IRPEF Reform

New Income Taxation

We inform you that the Revenue Agency, with circular no. 2/E of February 6, 2024, has provided the first clarifications regarding Legislative Decree no. 216/2023, implementing the first module of the reform of personal income taxes and other measures relating to income taxes. Below are the main changes.

Adjustment of tax rates and income brackets

For the year 2024, the gross Irpef tax is calculated applying the following rates:

  1. a) 23% for incomes up to €28,000;
  2. b) 35% for incomes exceeding €28,000 up to €50,000;
  3. c) 43% for incomes exceeding €50,000.

Modification of deductions for employee and assimilated work

For the year 2024, the deduction provided for in Article 13, paragraph 1, letter a), first sentence, Tuir, for taxpayers with income from employment, excluding pensions and allowances equivalent thereto, and for certain income assimilated to employment, if the total income does not exceed €15,000, is raised from €1,880 to €1,955. The no tax area will go up to EUR 8,500.

Supplementary treatment

Taxpayers with a total income not exceeding 15. 000 euro, the supplementary treatment may be granted when the gross tax, to be determined on employee income, referred to in Article 49, with the exclusion of those indicated in paragraph 2, letter a), Tuir, and on income assimilated to employee income, referred to in Article 50, paragraph 1, subparagraphs a), b), c), c-bis), d), h-bis) and l), Tuir, is higher than the deduction due pursuant to Article 13, paragraph 1, Tuir reduced by the amount of EUR 75 in relation to the period of work in the year.

Revision of the rules on tax deductions

For taxpayers with a total income exceeding EUR 50,000, a reduction of EUR 260 is envisaged in the amount of the deduction from the gross tax due for the year 2024, determined pursuant to Article 15, paragraph 3-bis, Tuir, in relation to

  1. a) the charges for which the deduction of the expenses incurred is set at 19% by the Tuir or any other tax provision; the provision does not apply to the healthcare expenses referred to in Article 15(1)(c) of the Tuir
  2. b) liberal donations in favour of political parties referred to in Article 11, Decree-Law 149/2013, converted, with amendments, by Law 13/2014
  3. c) disaster risk insurance premiums referred to in Article 119, paragraph 4, fifth sentence, Decree-Law 34/2020, converted, with amendments, by Law 77/2020.

Adjustment of the discipline of regional and municipal additional taxes on IRPEF

Regions and municipalities will have more time to adjust additional taxes to the new brackets.

Social security exemption for working mothers in the 2024 Budget Law

With the recent Budget Law 2024 (L. 213/2023), the Legislator has provided for two distinct and temporary forms of exemption from the payment of social security contributions for working mothers with specific characteristics.

These provisions are summarised below

  • an exemption of 100% of the share of social security contributions payable by working mothers of 3 or more children, with an employment relationship of indefinite duration, until the month in which the youngest child turns 18, for pay periods from 1 January 2024 to 31 December 2026 (three years);
  • a similar exemption is also provided for working mothers of two children, with a permanent employment relationship, until the month in which the youngest child turns ten, but only for the pay period from 1 January 2024 to 31 December 2024 (annual).

This benefit takes the form of a total abatement of the social security contribution, to be paid by the worker, up to a maximum of €3,000 per year, to be apportioned on a monthly basis.

The provision also specifies that the application of the aforementioned exemption does not affect the rate at which pension benefits are calculated.

In response to these provisions, the Inps, in its Circular No. 27/2024, has provided some operational indications.

In order to benefit from the exemption, it is necessary to have an employment relationship with an indefinite term, whether already established or being established, during the period in which the relief is in force. This concession applies in the public and private sectors, including the agricultural sector, with the sole exclusion of domestic work relationships.

An important distinction between the two operating hypotheses, in addition to the different duration, concerns the eventual moment of termination of the benefit: in the case of female workers with three children, it is the month in which the youngest child turns eighteen; in the case of female workers with two children, it is the month in which the youngest child turns ten.

In relation to the maximum exemption ceiling, which is set at €3,000 per year, it is indicated that the maximum threshold of the monthly exemption will therefore be €250 (€3,000/12), while for employment relationships established or terminated during the month, this threshold should be re-proportioned by taking as a reference the measure of €8.06 for each day of use of the exemption from contributions. For part-time relationships, on the other hand, no reproportioning will be carried out. Also in the case of part-time work, the employee, who holds more than one employment relationship, will be able to avail herself of the exemption in question for each relationship.

The Institute, on an operational level, points out that the fulfilment of the requirement, for the working mother, must be understood as being fulfilled at the time of the birth of the third (or subsequent) child. In a similar manner, but with reference to the second child, is the requirement for the worker mother of two children.

It is specified that apprenticeship relationships also fall within the scope of the measure, since such relationships must be considered, ex lege, as an employment contract of indefinite duration.

In the case of the conversion of a fixed-term employment relationship into an open-ended contract, the exemption may legitimately be applied from the month of the conversion into an open-ended contract.

The relief in question does not constitute State aid and is therefore not subject to authorisation by the European Commission and registration in the National State Aid Register. Moreover, this facility can be cumulated with the exemptions concerning the employer’s contribution, provided for by the legislation in force, as it is structurally alternative to the exemption on the share of social security contributions provided for the generality of workers (6 or 7%).

Also in operational terms, it is indicated that public and private female workers, who are entitled to the exemption, may notify their employer of their wish to avail themselves of the facility in question, by informing the same employer of the number of children and the tax codes of 2 or 3 children.

The employer, by filling in the individual monthly reports with the information on the tax codes of 2 or 3 children (if the worker is the mother of more than 3 children, it is sufficient to indicate 3 tax codes, including the tax code of the youngest child), will allow the Institute to carry out the necessary checks. The worker is given the possibility, as an alternative, to communicate directly to the Institute the information concerning the children’s tax codes; this possibility is allowed by means of a special application which the worker can fill in by entering the children’s tax codes.

Medical examination after sick leave of more than 60 days

Please be advised that the Commission for Interrogations on Occupational Health and Safety established at the Ministry of Labour (Article 12, Legislative Decree 81/2008), with Interrogation No. 1/2024, has provided important clarifications on health surveillance following the absence of the worker for more than 60 days for health reasons, as regulated by Article 41, paragraph 2, letter e-ter), Legislative Decree 81/2008. Lgs. 81/2008, and in particular whether a person, even if not exposed or reported to be exposed to any occupational risk (chemical, biological, mechanical and for VDT use), must be visited after 60 days of absence for illness.

The Ministry of Labour, after recalling the applicable rules and recent case law guidelines on the subject, considers that only workers subject to health surveillance must undergo a medical examination upon return from an illness of more than 60 days (Article 41, paragraph 2, letter e-ter), Legislative Decree 81/2008), in order to verify their suitability for the job.


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