The Latest News on Employment and Social Security

News No. 34/2024

This News summarizes the latest developments in the areas of employment and social security.

List of Topics Covered

1) Update on the posting of personnel: As of January 1, 2025, it will be subject to VAT

2) The “Salva Infrazioni” Decree and Updates on Fixed-Term Contracts

3) Publication of the 2024 New Skills Fund Decree

4) Supplementary Agreement to the National Collective Bargaining Agreement for the Tertiary Sector – Confcommercio, dated October 31, 2024, on vocational apprenticeships

5) Renewal of the National Collective Bargaining Agreement for Executives of Goods and Services Manufacturing Companies (National Collective Bargaining Agreement for Industrial Executives)

6) News INPS provides guidelines for employers and workers in the fashion industry on how to process applications for temporary layoff benefits

7) INPS Guidelines on the Contribution Exemption Applicable When Hiring Employees Receiving the Inclusion Allowance (ADI) or the Training and Employment Support (SFL)

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1)   Update on the Secondment of Personnel: Effective January 1, 2025, it will be subject to VAT

Under Law No. 166 of November 14, 2024—which took effect on November 15, 2024—converting Decree No. 131 of September 16, 2024, known as the “Salva Infrazioni” Decree, No. 131 of September 16, 2024, the legislature repealed paragraph 35 of Article 8 of Law No. 67/1988, which provided that the secondment of employees was not subject to VAT if the host company paid a fee equal to the costs incurred by the sending employer (secondments for which only reimbursement of the related costs is paid).

Consequently, effective January 1, 2025, payments made in connection with staff loans or secondments will be subject to VAT.

The technical report accompanying the provision highlights that “the application of VAT to such reimbursements results in a VAT liability for the sending entity and a VAT credit for the receiving entity. Since both are VAT-registered entities, the VAT paid by the former would correspond to a VAT deduction of the same amount for the latter, with a neutral effect on total tax revenue.” However, this neutrality may not be guaranteed if the host entity is a VAT-registered entity with a restriction on its right to deduct input VAT. For example, for a host entity operating under a VAT exemption, the imposition of VAT on the secondment of personnel effectively results in higher costs.

This is without prejudice to actions taken by taxpayers prior to January 1, 2025, for which no final assessments have been issued.

The repeal of this provision is necessary to implement the judgment of the Court of Justice of the European Union of March 11, 2020, in Case C-94/19, concerning the preliminary ruling requested by the Court of Cassation regarding the compatibility of Article 8, paragraph 35, of Law No. 67/1988 with the provisions of the European VAT Directive. Therefore, the repeal of the provision was necessary to avoid the initiation of infringement proceedings for failure to comply with the aforementioned judgment.

2)   Decree on the Waiver of Violations and Updates on Fixed-Term Contracts

Decree No. 131 of September 16, 2024 (the so-called “Infraction Remedy Decree”) also addressed the regulations governing fixed-term employment contracts, in response to the recommendations issued during the infringement procedure in which the European Union required Italy to bring its domestic legislation into line with EU Directive 1999/70/EC on fixed-term employment. Consequently, the legislature amended Article 28 of Legislative Decree No. 81/2015, “Time Limits and Protections,” introducing the possibility for a judge to award compensation in an amount exceeding 12 months’ pay, should the employee demonstrate that they have suffered greater harm, and has eliminated any reduction in the number of monthly salaries that might have been subject to collective bargaining.

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