New Tax Decree Draft: Simplifying Benefits and Bonuses for Employees

The Council of Ministers has postponed the arrival of the new legislative decree on tax matters, which was expected to include changes to IRPEF and IRES. The text was supposed to contain provisions regarding benefits for the thirteenth month’s salary and the taxation of productivity bonuses. Specifically, it proposed an allowance of up to 100 euros for employees with a total income not exceeding 28,000 euros in 2024, under certain conditions.

However, the draft decree has been revised to remove some of these conditions. Instead, the allowance will be available to all employees who meet the income criteria.

Additionally, the draft decree now outlines that performance bonuses paid from January 1, 2025, will be subject to a 10% tax within a ceiling of 3,000 euros. This tax is in lieu of personal income tax and additional regional and municipal taxes, and applies to bonuses linked to indicators of productivity, profitability, quality, efficiency, innovation, reputation, and social responsibility.

Furthermore, the draft specifies that temporary early supplementary income (Rita) will only be recognized in cases of employment termination not related to pension requirements starting from January 1, 2025. This change aims to simplify and rationalize the current regulations to encourage wider access to tax measures for employees.

The decree also addresses the need to remove obstacles hindering access to favorable measures for employees. It provides data on the number of workers benefiting from productivity bonuses and streamlines the process of accessing tax measures for these workers. Changes are being made in support of company rewards for employees while ensuring fair rewards without solely focusing on numerical increases in productivity indicators.

Overall, this new legislative decree aims to simplify and improve existing regulations related to taxes and benefits for employees.