Article 1, paragraphs 436–444, of Law No. 207 of December 30, 2024 (Budget Law 2025) introduces a new tax incentive for 2025, the so-called “IRES Premiale,” aimed at all corporate entities, and specifically at companies and entities referred to in Article 73, paragraph 1, letters a), b), and d) of the Italian Income Tax Code (TUIR), namely:
- Joint-stock companies (S.p.A.), limited partnerships with share capital (S.a.p.A.), and limited liability companies (S.r.l.);
- Cooperative and mutual insurance companies;
- European companies (SE) and European cooperative societies (SCE) resident in Italy;
- Public and private entities other than companies, whose primary or exclusive purpose is to carry out commercial activities;
- Non-resident companies and entities of any type, including trusts, with or without legal personality, that have a permanent establishment in Italy.
>> LEGGI GLI ARTICOLI DI LDP PER RIMANERE AGGIORNATO SULLE ULTIME NOVITÀ
Definitions
The “IRES Premiale” is applicable exclusively in the tax period following the one ending on December 31, 2024. This means it applies to the 2025 tax year for calendar-year taxpayers (with reporting in the 2026 tax return) or, for instance, to the period from April 1, 2025, to March 31, 2026, for companies closing their financial year on March 31, 2025.
Tax Incentive
The incentive provides for a reduced corporate income tax (IRES) rate of 20% for companies that:
i) allocate at least 80% of their 2024 profits to reserves,
ii) reinvest in “Transition 4.0” and “Transition 5.0” capital assets, and
iii) carry out new hires, in compliance with specific conditions.
To qualify for the reduced rate, companies must meet the following requirements:
- Profit Allocation: At least 80% of the net profit for the 2024 fiscal year must be allocated to a dedicated reserve. It remains unclear whether mandatory reserves should be included in this computation. The provision explicitly refers to a “specific reserve,” suggesting it will have a dedicated entry in the company’s balance sheet liabilities.
- Investment in Capital Assets:
- A minimum of 30% of the allocated profits (and at least 24% of 2023 profits) must be used for investments in newly acquired capital assets (either directly or via financial leasing). These investments must relate to “Transition 4.0” and “Transition 5.0” tangible and intangible assets, as defined in the relevant legislation, and must be utilized in production facilities within Italy. The minimum investment threshold is set at €20,000.
- Employment Stability:
- The company’s workforce, as measured using the Annual Work Units (AWU) method, must not decrease in 2025 compared to the average workforce for the 2022–2024 period.
- New Hires:
- Companies must hire new permanent employees in an amount of at least 1% of the workforce as of December 31, 2024, with a minimum of one new hire.
The reduced 20% IRES rate applies to the entire taxable business income reported in the 2026 corporate tax return for the 2025 fiscal year.
Key Considerations
Several aspects of the new tax regime require further clarification, including:
- Temporary Nature of the Incentive: The incentive currently applies only to the 2025 tax year.
- Exclusion of Newly Established Companies: Companies incorporated in 2024 or 2025 may be ineligible, as they lack a 2023 profit benchmark for comparison.
- Anti-Avoidance Measures: The requirement to consider 2023 profits prevents companies from artificially reducing 2024 profits to qualify for a higher benefit. The investment requirement is set at a minimum of 30% of the profits allocated to reserves in 2024, but not less than 24% of 2023 profits.
Eligible investments must meet the following criteria:
- They must be included in Annexes A and B of Law No. 232/2016 and Article 38 of Decree-Law No. 19/2024.
- They must be tangible or intangible capital assets.
- They must be newly acquired.
- They must be used in production facilities located in Italy.
The investments must be made between January 1, 2025 (the law’s effective date), and the deadline for filing the 2025 corporate income tax return.
Forfeiture of the Incentive IRES Premiale 2025
Two primary scenarios trigger the loss of the tax benefit, as outlined in Article 1, paragraph 438, of Law No. 207/2024:
- If the reserved 80% of 2024 profits is distributed within the second tax year following 2024 (i.e., by December 31, 2026, for calendar-year taxpayers).
- If the acquired capital assets are disposed of—either domestically or internationally—or are assigned to non-productive activities within five years.
Conclusions about IRES Premiale 2025
There are still many uncertainties regarding the scope and application of the “IRES Premiale” regime. The business community is awaiting the issuance of an implementing decree, along with clarifications from the Italian Revenue Agency.
