Senate vote of confidence: the 2025 budget law is law

"I don't know for how many years unfortunately this has been the case. Since the accounting law has to be reformed anyway according to the new European rules, preliminary work has already started. But rightly it is a parliamentary matter, not a government matter, the initiative must be parliamentary on these things. Some revision of the mechanisms and also of the rules is necessary. We are absolutely willing and have given our availability'. So said Economy Minister Giancarlo Giorgetti to reporters in the Senate who asked him whether the government will take into account the protests over the lack of a double reading on the manoeuvre with the reform of the accounting law.

The budget law makes the merging of IRPEF rates into three brackets structural: 23% up to EUR 28,000, 35% up to EUR 50,000, and 43% over EUR 50,000. It also goes ahead with the cut in the tax wedge, broadening the group of workers affected: the income threshold allowing access to the cut will rise from 35,000 to 40,000 euro.

To encourage the birth rate, for each child born or adopted after 1 January 2025, a one-off amount of EUR 1,000 is recognised for households with an Isee not exceeding EUR 40,000 per year.

For companies, the Budget Law provides a number of concessions, including a reduction in IRES for companies that reinvest at least 30 per cent of their profits in 2024. In addition, a EUR 70 million fund has been earmarked for worker participation in the management and profits of companies. SMEs will also be able to benefit from a guarantee fund for access to credit.

The rule on auditors from the Ministry of the Economy in companies and entities receiving public subsidies in excess of EUR 100,000 is dropped.

However, budget controls increase. On the pension front, those in the contributory system will be able to combine compulsory and complementary pensions to reach a pension allowance of three times the minimum, thus bringing forward retirement to 64 years of age.

Here is an overview of the main measures.

The government and majority's desire for flat taxes does not stop. The final approval of the manoeuvre brings with it at least three interventions aimed at enlarging or creating from scratch three flat taxes. While waiting to find the resources to reduce the three current rates, and even to accelerate towards a reduction in the number of tax brackets in a pure flat tax perspective, mini-flat taxes are increasingly taking shape. Starting with employees and pensioners interested in self-employed, professional or small business work. In this case, there comes the raising of the income threshold for 2025 only, which allows access to the flat-rate scheme for VAT numbers. Further reading.

With regard to the family, in order to encourage the birth rate and contribute to child support expenses, a one-off allowance of €1,000 is introduced for each child born or adopted as from 1 January 2025; the benefit - granted by Inps upon application - is subject to the condition that the applicant parent's family unit has an Isee value not exceeding €40.000 per year - an Isee value that is calculated net of the single and universal allowance for dependent children - as well as the condition that the applicant parent is resident in Italy and falls into the categories of citizenship or residence permit or family ties specified. Further reading

The balance of posts for teachers coming out of the 2025 manoeuvre is set to be negative by more than 3,500. Against a reduction of 5,660 posts on the staff of autonomy from the next school year, which was provided for in the initial text of the bill and remained so even after the first parliamentary passage in the House, an increase of 1,866 support teachers already in 2025/26 has popped up during the procedure in Montecitorio. This will be followed by a further 134 in 2026/27, bringing the total number of new entrants dedicated to supporting pupils with disabilities to 2,000. Go to article

The voluntary contribution to the public coffers by banks and insurance companies and provided for in the manoeuvre has risen over the past few months and amounts to 6.5 billion. The prospect of advancing liquidity to the state was accepted by the sector on the assumption that it would be possible to recover the funds in later years. Read more

The first intervention, therefore, redefines the structure of the Irpef model with the confirmation of the transitional regime in force for 2024, which provides for a system based on three income brackets:
- up to 28,000 euro, with a rate of 23 per cent;
- over 28,000 and up to 50,000 euro, with a rate of 35 per cent;
- over 50,000 euro, with a rate of 43 per cent. Further reading

There are 18,000 companies potentially benefiting from the bonus IRES, the 4 percentage point reduction in the tax scheduled for 2025. This is what emerges from the report accompanying the budget bill that has arrived in the Senate. It shows, in fact, that 'complying with all the conditions (on profits, investments, and employment), about 18,000 companies have set aside a total of 8 billion in profits against total statutory profits of 11 billion'. Furthermore, it is estimated that these companies 'will make investments in the two-year period 2025-2026 to the tune of EUR 11 billion, out of a total Transition 4.0 investments of EUR 27 billion (42%), and 109 thousand new hires'.

Also from reading the technical report of the General Accounting Office of the State accompanying the text, it emerges that the impact of the novelty envisaged in the manoeuvre on early retirement will affect, at least at the beginning, about a hundred people. The measure makes it possible to anticipate to 64 years of age by accumulating the amounts of the complementary fund, but only if one already has 20 years of contributions and is fully contributory. 'Taking into account the specificity of the subjects under consideration,' reads the report, 'the number of subjects involved is estimated to be small, in the order of about one hundred at the beginning of the period, gradually increasing to about 600 per year at the end of the decade considered, for an average advance of about one year'.