INPS: tax relief for performance bonuses paid in 2014

The Italian Ministerial Decree of 8 April 2015 was published in the Official Gazette no. 123 of 29 May 2015, which began the process to obtain tax relief for performance bonuses as set forth in second-level agreements for 2014.

Scope of the tax relief

The "payments set forth in the collective corporate and territorial contracts or the second-level ones" are subject to relief for which the total or amount is uncertain and the structure of which is related to the collective contract as a performance, quality or other competitive bonus used as an indicator of the company's economic trend and results."

Scope of Application and Benefit limits

The employer benefit will be granted for those sums for up to a maximum of 1.60% of the contractual remuneration received or the taxable contribution amount determined based on the rules of Art. 12, Law no. 153/69 as amended by Art. 6, Legislative Decree no. 314/97.

This benefit measure may be recalculated by INPS (either increased or decreased) by 28 February 2016.

Benefit amount

The benefit set forth by the benefit measure is a reduction in contributions:

  • within a maximum of 25 points of the employer rate, net of the contribution reductions for special hires, any compensation measures owed and - for agriculture - net of the benefits for mountain or disadvantaged territories total of the employee amount.
  • the additional IVS benefit of 1% owed for the compensation amount exceeding the limit of the first compensation level that can be used to calculate the pension is not subject to relief

Relief and conditions

Pursuant to the Ministerial Decree to apply benefits, the companies involved must also, through their authorised intermediaries, online only, file an application with INPS based on the terms and conditions that the Institute will share in its next circular.

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Sonia  Piazzoni
Technical update

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