Enhanced Deduction of Labor Costs

Flash News No. 10/2025

We remind our esteemed Clients that Legislative Decree No. 216 of December 30, 2023, in implementation of the first module of personal income tax reform and other measures concerning income taxes, under Article 4, has provided for a 20% increase in the deductible cost of employed personnel, in the presence of new hires that result in a net increase in employment compared to the employed personnel in force in the previous tax period.

Employers who can benefit from the tax relief, provided they meet the previously highlighted requirements, are:

- companies/entities resident in Italy (joint-stock companies, limited partnerships by shares, limited liability companies, cooperative societies, and mutual insurance companies);

- non-commercial entities, limited to new hires employed in commercial activities, provided they are accounted for separately;

- non-resident entities, with respect to commercial activity carried out in Italy through a permanent establishment;

- sole proprietorships (including family enterprises and spousal businesses);

- general partnerships, limited partnerships, and equivalent entities;

- self-employed professionals and artists (including those operating in associated forms).

The incentive is not applicable to companies and entities undergoing ordinary liquidation, subject to judicial liquidation, or other insolvency proceedings related to business crisis.

Would you like to know more?

Subscribe to studiopiceci.it to continue reading these exclusive posts.

Subscribe now