The latest developments in labor and social security matters

News No. 34/2024

This News summarizes the latest developments in labor and social security matters.

List of topics covered

1) News on personnel secondment: from 01.01.2025 it will be subject to VAT

2) Infringement Safeguard Decree and developments regarding fixed-term contracts

3) Publication of the New Skills Fund Decree 2024

4) Supplementary Agreement to the National Collective Bargaining Agreement for the Tertiary Sector - Confcommercio, dated 31.10.2024, concerning professionalizing apprenticeships

5) Contractual Renewal of the National Collective Bargaining Agreement for Managers of Goods and Services Producing Companies (National Collective Bargaining Agreement for Industrial Managers)

6) INPS News with procedural guidelines for processing wage supplementation applications for employers and employees in the fashion sector

7) INPS Instructions regarding the social security contribution exemption applicable when hiring personnel benefiting from the Inclusion Allowance (ADI) or the Support for Training and Work (SFL)

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1) Developments regarding Staff Secondment: from 01.01.2025 it will be subject to VAT

With Law no. 166 of November 14, 2024, effective from November 15, 2024, converting Decree no. 131 of September 16, 2024, known as the 'Infringement Safeguard Decree', the Legislator has mandated the repeal of paragraph 35 of Article 8 of Law no. 67/1988, which stipulated that staff secondment operations were not subject to VAT when the seconded entity paid a consideration equal to the costs incurred by the seconding employer (staff secondments for which only the reimbursement of the related cost was paid).

Consequently, effective from January 1, 2025, amounts paid for staff loans/secondments will become subject to VAT.

The technical report accompanying the provision highlights that 'subjecting such reimbursements to VAT results in output VAT for the seconding entity and input VAT for the seconded entity. As both are VAT operators, the VAT paid by the first entity would correspond to a VAT deduction of the same amount for the second entity, resulting in neutral effects on the overall tax revenue.' However, this neutrality might not be guaranteed if the seconded entity is a VAT subject with limitations on the right to deduct input VAT. For instance, for a seconded entity operating under a VAT exemption regime, subjecting staff secondment to VAT effectively translates into an increased cost.

Taxpayer conduct adopted prior to January 1, 2025, remains unaffected, provided that no definitive assessments have been issued.

The repeal of this provision addresses the need to implement the judgment of the Court of Justice of the European Union of March 11, 2020, Case C-94/19, concerning the preliminary ruling sought 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 this norm became necessary to avoid the initiation of an infringement procedure for non-execution of the aforementioned judgment.

2) Infringement Safeguard Decree and developments regarding fixed-term contracts

Decree no. 131 of September 16, 2024 (the so-called 'Infringement Safeguard Decree') has also addressed the regulation of fixed-term employment contracts, following the indications of the infringement procedure through which the European Union requested Italy to align its domestic legislation with Community Directive 1999/70/EC on fixed-term work. Consequently, the legislator has amended Article 28 of Legislative Decree no. 81/2015, titled 'forfeitures and protections', introducing the possibility for the judge to award compensation even exceeding 12 months' salary, should the worker demonstrate having suffered greater damages, and has eliminated the reduction in months' salary that might have been subject to collective bargaining.

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