On 30 December 2023, Italy issued Law No. 213 of 30 December 2023 concerning the State Budget for 2024 and the multi-year budget for 2024-2026.
Some key tax measures include:
Personal income tax brackets have been reduced from 4 to 3 by merging the first and second brackets into a single bracket. This new bracket applies a 23% tax rate on income up to EUR 28,000. The upper brackets and rates remain unchanged.
A new tax credit has been introduced to incentivize investment in capital goods, specifically production facilities in southern Italy.
The substitute tax rate on premiums (bonuses) received by eligible employees of private companies is reduced to 5%.
The domestic participation exemption (95% exemption) for capital gains on qualifying shareholdings has been extended to qualifying non-resident companies without a permanent establishment in Italy. However, these companies must be residents of another EU Member State or an EEA country with adequate exchange of information with Italy and must be subject to corporate income tax in their country of residence.
The provisions of Law No. 213 of 30 December 2023, went into effect on 1 January 2024.
