• Tax, Mattarella signed the tax wedge DL
  • Green light from the Council of Ministers to the decree for cutting the tax wedge
  • Government-trade unions summit: cutting the tax wedge for incomes of up to € 40,000

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March 31, 2020 The Chamber of Deputies has definitively approved the decree law for the reduction of the tax wedge with 254 yes and 131 abstentions (FdI, Fi and Lega). Voting operations were carried out by roll call, according to a distancing procedure among the members respecting the Covid-19 rules on health prevention.

The Decree provides for employees a measure that is divided into a 'reinforced' bonus compared to that of 80 euros (which is repealed) up to an income of 28 thousand euros and an income tax deduction for incomes of up to 40 thousand euros. Both measures will start on July 1st but the deduction is expected only until December 31st of this year.

The supplementary treatment (the so-called bonus) will be equal to 600 euros in 2020 and 1,200 euros from 2021 (to the extent of 100 euros per month). As for the deduction, it starts from € 600 for income from € 28 thousand to decrease to zero at the income level of € 40 thousand. Charges are estimated at around 7.5 for 2020, about 13.5 billion for 2021 and about 13.2 billion per year starting from 2022. The Senate approved, at first reading, the doubling of installments from 4 to 8 both in the case of the 'enhanced' bonus and in that of the deduction, in the event that the obligation to repay for exceeding the expected income ceilings is triggered. The threshold above which this installment may be requested remains at 60 euros.