Italian Tax Reform: first step for 2024 approved

The Italian government confirmed the revision of the IRPEF rates for 2024 – merging the first two – in implementation of the tax delegation.

This initiative provides a tax benefit of €260 per year for taxpayers.

The IRPEF (personal income tax) rates from 4 become 3:

  • 23% for incomes up to 28,000 euros;
  • 35% over 28,000 euros and up to 50,000 euros;
  • 43% over 50,000 euros. 

The Government has introduced a tightening of deductions with an allowance of €260 for those with incomes over €50,000 – except for liberal donations to non-profit organizations, humanitarian, religious or secular initiatives, in favour of parties or for Third Sector entities.

Holders of business income and exercising arts and professions are granted a maxi-deduction at 120% of the cost of labour for new hires with open-ended contracts made in 2024.

Finally, the ACE (Aid to economic growth), an important tax relief provided for companies that rewards those who reinvest profits in the company for tax purposes, is cancelled. It was introduced in 2011 to help strengthen the capital structure of companies and the Italian production system.