New measures effective from July 1, 2020

Subject: New measures effective from July 1, 2020

-Irpef credit, tax deduction for income from dependent employment and new taxation for company cars for mixed use

This News outlines the regulatory provisions introduced by the 2020 Budget Law and the Decree Law containing urgent measures for the reduction of the tax burden on employed labor, effective from July 1, 2020.

Regarding the Decree Law on measures to reduce the tax burden, it has provided for two different types of tax wedge reduction applicable based on the amount of total annual income from dependent and similar employment, and these take the form of an integrative income treatment, which led to the repeal of the so-called Renzi Bonus but substantially follows the same rules, and a further tax deduction.

Both tax wedge reduction mechanisms are subject to a pro-rata adjustment (In the event that the amount subject to recovery exceeds 60 euros, the withholding agent is required to pay the amount in 4 monthly installments starting from the month in which the adjustment is made) based on the period of work actually performed during the year, and given the effective date of the application of the legislation, they will certainly be subject to a pro-rata adjustment for 2020 (recognized and adjusted pro-rata for the July-December 2020 semester).

Supplementary treatment of income from dependent and similar employment: IRPEF Credit

This treatment, the total amount of which is equal to 1,200 euros, is aimed at supplementing the net pay of employees whose total annual income does not exceed 28,000 euros. The beneficiaries of this measure, therefore, are workers whose annual income deriving from dependent or similar employment relationships is greater than 8,173.00 euros, therefore, workers whose gross tax net of dependent employment deductions is positive.

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