The 2020 Budget Law (Law 160/2019) introduces, among others, new tax provisions concerning some items related to the composition of income from employment.  These new regulations, however, will impact the 2020 pay slips at different times.

Company car benefit

It should be remembered that in the case of an employee using a company car for mixed business and private purposes or for private purposes only, the legislation identifies this as a benefit, subject to the relevant taxation and contribution.

In this specific case, the new Law establishes the amount of the benefit provided for a mixed use of the car, i.e. for both work and private purposes (article 51, paragraph 4, letter a), Tuir), which shall change starting from July 1, 2020.  For contracts executed up to 30 June 2020, therefore, the old rules shall apply.

Specifically, the abovementioned law currently provides for the benefit to be valued at “30 per cent of the amount required for the set mileage of 15 thousand kilometres, calculated on the basis of the cost per kilometre that can be inferred from the national tables of the Automobile Club of Italy“.

This provision shall change completely in the second half-year of 2020, with the amount of the benefit calculated according to carbon dioxide emissions per kilometre (g/km of CO2).

The text of the new law can therefore be summarised as follows:

Types of vehicles identified on the basis of their carbon dioxide emissions per kilometre (g/km of CO2) Value of the benefit
Carbon dioxide emissions not exceeding 60 g/km Value equal to 25% of the amount paid for a set mileage of 15,000 km.
Carbon dioxide emissions exceeding 60 g/km but not exceeding 160 g/km Value equal to 30% of the amount paid for a set mileage of 15,000 km.
Carbon dioxide emissions exceeding 160 g/km but not exceeding 190 g/km Value equal to 40% for 2020 and 50% starting from 2021 of the amount paid for a set mileage of 15,000 km.
Carbon dioxide emissions exceeding 190 g/km Value equal to 50% for 2020 and 60% starting from 2021 of the amount paid for a set mileage of 15,000 km.


As can be seen, under the new scheme the benefit will remain unchanged only for vehicles with carbon dioxide emissions of more than 60 g/km, but not 160 g/km, while for vehicles with emissions not exceeding 60 g/km the benefit shall even entail a 25% reward.  The penalty, on the other hand, will apply to vehicles that exceed emissions of 160 g/km, or 190 g/km, for which there will be a one-step increase between the second half of 2020 and 2021.

These new provisions, which show a clear focus on environmental protection, will, however, bring some complications for operators, who will have to assess the emission class the car belongs to in order to calculate correctly, on the basis of the data found in the documents of the relevant vehicle.

Changes concerning luncheon vouchers

The recent Budget Law also amended Article 51, paragraph 2, letter c) of the Consolidated Law on Income Tax (Tuir), which previously stated that paper luncheon vouchers for a daily value of 5.29 Euro or electronic luncheon vouchers  for a daily value of 7 Euro were not to be considered as income from employment.

As of 1 January 2020, the new provision provides for the non-taxation of “employee meals paid for by the employer as well as those served in canteens organized directly by the employer or managed by third parties; the benefits in lieu of meals up to a total daily amount of € 4, increased to € 8 if they are granted in electronic form; indemnities in lieu of meals paid to workers at construction sites, other temporary work facilities or production units located in areas where there are no catering facilities or services, up to a total daily amount of 5.29 Euro“.

There is, therefore, a two-fold innovation regarding the daily values of the single meal voucher which, pursuant to the law, will not be included in the taxable income and in the calculation of social security contributions:

  • for paper meal vouchers, the daily non-taxable value of the individual voucher drops from 5.29 to 4 Euro;
  • for electronic meal vouchers, which were already enjoying a favourable tax treatment, the aforementioned value increases from €7 to €8.


The 2020 Budget Law (Law 160/2019), published in Official Gazette no. 304/2019, O.S. no. 45, provides for certain incentives to the hiring of young workers. Pending the issuing of appropriate instructions by INPS, here are the main peculiarities of such incentives.

Social security contributions for Level 1 apprentices

The law introduces a specific incentive for employers who employ nine or fewer people and hire young people between 15 and 25 years of age in 2020, under a level 1 apprenticeship contract based on professional qualification and diploma, upper secondary education diploma and certificate of higher technical specialisation.  The contribution allowance granted is 100% of amounts due for the first 3 years of the contract.  All this without prejudice to the 10% contribution rate for the years following the third.

Incentive to the hiring of young people under 35

With a special provision, the exemption from the payment of the relevant social security contributions in case of recruitment of young people under 35 hired for he first time with an open-ended employment contract is extended to the whole of 2020.  The exemption is intended for all employers, entrepreneurs and non-entrepreneurs.  The incentive, introduced by the 2018 Budget Law, existed with regard to the hiring of young people under 30 and was extended for 2018 to those under 35.  The Budget Law, in addition to providing the extension for hires made by December 31, 2020, also implements in full the payment exemption provided for companies that have expanded their workforce in 2019, as provided for in the so-called  Dignity Decree, whose full implementation, however, was subject to the issuance of a specific Ministerial Decree, which was never issued.  With regard to how to recover such contributions, a circular by Inps dealing with it is expected.

Please remember that an exemption from the payment of social security contributions amounting to 50% of the total social security contributions due is recognized for a maximum of 36 months, without prejudice to the rate of calculation of pension benefits, to be paid by employers, excluding premiums and contributions due to Inail, up to a maximum of € 3,000 per year, reviewed and applied on a monthly basis.  As already mentioned, in order for the employer to be able to be eligible for the incentive, the new hire, must never have been hired under an open-ended contract either by other employers or by the same one doing the hiring.  The incentive is also recognised in the event that a previous fixed-term contract is turned into an open-ended contract, provided that this is done before the employee is 35 and, of course, provided that such contract is the first open-ended contract for the worker.  As in the case of all subsidized hirings, in this case too, the employer must comply with the ordinary conditions required by current legislation, i.e. application of the National Collective Bargaining Agreement, at least as far as the economic and regulatory parts are concerned, fairness and compliance with social security payment obligations and with the principles set out in Article 31 of Legislative Decree  150/2015.

Youth excellence bonus

In this case, the Budget Law 2020 did not extend the incentive provided for employers who hire young people with excellent academic achievements on an open-ended basis (or turned the employment relationship into an open-ended one), but only provided rules for carrying out checks on it, thus concretely promoting the implementation of what had already been introduced by the 2019 Budget Law. As you may recall, the incentive was granted to private employers who hired, between 1 January 2019 and 31 December 2019, young people with a master’s degree with a mark of 110 and honours, obtained between 1 January 2018 and 30 June 2019 before turning  30 and within the official duration of the course.

In addition to this, the benefit is also granted in the case of young people who obtained a PhD in the same period of time before they are 35 year of age.

The incentive provides for the exemption for employers from making the relevant social security payments for a maximum period of 12 months, starting from the date of hiring, up to a maximum amount of of 8,000 Euro.   In order to be eligible, employers will have to respect comply with the provisions for hiring people under 35 years of age, in addition to being subject to the Community rules on so called “de minimis”  aid.


Article 1, paragraph 13, of the 2020 Budget Law amended the provisions on the additional 1.4% NASpI contribution due in case of workers employed on a fixed term basis.

First of all, Article 2, paragraph 28 of Law 92/2012, was amended by adding the following words at the end:  “, as well as in the cases referred to in paragraph 29″.  This provision clarifies that the 0.5% increase in the social security contributions due in case of renewal of the fixed-term contract does not apply to domestic work and to all other cases mentioned in paragraph 29.

This last paragraph is then supplemented by 3 other cases, that shall therefore be also excluded from the 1.4% additional contribution scope  as of 1 January 2020, concerning:

  • workers hired on a temporary basis to carry out the seasonal activities defined by the national, territorial and company collective agreements executed in the territory of the Province of Bolzano by the comparatively most representative workers’ and employers’ organisations not later than 31 December 2019;
  • workers referred to in Article 29, paragraph 2, letter b) of Legislative Decree No. 81/2015, i.e. workers employed with so-called  “non standard working hours” (3 days) in tourism and public accommodations and temporary port work (Article 17, Law 84/1994).

In addition to these cases, the contribution is not due for:

  • workers hired on a temporary basis to replace absent workers;
  • workers hired on a temporary basis to carry out the seasonal activities referred to in Presidential Decree 1525/1963;
  • apprentices;
  • civil servants.


The Tax Decree introduced some important innovations regarding the methods and procedures to be followed for the filing of F24 models containing tax credits used for offsetting.  In particular:

  • credits relating  to income taxes and IRAP (including surcharges and substitute taxes) exceeding Euro 5,000  can  be  used  as  set-off  payments  only after filing the income tax return from which they originate. Previously, this obligation concerned only offset VAT credits;
  • the scope of tax credits that can be offset upon submission of  the  F24  form  exclusively  through  the electronic services of the Italian Tax Authorities was widened.  More precisely, this method of filing the F24 form must also be adopted when offsetting credits accrued as substitute taxes and for offsets carried out by persons who do not have a VAT number.

In order to clarify the new requirements, the Inland Revenue issued Resolution no. 110/E/2019, the main features of which are set out below.

  • Obligation of prior filing of income tax returns from which credits originate

Credit offsets classified in the following categories (see attached table) are subject to prior filing of the income tax returns or requests from which they originate:

  • substitute taxes;
  • income taxes and surcharges;
  • IRAP;

Credits can  be  used  as  set-off  payments  only after the  tenth  day following the filing of the income tax return or request from which they originate with the Inland Revenue Service.

The obligation exists only when the relevant credits offset in a specific tax year (reference year) exceed the total amount of Euro 5,000, including those offset in previously filed F24 forms.

For the purposes of verifying that the limit of €5,000 per year is exceeded, similarly to what has already been specified in other Inland Revenue procedural documents, only credit offsets that must necessarily be shown in the F24 model are considered.

The INS experts specify that this rule will not apply to income tax and related surcharges, income tax substitute taxes and IRAP credits accrued in relation to the 2018 tax period.  In particular, credits accrued in the 2018 tax period may be offset, without the obligation of prior submission of the relevant income tax returns, until the deadline for submission of the 2019 income tax returns; any residual credits of the previous tax period will have to be “regenerated” within the 2019 tax period.

For VAT credits, of course, the obligation of prior submission of the statement or request from which the credit emerges also exists for the tax year 2018.

This is without prejudice to the current provisions on the compliance of the statement from which the offset credit emerges.

  • Obligation of filing the F24 form exclusively through the electronic services of the Italian Tax Authorities.

With regard to the obligation for all taxpayers to use the electronic filing services made available by the Revenue Agency for the filing of F24 forms containing offsets of tax credits, and given the specific regulatory reference also to “credits accrued in the form of substitute tax“, it should be specified that such obligation also exists for the filing of F24 forms that show the offsetting of credits typical of withholding agents: recovery of withholding tax surpluses, 80 Euro bonuses and refunds from tax assistance granted to employees and pensioners.  In short, all taxpayers and withholding agents are required to file their F24 forms through the electronic filing services of the Inland Revenue Service, provided they contain credit offsets identified with the codes included in the attached table and falling in the following categories:

  • substitute taxes;
  • income taxes and surcharges;
  • IRAP;
  • VAT;
  • incentives and credits filed in box RU of the income statement;
  • withholding agents.

On this topic, it should be remembered that,  as already mentioned, the F24 form can be filed using the electronic filing services of the Inland Revenue Service:

  • directly by the taxpayer or withholding agent, using the “F24 web” or “F24 online” services;
  • through an authorised professional.

There is no obligation to file electronically when the credit inclusion in the F24 form is simply an alternative way of breaking such credit down directly from the tax liability paid in the same F24 model.

Irrespective of the type of offsetting carried out, the obligation to submit “zero balance” F24 forms exclusively through the electronic filing services made available by the Inland Revenue Service remains unchanged.

Our office remain at your disposal for any further information.

De Carlo Arianna – 

Head of Payroll Department

LDP provides Tax, Law and payroll  scalable and customised services and solutions. LDP Professional have also matured a significant expertise in  M&A, Corporate Finance, Transfer Price, Global Mobility Consultancy and Process Automation. 

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