Tax Benefits in Italy

TAX BENEFITS ON HIRING PERSONNEL IN ITALY

General types of benefits for hiring personnel: contributive, economic, normative and fiscal

Internship benefits examples:

* Contributive: 10% on social security contribution + 5,84% intern (also depends on how big is the company)

* Economic: 2 levels inferior contract than the position requires

* Normative: exemption of a certain law in employment, for example number of disabled personnel in the company

* Tax benefits: possibility of deduction from IRAP (regional business tax on the value of production generated in each tax period in Italian Regions by subjects engaged in business activities) of all the expenses incurred for formation of the interns.

In our case we are interested in fiscal benefits and there are not many for hiring personnel. Tax benefits are on national, regional and provincial levels.

General legislation:

Tax credit for high qualified personnel: it is provided for all companies hiring highly qualified personnel in possession of a PhD degree obtained at an Italian or foreign faculty (if equivalent) and/or Master’s degree achieved in the scientific and technical sphere. The staff must be hired on a “permanent contract” and must be involved in one of the following activities: 1) experimental or theoretical work aimed at the acquisition of new knowledge; 2) planned research or critical investigation aimed to acquire new knowledge for new products, processes or services, or, to improve the existing; 3) acquisition, combination, structuring and use of existing knowledge and increasing the capacity of scientific, technological and commercial knowledge; 4) creation of commercial prototypes and pilot projects. The tax credit is 35% of the costs incurred for employees including social security contributions and tax burdens, up to € 200.000 for each company.

Occasional work vouchers (the company pays 10 Euro and the worker gets 7,50 netto, 2,50 – social security):

Complete tax exemption for...