On 16 October 2023, Italy’s Ministry of the Economy and Finance declared the Council of Ministers’ approval of the 2024-2026 draft budget bill.
The key proposals include:
- The plastic and sugar tax will remain suspended until 1 July 2024;
- A tax credit will be introduced for the purchase of capital goods to support and promote businesses in southern regions;
- Starting from 1 January 2024, the Pillar 2 global minimum tax will be implemented as per the Council Directive (EU) 2022/2523 dated 14 December 2022;
- A new incentive for reshoring has been introduced, offering a 50% tax reduction to companies that relocate their production activities within Italy. This incentive applies from the transfer year and will continue for the following 5 years;
- The tax-free threshold for income from employment will be raised to EUR 8,500; and
- The personal income tax brackets will be reduced from 4 to 3. The first and second brackets will be merged into a single bracket with a 23% tax rate, applicable to income up to EUR 28,000.
