Italy

The Italian Budget Law for fiscal year (FY) 2025 introduced some changes regarding:

• The reduction of brackets for personal income taxation, which become a final measure.
• The amendment to the tax deductions for employment incomes, which become a final measure.
• The reduction of rates for tax deductions and of expense thresholds linked to building renovation expenses.
• The amendment to the tax deductions for family dependants.
• The new rules to determine the taxable base of company cars awarded to employees for personal and business use.
• The reduction of tax rate for productivity bonus. The measure is valid for the years 2025, 2026, and 2027.
• The confirmation of annual tax-free thresholds for fringe benefits awarded to employees.

The Law no 108 of July 30th, 2025 ("Tax Decree for 2025") includes some provisions on individual tax matter:

• The application of the additional PIT of 10% on variable remuneration and stock option is limited to the managers of financial sector only, starting from tax year 2025.
• The specification of limits of the obligation to track travel expenses for employees and self-employees (for PIT, CIT and IRAP purposes) referring them to payments made within the Italian territory, excluding expenses incurred abroad.

Furthemore, as per the current provisions of Legislative Decree no 209/2023 (Inbound workers regime), there seem to be no restrictions to cumulate the Inbound workers regime with the lump sum tax regime (200k Eur). This is subject to a preventive submission of a tax ruling in order to obtain the formal opinion of the Italian tax authorities to simultaneously apply the above mentioned special regimes during the same tax period.