, was subsequently brought forward to the thirteenth month’s salary and recognized as the “Christmas Bonus”.

The Bonus in question, set forth in Article 2-bis of Decree-Law no. 113, provides that, together with the thirteenth month’s salary, a “one-off” allowance of €100 is to be paid for the year 2024, in proportion to the period of work performed by the worker, subject to the presence of certain economic and family conditions identified on the basis of specific criteria set forth in Revenue Agency Circular (i.e. “Agenzia delle entrate”) no. 19/E of 10 October 2024.

Recipients and requirements

The recipients of the “Christmas Bonus” are workers who are employed in 2024 (including apprentices, intermittent workers and homeworkers) and who – jointly – meet the following requirements:

• a total income for the 2024 tax year not exceeding €28,000 net of the income deriving from the property unit used as their main home and its pertinences, pursuant to Article 10 c. 3-bis of the Consolidated Income Tax Act (i.e. “TUIR”),
• the presence of a spouse who is not legally and effectively separated, with at least one child, even if born out of marriage, recognized, adopted or foster child, both of whom are tax dependent, or alternatively, in the case of a so-called single-parent household, the presence of at least one tax dependent child,
• a gross tax, determined on income from employment, exceeding the deductions due under Article 13, paragraph 1 of the TUIR.   

In addition to the above conditions, which are already summarized in Article 2 -bis of Decree Law no. 113, the Revenue Agency Circular provides further clarification regarding each of the requirements, specifying in particular that:

• for the purposes of the income requirement, it is clarified that “total income” does not only mean the income received from employment, but also any income subject to the flat-rate tax, income from self-employment and, in the case of employees working in accommodation facilities and public establishments, any income received from tips given by customers. The circular also clarifies that if the beneficiary benefits from tax relief, such as the special regime for expatriate workers (L.58/2019, Legislative Decree no. 209/2023), the part of the income considered exempt from the calculation of withholding tax is also relevant for the verification of the income requirement,
• with regard to family status, a single-parent household is considered to exist in the following cases: (i) non-recognition of the child by the other parent, (ii) loss of the other parent, (iii) adoption or custody of the child by the only parent entitled to the bonus. In this regard, the circular specifies that marriage cohabitation with the non-parent partner of the child does not exclude the eligibility for the bonus.

How to obtain the Bonus

In order to receive the bonus, interested employees must submit a written statement to their employer confirming that they jointly meet the eligibility requirements and provide the tax code of their spouse and dependent children or, in the case of a single parent household, the tax code of the dependent children only.

According to the indications contained in the Circular no. 19/E, if the worker has had more than one employment relationship during the year, the request for the Bonus should be submitted to the last employer, i.e. the one who will actually pay the “one-off” payment with the additional monthly payment of December 2024.

In cases where the employee has more than one part-time employment relationship, the Bonus will be paid by the employer identified by the employee, upon submission of the appropriate statement supplemented with information concerning: (i) the income received under other employment relationships and (ii) the days worked for the other employers.

Given that the bonus is paid at the same time as the 13th month’s salary, if the 13th month’s salary is paid separately from the month of December 2024, it will be up to the employer to verify the existence of the income requirement and, if not, to recover the allowance previously paid.

A further redetermination of the Bonus will take place at the time of the 2025 tax return, where the allowance in question may be recognized or recovered depending on whether: (i) the worker, despite having been entitled to it, did not receive the Bonus in 2024 due to a failure to submit the request or in the absence of the withholding agent, (ii) the total income resulting from the declaration exceeds the income threshold of €28,000.

The measure of the Bonus

The allowance, which amounts to a total of €100 net as it is tax-free, is not subject to any reduction in the event of short-time working, does not contribute to the calculation of total income and, in the case of employment lasting less than one year, will be reproportioned on the basis of the period of employment during 2024. In the case of several employment relationships performed at the same time, the days included within this period will be counted only once.

In its Circular no. 90 of 4 October 2024, the INPS has provided the long-awaited clarifications on the amendments to the penalty regime for social security contribution irregularities contained, in particular, in Article 116 of Law no. 388/2000, introduced by Legislative Decree no. 19/2024.

The amendments, which has come into force on 1 September 2024, concern in particular the civil penalties applicable in the event of irregularities in the payment of contributions, omissions due to regulatory uncertainties and spontaneous regularization by the employer.

Civil sanctions for omission and contribution evasion

Contribution omission, provided under Article 116 (paragraph 8, lett. a) of Law no. 388/2000, occurs in the event of non-payment or delayed payment of contributions or premiums, whose amount is determinable from the compulsory reports and/or registrations submitted within the statutory deadline.

In this respect, the above-mentioned decree has modified the civil sanctions regime provided for by article 116, paragraph 8, letter a) of Law no. 388/2000, relating to the non-payment or late payment of pension contributions, providing that “the surcharge shall not apply if the contributions or premiums are paid within one hundred and twenty days, in a single instalment, spontaneously and before any dispute or request by the tax authorities”. The legislator’s intention is to extend the institution of voluntary settlement, already provided for in cases of evasion of contributions, to cases of non-payment of contributions, in order to facilitate and accelerate the credit recovery.

Without prejudice to the ordinary measure of a civil sanction equal to the official reference rate increased by 5.5 points per year, up to a maximum of 40 per cent of the amount due, in order to encourage compliance, it introduced a facilitating measure whereby, if payment is made in a single instalment within one hundred and twenty days of the legal due date, in a spontaneous manner, i.e. before any disputes or requests by the tax authorities, the 5.5 points increase in the official reference rate does not apply.

Article 116 (paragraph 8, lett. b) of Law no. 388/2000 establishes that the hypothesis of tax evasion arises in the case of non-payment of contributions or premiums due in connection with registrations, reports or compulsory declarations that have not been submitted or that are not truthful.

With regard to the civil sanctions applicable in this case, if the taxpayer does not spontaneously take steps to regularize his/her situation regarding the obligation to pay contributions, the provision provides, without any change with respect to the previous regime, for a sanction equal to 30 per cent of the amount of the contributions or premiums not paid on the due dates established by law, on an annual basis, up to a maximum of 60 per cent of the amount due.

On the other hand, in the case of the active regularization “i.e. ravvedimento operoso”, already regulated by the second part of Article 116 (paragraph 8, lett. b) of Law no. 388/2000, has been subject to a rescheduling of the deadlines for the payment of the contributions due. In fact, it is confirmed the provision according to which, in the event of a report made spontaneously, prior to disputes or requests by the tax authorities, of the debt situation within twelve months of the deadline for the payment of contributions and premiums, the civil penalties for evasion are downgraded to an omission calculated at the official reference rate increased by 5.5 points if the payment is made as a lump sum within the term of thirty days from the notification and, furthermore, the further provision is introduced that, where the payment is made as a lump sum within the longer term of ninety days from the notification, the measure of the civil sanctions due is equal to the official reference rate increased by 7.5 points.

For both omission and evasion of contributions, INPS clarifies that the new rules introduced by the decree are applicable with respect to contribution violations related to periods starting from 1 September 2024.

Civil sanctions for omissions resulting from regulatory uncertainties

The decree under review also amended the regime of civil sanctions in the event of non-payment or late payment of contributions or premiums due to regulatory uncertainties and, in particular, in relation to conflicting case law or administrative guidelines on the recurrence of the obligation to pay contributions, subsequently recognized in judicial or administrative proceedings.

The provision for a sanction equal to the official reference rate increased by 5.5 points, with the application of the ceiling of 40% on the amount of contributions or premiums not paid by the legal deadline, which will continue to apply until the end of the accrual period in August 2024, has been replaced by the lower amount consisting only of the legal interest pursuant to Article 1284 of the Italian Civil Code, provided that the contributions or premiums are paid within the deadline set by the tax authorities.

In this case too, the changes are effective as of 1 September 2024.

Regularization agreed with the INPS

The taxpayer who regularizes anomalies, omissions and errors, in the manner and within the terms that will be defined by an appropriate resolution of the Institute’s Board of Directors, shall be liable to pay a civil sanction:

• in case of contribution omission, equal to the official reference rate and, in any case, not exceeding 40 per cent of the contributions or premiums not paid by the due date,
• in the event of contribution evasion, equal to the official reference rate increased by 5.5 points and, in any event, not exceeding 40 per cent of the contributions or premiums not paid by the statutory due date.

The Court of Cassation expresses its opinion on the role of the figurative contribution in achieving the requisite for access to retirement. 

The Court of Cassation, in its recent sentence no. 24916, published on 17 September 2024, has ruled on the subject of pension benefits, expressing its opinion on the role of imputed contributions in achieving the requisite access to retirement. 

The fact 

The case in question concerned an appeal by a worker to the Supreme Court following the decision of the Court of Appeal of Lecce, in judgement no. 39 of 24 January 2002, in favour of a measure taken by the Social Security Institute (i.e. “INPS”) to the detriment of the plaintiff. 

The appellate judges, in sentence no. 39, had in fact considered as correct the rejection of the application for an early retirement pension submitted by the worker pursuant to Law no. 214 of 2011, since she did not meet the actual minimum contribution requirements for access to the pension, in view of the presence of figurative contributions due to periods of sickness and unemployment in the amount of the contributions accrued by the applicant. The Court of Appeal thus pointed out the absence of the 35 years of effective contributions required by the old legislation for early retirement, a provision which, according to the judges, is still in force. 

Against the decision of the second instance, the employee appealed to the Court of Cassation. 

The worker challenged the decision on the grounds of infringement of Article 24, paragraphs 10 and 11, of Decree-Law no. 201 of 6 December 2011, converted into Law no. 214 of 2011, known as the “Monti-Fornero” reform, arguing that what the territorial judges had provided for was not contained in the above-mentioned legal provision and that the reform had modified the conditions for access to the early retirement scheme. 

The reasons of the decision 

Law no. 214 of 2011, as the Court of Cassation’s ruling states, radically changed the old-age and seniority pension systems in force until then and intervened in the second case by introducing stricter limits on access to the pension treatment, which from then on was called “early retirement pension”. 

In this respect, Article 24 (paragraph 10) of Law no. 214 provided that, from 1 January 2012, in the absence of the normal age requirements for access to the old-age pension, the right to an early retirement pension would be granted only if the contribution period was 42 years and one month for men and 41 years and one month for women, regardless the type of contribution accrued, whether as a result of effective payment or merely as a figurative contribution. The provision also provided for a gradual increase in the number of months of pensionable service for the years following the entry into force of the law, as a result of the adjustment of the pension requirements to the increase in life expectancy, pursuant to Article 12 of Decree-Law no. 78 of 31 May 2010, converted into Law no. 122 of 30 July 2010. 

The second provision referred to, i.e. paragraph 11 of Article 24, regulates the new conditions of eligibility for the early retirement pension for workers whose first contribution credit comes into effect after 1 January 1996, recognizing their right either (i) on completion of the contribution period referred to in paragraph 10 above, or (ii) on reaching the age of 63, provided that at least 20 years of effective contributions have been paid and credited to the insured person and that the amount of the first pension instalment is not less than a certain minimum monthly amount, revalued annually, and in any case not less than 2.8 times the monthly amount of the social allowance fixed for the reference year. 

The Supreme Court, after analyzing the legal provisions governing early retirement, found nothing that could lead to the exclusion of the figurative contribution from the contribution requirement for entitlement to a pension and upheld the worker’s arguments, stating that (i) “the exclusion of the figurative contribution within the scope of application of paragraph 10 (as relied on by the “INPS”) would have little justification and would lead to a substantial non-application of the case, (ii) “moreover, on the basis of the literal criterion of interpretation of the provisions in question, the worker’s request for an early retirement pension on the basis of the additional calculation of the notional contribution accrued appears to be well founded, since only paragraph 11 requires the effective contribution, whereas paragraph 10 is silent”. 

The Court of Cassation ruled that the contribution requirement for access to the early retirement pension under Article 24, paragraph 10, of Law no. 214 of 2011, consisting of a contribution period of 42 years and 10 months for men and 41 years and 10 months for women, is also supplemented by the figurative contribution, confirming also that the requirement of 35 years of actual contributions under the previous legislation does not apply to the new system reformed by the so called “Fornero” Law. 

With regard to the judgment under review, nothing has changed relating to the contribution requirements provided for in Article 24 (paragraph 11) in the case of access to early retirement pension by persons with contribution years prior to 1 January 1996, set at 20 years, in this case of actual contributions, and the retirement age now raised to 64 years. 

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During the Covid-19 pandemic, there has been a significant increase in the use of remote working. We provide an overview of regulatory developments and the positive impact of this way of working, including national protocols and international agreements, such as the one between Italy and Switzerland, and the tax implications for cross-border workers.

Especially during the Covid-19 pandemic, remote working has revolutionized the world of work. In Italy, this modality was formally introduced by Law No. 81 of 2017, but its diffusion has raised new regulatory challenges, especially in the tax field.

This is an overview of the main Italian and European tax regulations that need to be known for an optimal management of remote working, with a focus on international agreements and the implications for cross-border workers.

Remote working in Italy

Remote working was introduced into the Italian legal system by Law No. 81 of 22 May 2017, which aimed to regulate a different way of carrying out work activities, while increasing the competitiveness of companies and supporting employees in the balancing of work and private life, thanks to technological advances in the work environment.

The increase in remote working during Covid

However, as is well known, remote working saw its greatest use and spread during the pandemic of Covid-19, a period when forced closures and distancing made this mode of working the only one possible for many businesses.

The persistence of remote working in companies, even after the end of the state of emergency, and the increasingly widespread use of remote working show its benefits, not only in terms of improving the quality of life of employees, but also in terms of environmental sustainability and collective well-being.

The legislative provisions

Therefore, in response to the increased use of remote working, the legislator has also intervened by introducing a series of provisions aimed at simplifying and facilitating the use of this working modality. For example, fragile workers (i.e. “lavoratori fragili”) and parents have long had the right to use remote working without having to sign an agreement with their employer, or, at an operational level, the simplification of the way in which individual agreements are notified to the Ministry of Labour, as well as the simultaneous inclusion of remote working in national and second-level collective labor agreements.

The “National Protocol on remote working” in the private sector

The “National Protocol on remote work” in the private sector is of particular importance in this respect: it was signed on 7 December 2021 by the Ministry of Labour and the social parties, aiming to set out the guidelines to be implemented through national, company and territorial collective labor agreements for the proper management of remote work, in accordance with the legal framework and collective agreements.

The key points of the Protocol are: (i) the completely voluntary nature of the Protocol in companies making use of it, without any disciplinary measures being taken against workers who do not adhere to it, (ii) the requirement of the signing of an individual agreement between the parties, employer and employee, for the performance of remote work, in accordance with Law No. 81 of 2017, (iii) the recognition of the right for remote workers to disconnect, (iv) protection in terms of health and safety, (v) equal treatment in terms of regulations and remuneration with respect to colleagues who perform the service exclusively within the company premises.  

With the growth of remote working at European and international level, it was felt that there was a need for joint intervention by the countries concerned to better regulate, especially regarding tax treatment, the simultaneous performance of work by remote workers in two or more countries.

Read the full article on Agendadigitale.eu

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From 1 September it will be theoretically possible to hire young people, women without regular paid employment and workers employed in the regions of southern Italy who benefit from the recruitment incentives provided by Law Decree No. 60 of 7 May 2024, the so-called “Cohesion Decree” (i.e. “Decreto Coesione”), converted by Law No. 95 of 4 July 2024.

Among the hiring incentives in force from 1 September 2024, the “Youth Bonus” (i.e. “Bonus Giovani”) provided by Article 22 of the aforementioned Decree is certainly the most awaited, due to the wide range of beneficiaries it addresses.

“Youth Bonus” (i.e. “Bonus Giovani”)

The relief in question, which is of a contributory nature and is called “Bonus Giovani” (Youth Bonus), was introduced with the aim of encouraging an increase in the stable employment of young people and is aimed at private employers who, in the period between 1 September 2024 and 31 December 2025, hire young people under the age of 35 for their first stable employment, i.e. without a previous open-ended employment relationship. Employers who convert fixed-term employment contracts into open-ended contracts are also included in the group of beneficiaries, subject to the age and employment requirements at the time of conversion (under 35 without previous open-ended contracts). The exemption still excludes the recruitment of managerial staff, domestic workers and apprentices.

The two-year relief is available for a maximum of 24 months from the day of recruitment and is equal to 100% of the employer’s contributions up to a maximum of EUR 500 per month. According to Article 22, paragraph 3, this amount is increased to EUR 650 per month if the hiring or conversion to an open-ended contract of under 35s, in their first permanent job, takes place in premises or production units located in one of the regions included in the so-called Single Economic Zone (ZES), the Special Economic Zone for the South of Italy, more precisely Abruzzo, Molise, Campania, Basilicata, Sicily, Apulia, Calabria and Sardinia.

The exemption in question is also granted on a residual basis for the hiring of workers who, at the date of commencement of employment, were employed on an indefinite-term basis by a different employer, which has partially benefited from the contribution relief.

Paragraph 5 of Article 22 of the “Cohesion Decree” (i.e. “Decreto Coesione”) reminds that, in addition to the possession of the DURC certifying the regularity of the employer’s contributions, the use of the exemption is subject to the observance of the general rules for the use of incentives under Legislative Decree No. 150/2015, including the provisions on health and safety at work and the collective agreements applied. In addition to the general principles mentioned above, the provision makes the benefit of the exemption from contributions conditional on the absence of collective or individual dismissals for justified objective reasons in the six months preceding the recruitment in the same production unit where the employment relationship with the young worker begins. At the same time, the same provision provides for the cancellation and recovery of the exemption in the event of dismissals for justified objective reasons of workers recruited with the two-year exemption or of workers with the same qualification, which occur in the six months following the recruitment in the same production unit.

In order to receive the incentive in question, which, as mentioned above, is still hypothetical for the time being, employers will have to wait for the approval of the European Commission and the subsequent instructions from the Inps on the modalities for the use of the relief and the recovery of arrears for the months prior to the Commission’s approval.

Under-30 structural exemption

It is the uncertainty associated to the waiting period for utilisation, as has already happened in the past for the under 36 exemption, that has induced possible beneficiary employers to opt for the under 30 structural exemption, introduced by Law 205/2017, with a similar scope to the Youth Bonus and for a long time present among the structural incentives for hiring workers.

It should be recalled that the above-mentioned three-year exemption provides the possibility for private employers, in the case of permanent recruitment or conversion of fixed-term contracts of young people under 30 in their first stable employment, to benefit from a contribution relief equal to 50% of the employer’s contributions, up to an annual limit of EUR 3,000.

Women’s Bonus (i.e.“Bonus Donne”) and Zes Bonus (i.e. “Bonus Zes unica”)

Among the incentives introduced by the “Cohesion Decree” starting from 1 September 2024, in addition to the Youth Bonus, there are two measures aimed at promoting equal opportunities in the labour market and the development of employment in the southern areas of Italy, called “Women’s Bonus” (i.e. “Bonus Donne”) and “Zes Bonus” (i.e. “Bonus ZES unica”).

The first, provided by Article 23 of Legislative Decree No. 60/2024, is addressed to private employers who, during the period from 1 September 2024 to 31 December 2025, hire on an open-ended basis: (i) women of any age who have not been in regular paid employment for at least six months and who reside in the regions of the Mezzogiorno; and (ii) women of any age who have not been in regular paid employment for at least 24 months and who reside anywhere. The exemption is valid for two years, for a maximum of 24 months, and allows for a reduction in contributions equal to 100% of the employer’s contributions, up to a maximum of EUR 650 per month for each worker.

On the other hand, the Zes Bonus, provided by Article 24 of Decree-Law 60/2024, is directed to private employers with up to 10 employees who, between 1 September 2024 and 31 December 2025, hire workers with a permanent contract, of at least 35 years old, who have been unemployed for at least 24 months and who are employed in one of the offices or production units located in the regions of the Special Economic Zone. The incentive is granted for a maximum period of 24 months, up to a maximum of EUR 650 per month.

As stated in the last paragraph of Article 24 of the “Cohesion Decree”, it will also be necessary to wait for the European Commission’s authorisation in order to benefit from the Zes Bonus contribution exemption.

With message No. 2844 of 13 August 2024, the Italian National Social Security Institute “i.e. INPS” provides some clarifications concerning the method of transmission of requests for exemption from contributions for private sector employers in possession of a gender equality certification.

Contribution relief and certification

Article 5 of Law No. 162 of 5 November 2021 provides an exemption from the payment of 1% of social security contributions, up to a maximum of EUR 50,000 per year for each beneficiary, in favour of private employers who are in possession of the gender equality certification referred in article 46-bis of Legislative Decree No. 198 of 11 April 2006 (hereinafter, “Code of Equal Opportunities for Men and Women”, i.e. “Codice delle pari opportunità tra uomo e donna”), introduced by article 4 of the same law.

Pursuant to the Decree of the Minister for Equal Opportunities and Family Affairs of 29 April 2022 implementing the aforementioned Article 46-bis, the gender equality certification is issued in accordance with the reference practice UNI/PdR 125:2022, by conformity assessment bodies accredited in this field pursuant to Regulation (EC) 765/2008 of the European Parliament and of the Council of 9 July 2008.

The INPS circular No. 137 of 27 December 2022 explained the exemption from contributions introduced by the aforementioned Article 5 and has provided employers with operational instructions, in order to enable them to obtain the exemption measure in question, on condition that they obtain the gender equality certificate until 31 December 2022.

The compilation of the remuneration data in the application form

With regard to the actual compilation of the employer’s application for exemption, INPS had clarified in its previous circulars and notices that the total average monthly wage refers to all the wages paid or to be paid by the employer concerned in order to benefit from the exemption in question, and not to the average wage of each employee. Therefore, it refers to the amount of wages paid or to be paid to all the workers employed by the company.

With this message, and in order to correctly process the applications for exemption of the amount due, INPS has informed the employers who have obtained the relevant certificate by 31 December 2023 and who have incorrectly completed the field relating to the estimated average monthly global remuneration, that they may correct the data entered by withdrawing the application containing the incorrect information.

Once this renunciation has been made, the employer may submit a new application, providing precise information and, in particular, the average monthly total remuneration, to be calculated in accordance with the specified indications.

The abovementioned renunciation and the subsequent submission of a new application must be made, in accordance with the instructions of the Ministry of Labour and Social Policy, before the mandatory deadline of 15 October 2024.

When the deadline expires, all applications in “transmitted” status and relating to certifications obtained by 31 December 2023 will be massively processed by the Institute according to the indications already provided in circular No. 137/2022.

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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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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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