Italy has approved 2015 fiscal budget with deficit. The budget bill was passed by both houses of parliament when the Chamber of Deputies approved the budget on December 22.
Budget implication on Tax & VAT:
- The Budget includes a cut in the rate applicable to e-books and e-periodicals from the 22 percent full rate to four percent. It also increases the rate on wood fuel pellets from 10 percent to 22 percent.
- The inclusion of the labor costs of full-time employees (not on fixed-term contracts) in the calculation of the regional tax on production (IRAP) in 2015 has also been confirmed, as has also the retroactive return of the IRAP tax rate to 3.9 percent in 2014, from the previously-agreed 3.5 percent.
- The Budget now includes a 10 percent tax credit for the 1.4m businesses in Italy (such as the self-employed), which have no employees and would otherwise be penalized by the return of the higher IRAP tax rate.
- A new 15 percent fixed tax rate (covering individual and corporate taxes, IRAP and VAT), as against the previous five percent regime, is to be introduced for smaller businesses.
