2022 Budget Law
- Studio Piceci
- Jan. 18, 2022
- Reading time: 23 min
Update: May 31, 2022
News . 04/2022
The Budget Law for the year 2022, no. 234 of December 30, 2021, was published in Gazzetta on December 31, 2021. Important changes regarding work, families, and businesses.
Let's summarize the most important ones:
New income tax rates and methods for calculating tax deductions;
IRAP news;
Simplifications regarding the "Patent Box";
Repeal of Decree Law No. 157 of November 11, 2021;
Tax credits;
Contribution exemptions and relief to promote stable employment and experimental measures;
Reform of social safety nets;
Measures aimed at promoting corporate social responsibility and dialogue in the management of industrial crises;
Extracurricular internships;
Citizenship income and LEPS for non-self-sufficiency;
Social Ape.
With regard to other new developments (such as, for example: tax credits for renewable energy plants, composting plants, subsidies for producers of PDO, PGI, and organic wines, Sustainable Practices Fund, Superbonus for the construction sector, Facade Bonus and other building deductions, urban regeneration measures, tax collection notices, extension of the tax credit for capital goods , changes to the rules on revaluation and realignment, extension of the entry into force of VAT provisions, reduced IMU (property tax) for non-resident pensioners and much more), please refer to the text of the Law for anything not expressly indicated in this News.
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1. New income tax rates and calculation of tax deductions
The Consolidated Income Tax Law, No. 917 of December 22, 1986, is amended as follows:
Gross tax is calculated by applying the following rates to total income, net of deductible expenses, according to income brackets:
Up to €15,000, 23%;
Over €15,000 and up to €28,000, 25%;
Over €28,000 and up to €50,000, 35%;
Over €50,000, 43%.
Therefore, the main change concerns the tax rates to be applied to the relevant income brackets, which are reduced from 5 to 4.
The calculation of tax deductions will change, and from January 1, 2022, it will be carried out as follows, according to the following summary table:
a) Deductions for income from employment and similar income (as per the new Article 13 of the TUIR) (summary table)
Annual deduction (expressed in euros) | Annual income limit (expressed in euros) |
1.880 | Up to 15,000 (the amount of the deduction cannot be less than 690 euros or, if fixed-term, 1,380 euros) |
1,910+((1,190*(28,000-RC)/13,000)) | Over 15,000 up to 28,000 |
1,910 * (50,000-RC)/22,000 | Over 28,000 up to 50,000 |
0 | Over 50,000 |
Deduction due + 65 euros | Greater than 25,000 but less than 35,000 |
b) New deduction for pension income (Article 13, paragraph 3, letters a), b), and c) of the TUIR)
Annual deduction (expressed in euros) | Annual income limit (expressed in euros) |
1.955 | For incomes up to 8,500 (the amount of the deduction cannot be less than 713 euros) |
700 + ((1,255*(28,000 - RC)/19,500)) | Over 8,500 but not 28,000 |
700 * (50,000-RC)/22,000 | Over 28,000 up to 50,000 |
0 | Over 50,000 |
Deduction due + 50 euros | Greater than 25,000 but not greater than 29,000 |
c) New deduction for income similar to that of employees and other income (Article 13, paragraph 5, letters a) and b) if one or more types of income referred to in Article 50, paragraph 1, letters e) (remuneration for intramural freelance activities of National Health Service employees, etc.) and f) (allowances, attendance fees, and other remuneration paid by the State, regions, provinces, and municipalities for the exercise of public functions, etc.) contribute to the formation of the total income. (allowances, attendance fees, and other compensation paid by the State, regions, provinces, and municipalities for the exercise of public functions, etc.), g) (allowances received by members of Parliament, etc.), h) (life annuities and fixed-term annuities established for consideration other than those serving a social security function) and i) (other periodic payments), excluding those deriving from the periodic payments indicated in Article 10, paragraph 1, letter c), among the deductible expenses, 53, 66 and 67, paragraph 1, letters i) and l)
Annual deduction (expressed in euros) | Annual income limit (expressed in euros) |
1.265 | Up to 5,500 |
500 + ((765*(28,000 - RC)/22,500)) | Over 5,500 up to 28,000 |
500* (50,000-RC)/22,000 | Over 28,000 to 50,000 |
0 | |
Over 50,000 Tax deduction due + 50 euros | Greater than 11,000 but not greater than 17,000 |
d) Deductions for dependent family members
The reform on deductions for dependent family members is dictated by Legislative Decree No. 230 of December 21, 2021, which introduced the Universal Child Allowance as a form of support for families with dependent minor children and, under certain conditions, for children over the age of 18 until they reach the age of 21. The payment of the allowance, which will start on March 1, 2022, will result in the disappearance of family allowances and deductions for dependent children from paychecks, as they will be replaced by the Universal Child Allowance, which will be paid directly by INPS.
Both the Assegno Ponte (bridge allowance) and deductions for the aforementioned dependent family members will continue to be recognized in paychecks until February 28, 2022. Starting March 1:
tax deductions for dependent children aged 21 or over will remain in place;
No additional deduction (equal to €400) will be recognized for each child with a disability pursuant to Law No. 104/1992 and for those who have more than three dependent children (increase of €200 for each child starting from the first).
The additional deduction will disappear if there are at least four dependent children.
Please refer to our News Universal Child News for further detailed information.
e) Supplementary tax treatment
With regard to the supplementary treatment of income from employment and similar income provided for, pending a review of income support measures, by Decree Law No. 3 of February 5, 2020, converted with amendments into Law No. 21 of April 2, 2020, it is recognized for incomes up to €15,000 (if the gross tax, calculated in accordance with the provisions of the legislator and with the exclusions provided for, is higher than the deduction due under Article 13(1) of the TUIR).
The supplementary allowance is also recognized if the total income is greater than €15,000 but not greater than €28,000, provided that the sum of the deductions referred to in Articles 12 and 13, paragraph 1, of the deductions referred to in Article 15, paragraph 1, letters a) and b) and paragraph 1-ter of the TUIR, limited to expenses incurred in connection with loans or mortgages contracted until December 31, 2021, and the installments relating to the deductions referred to in Articles 15(1)(c) and 16-bis of the TUIR, as well as those relating to the deductions provided for by other regulatory provisions, for expenses incurred until December 31, 2021, is exceed the gross tax.
The supplementary treatment is recognized for an amount not exceeding €1,200, determined as the difference between the sum of the deductions listed above and the gross tax.
By way of example, we list the deductions to be taken into account for the purposes of the calculation:
Deductions for dependent family members (limited to those that remain in effect);
Deductions for income from employment and similar sources;
“for interest expense and ancillary charges paid as a result of agricultural loans or mortgages (limited to charges incurred in connection with mortgages or loans taken out up to December 31, 2021);