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Italy Expands Employee Productivity Tax Incentive

by Ulrika Lomas, Tax-News.com, Brussels

02 May 2014


A recently gazetted decree in Italy has confirmed an extension, into 2014, for the reduced income tax rate for employees' earnings arising out of work arrangements that improve corporate productivity.

The reduced 10 percent individual income tax, which was originally introduced in July 2008 to stimulate increased productivity in the private corporate sector, was amended and extended into 2014 by this year's Italian Budget.

Under the amended incentive, employees with a total annual income of up to EUR40,000 (USD55.500) in 2013 will be able to receive the 10 percent tax rate for eligible additional earnings in 2014, within a limit of EUR3,000 per year. Previously, in 2013, while the 2012 annual earnings limit was the same at EUR40,000, the additional earnings limit was only EUR2,500.

To qualify for the tax incentive, a worker's extra earnings should be received under employment changes that increase an employer's productivity, profitability, innovation, or organizational efficiency, as stipulated within contracts arranged either at company or territorial level.

TAGS: individuals | tax | business | tax incentives | law | employees | legislation | tax rates | Italy | legislation amendments | individual income tax

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