The 2025 Budget Law (L. 207/2024) introduced, applicable only to the tax period following the one in progress on 31.12.2024, a significant tax incentive: the application of a reduced IRES rate of 20% (as opposed to 24%) for corporations that meet specific requirements.
This measure is designed to encourage the reinvestment of profits in technological innovation and job creation. It is applied automatically and does not require specific application.
Eligible Entities
The following companies and entities may benefit from the incentive:
- Those that determine taxable income, even partially, under flat-rate regimes;
- Those in ordinary liquidation, or subject to bankruptcy procedures dealing with liquidation, during the tax period following the one in progress on 31.12.2024.
Conditions for Admission
The reduction of 4 percentage points applies when the following conditions are met:
- At least 80% of the profits from the financial year ending on 31 December 2024 must be allocated to a specific reserve;
- At least 30% of the reserve profits (and in any case, not less than 24 percent of the profits of the financial year ending on 31 December 2023) must be delegated to investments in new capital goods, including through financial leasing contracts. These investments, with a minimum value of €20,000, must be made between 01.01.2025 and 31.10.2026, in production facilities located on the national territory;
- In the tax period following the one in progress on 31.12.2024:
- The average number of annual business units must not decrease compared to the average for the period 2022-2024;
- There must be new permanent hires equal to at least 1% of the average permanent workforce in 2024, with a minimum of one hire.
Causes of Forfeiture
The incentive will be revoked, and benefits recovered, if:
- The reserved portion of the profit is distributed within the second financial year following the one in progress on 31.12.2024; or
- The invested assets are sold, transferred to third parties, used for non-business purposes, or permanently relocated to production facilities abroad (even within the same entity) within five tax years from when the investment was made.
Considerations for the approval of the financial statement closed on 31.12.2024
Given that admission to the incentive requires allocating at least 80% of the profits ending on 31.12.2024 to a specific reserve, it is important to note:
- Said 80% must be calculated on the net profit shown from the balance sheet approved by the shareholders’ meeting;
- A specific reserve should be clearly recorded in the company’s equity to provide formal evidence.
