Taxes, clarifications from the Revenue Agency
The first module of the tax reform is underway. The operational instructions on the first part of the tax reform which will apply in 2024 and provides for the reduction of rates from 4 to 3 have been published: the first of 23 percent for incomes up to 28 thousand euros; then 35 percent for incomes above 28 and up to 50 thousand and finally 43% above this last threshold. The old rate of 25% which applied from 15 thousand to 28 thousand euros of income therefore disappears. The Revenue Agency circular provides the financial administration offices with indications for correctly applying the rules contained in Legislative Decree 216 of 30 December 2023. Further changes for 2024 also concern the employee deduction with an increase of 75 euros , the reduction of the amount of deductions due for some charges for incomes above 50 thousand euros and the abrogation of the relief for the capitalization of companies (Ace).
In detail, explains the Agency, the income brackets and the corresponding rates are reduced from four to three (23 percent for incomes up to 28,000 euros; 35 percent for incomes exceeding 28,000 euros and up to 50,000 euros; 43 percent for incomes exceeding 50,000 euros). At the same time, the deduction for holders of employee income and for certain similar incomes is also increased by 75 euros, from 1,880 to 1,955 euros, provided that the total income does not exceed 15,000 euros. In other words, for 2024, the no-tax area rises to 8,500 euros for employees.
Municipalities, Regions and autonomous Provinces have until 15 April 2024 to adapt the regulation of regional and municipal surcharges to the new structure of Irpef brackets and rates. For taxpayers with a total income exceeding 50,000 euros, the amount of the deduction from the gross tax due in relation to expenses whose deductibility is set at 19 percent is reduced by an amount equal to 260 euros.
The cut also affects donations to political parties and insurance premiums for the risk of disasters, while healthcare costs are excluded. For holders of a total income exceeding 120,000 euros, the reduction of 260 euros will be applied to the deduction from the gross tax which is already reduced due to the progressive reduction of the 19% deductions introduced by the budget for 2020 and regulated by article 15 , paragraph 3-bis, of the TUIR. The legislative decree on the first form of IRPEF reform also provided for the repeal, starting from the tax period following the one in progress on 31 December 2023, of the facilitation for the capitalization of companies (ACE), an aid aimed at promote the economic growth of companies by rebalancing the tax treatment between companies that are financed with debt and those that are financed with equity capital. In this regard, the Circular specifies, the decree establishes the cancellation of the ACE until the related effects are exhausted, therefore previous deductions not used due to lack of taxable income are to be understood as being without prejudice and which therefore can still be used in subsequent tax returns.
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