Raising of Fringe Benefit threshold up to €3,000: clarifications from the Italian Tax Authority

On August 1st, 2023, the Italian Tax Authority (hereinafter “ITA”) with Circular No. 23/E provided the awaited clarifications regarding article 40 of Law Decree 48/2023 (the so-called “Decreto Lavoro”), which provides for the raising of the exemption threshold - up to €3,000 - for fringe benefits granted by the employer to employees with children who are tax dependents pursuant to Art. 12, para. 2 of the Presidential Decree no. 917/1986 (hereinafter “TUIR”).

EU Directive 2023/970: gender pay gap and disclosure on employees’ remuneration

This past May 10th, 2023, the European Parliament and Council approved the final version of the EU Directive no. 2023/970, which aims at strengthening the application of the principle of equal pay for men and women for equal work, or work of equal value, through pay transparency and related enforcement mechanisms. This Directive, which was published in the EU Official Gazette on May 17th, 2023 and entered into force 20 days after that date, is not directly applicable, as it is addressed to the EU Member States (Italy included), which will have to comply with it by June 7th, 2026.

Circular of the Italian Tax Agency on the tax profiles of remote work and the tax discipline of frontier employees following the innovations set out in Law no. 83/2023 on the ratification of the Italy-Switzerland agreement

On August 18th, 2023, the Italian Tax Agency published the circular no. 25/2023 in which it overviewed and summarized the most recent developments in the legislation and practices on the taxation of work performed through the use of agile work (so-called "smart working") and on the subject of frontier work, in light of the changes introduced by the latest bilateral agreement between Italy and Switzerland and by Law no. 83/2023 ratifying the latter.

Clarification by the Italian tax authorities on input VAT deduction incurred on the purchase of residential buildings

Edited by Alessia Zanatto, Maria Chiara Turio Bohm, Andrea Carbone By means of Ruling no. 392, dated July 24, 2023 ("Ruling no. 392/2023"), the Italian tax authorities provided important clarifications regarding the deductibility of input VAT for transactions involving the…

The European Commission approved the proposal to make the whole of Southern Italy a Special Economic Zone

Last 13 July the Minister for European Affairs, the South, Cohesion Policies and the PNRR, Raffaele Fitto, met in Brussels with the Executive Vice-President of the European Commission and Commissioner for Competition, Margrethe Vestager, who welcomed the proposal relating to the establishment of a whole Special Economic Zone (ZES) which includes all the regions of the South. The Government's proposal aims to extend to the whole of Southern Italy the procedures of simplification and acceleration of the investments and the tax supports provided to companies that set up or invest in the ZES.  

Fiscal Years 2022 and 2023: temporary relief from limitations on foreign tax credit introduced in the U.S.

In 2022, the Internal Revenue Service (IRS) fundamentally changed the rules regarding credit for foreign taxes paid by U.S. companies, introducing strict requirements that limited the creditability in the United States of a range of foreign taxes (e.g., withholding taxes incurred at source on certain payment streams received by U.S. companies such as from Brazil).

Tax delegation law and the reform of the incentives system

The draft law AS 571 ("Delegation to the Government regarding the revision of the system of incentives for companies, as well as provisions for the simplification of the related procedures") proposes, among other objectives, an organic renewal of the system of incentives for companies, to improve its effectiveness both from the point of view of economic development and social cohesion.

Draft for a German Growth Opportunities Act published 

A draft law for a "Growth Opportunities Act" was sent to the German Industry Associations for consultation on 14 July 2023. In addition to a new law introducing an investment grant for certain investments aiming to achieve energy savings, various adjustments to national and international tax law provisions are proposed (as briefly summarized hereinafter and without any claim to comprehensiveness).