Tax Pills

The last Budget Law, entered into force by 1 January 2024, has introduced many changes specifically tailored for businesses. Some of the most notable new fiscal measures include the following: the definition of a national budget for the SEZ tax credit for the South; the refinancing of the so-called “Nuova Sabatini” and the rearrangement of Development Contracts relating to industrial development projects.

1.8 billion Extra-budget to fund SEZ tax credit – The incentive goes to companies investing in capital goods intended for production facilities located in southern Italy ZES. Particularly, the tax credit favours companies purchasing new capital goods for production facilities located in the regions of Campania, Apulia, Basilicata, Calabria, Sicily, Molise, Sardinia and Abruzzo. The amount of the incentive is up to 20 percent for small companies, 15 percent for medium-sized companies and 10 percent for large companies.

“Nuova Sabatini” – This incentive is a subsidized financing measure designed to facilitate companies' access to credit. Particularly, it aims to improve the competitiveness of the country's productive firms. The measure received a refinancing of 100 million euros with the Budget Law 2024. The New Sabatini, or Industry 4.0, is certainly an excellent fiscal vehicle for companies investing in new equipment, machinery and software. Through the financing, firms can obtain the resources needed for purchases made to innovate firms’ production division.

The more you hire the less you pay Bonus – Thanks to this measure, employers con benefit of higher deductions, from 120 percent up to 130 percent, for permanent hires of young people, women, workers in disadvantaged categories and former citizenship income recipients. The new Budget law has anticipated 1.3 billion to fund the relief.

Industrial development contracts – The Development Contracts, constitutes the main national measure to support the realization of large investments and the implementation of national industrial policies (investments exceeding 20 million euros), whose management is entrusted to Invitalia, the Italian agency entrust for governing and monitoring investments.

Stefano Latini

The Decree on the implementation of the tax reform on international taxation, published on December 28, 2023, in the Official Gazette, has introduced major changes to the connection criteria for determining the tax residency of individuals.
The novelty, in effect from 1 January 2024, clarifies that individuals are considered fiscally resident in the territory of the State if, for the majority of the tax period (i.e., for more than 183 days), taking they alternatively have their domicile in the country, have their residency in Italy or are physically present in Italy. Furthermore, unless proven otherwise, individuals who registered in the record of the resident population for most of the tax period are also assumed as residents.
With reference to the first condition, the Parliament has explicitly specified that registration in the Registry of the Resident Population must be compared, in terms of law effects, to the nature of a relative legal presumption. Therefore, there is always the possibility for the “presumed” resident to demonstrate, through contrary evidence, the actual residency abroad or, in any case, the tax residency outside of Italy.
Another new is the removal of the reference to the civil code in interpreting the concept of domicile. This variation will result in the exclusive relevance of the “place where, primarily, personal and family relationships of the person develop”. Therefore, the Legislature define a precise hierarchy between the different connection criteria privileging the personal and family relationships over economic and work-related interests.
As of 1 January 2024, moreover, the new principle of physical presence within the national borders for the majority of the tax period will be in force.

How the new measure will affect the so-called “impatriati” regime – These novelties, introduced by the Delegated Law for the reform of the tax system, will have a considerable impact in relation to tax advantage regimes provided by the Italian tax law, in particular, to the regime for new residents and on the inbound workers regime. Particularly, all people interested should keep in great consideration the new criterion of physical presence in Italy for the majority of the tax period, which will be sufficient to establish tax residency in the territory of the State, regardless of the significance of personal or economic relationships. At the same time, will be decisive to look at the power to deny tax residency where it is supported solely by the registration.

Stefano Latini