Unrest, the very thing that's causing a commotion and sparking conversations.
The 2025 Budget Law in Italy has introduced a welcome change for companies looking to invest in growth, new hires, welfare, and training. The new measure, known as the "reward IRES," offers a temporary discount on the IRES corporate income tax rate.
Background and Key Details
Law No. 207/2024, part of the 2025 Budget Law, introduced the incentive. It applies to Italian-resident joint-stock companies, commercial entities, permanent establishments of non-resident companies, and non-commercial entities deriving income from commercial activities. However, companies in liquidation or insolvency, those under flat-rate or simplified accounting regimes, and entities lacking adequate transparency or accounting systems are excluded.
To qualify for the discount, companies must retain at least 80% of their 2024 profits and allocate at least 30% of the retained profits (not less than 24% of 2023 profits) to "relevant" investments.
Impact on Companies
The incentive aims to lower the corporate tax burden for companies that choose to reinvest in their businesses and socially responsible projects. By doing so, it encourages sustainable economic development. The reduced IRES rate stands at 20%, a decrease from the standard 24%.
Approximately 1.3 million companies and entities pay IRES annually, with around 1.2 million being limited liability companies (LLCs). Joint-stock companies (JSC) and other capital companies, such as limited partnerships, also fall under this tax.
The ministerial decree signed on August 8, 2025, further regulates the "premium" version of IRES, which reserves the 20% rate for businesses that invest in production and hire new staff.
It's important to note that the specifics of how the IRES discount would be funded are not provided in the article. Additionally, no information is given regarding how the IRES rate has changed over time or what mini-IRES applies to.
In conclusion, the 2025 Italian Budget Law's IRES discount provides a significant opportunity for companies to invest in their growth and social responsibility, with the potential to boost both economic output and sustainable development.
- The 2025 Budget Law in Italy, through the introduction of the "reward IRES," has offered a temporary discount on the corporate income tax rate (finance) for businesses that choose to invest in growth, new hires, welfare, and training (business).
- Companies that opt to retain at least 80% of their 2024 profits and allocate at least 30% of the retained profits (not less than 24% of 2023 profits) to "relevant" investments can lower their corporate tax burden (finance) and encourage sustainable economic development (business).
