The Budget Law 2025 (Law No. 207 of Dec. 30, 2024), officially went into effect on Jan. 1, 2025.
Below, we present the main tax innovations introduced, with a focus on the changes related to corporations and professionals.

1. Amendments to the criteria for deducting business losses and ACE surpluses for credit and financial institutions and insurance companies (Art. 1 co. 18)

A temporary restriction is introduced on the use of tax losses under Article 84 of the Consolidated Income Tax Act (“TUIR”) and ACE surpluses under Article 5 of Legislative Decree 216/2023. This applies exclusively to entities affected by the provisions of Article 1, Paragraphs 14-17, of Law 207/2024, namely credit and financial institutions and insurance companies.

These losses and surpluses can be used to reduce taxable income for the fiscal year ending December 31, 2025, but only in relation to the additional taxable income generated in the same fiscal year due to the deferral provisions in Paragraphs 14-17. The use is further capped at 54% of this additional taxable income.

2. Stabilization of tax cost revaluation for land and shares (Art. 1 co. 30)

The revaluation regime for the tax cost of shares (both listed and unlisted), governed by Article 5 of Law 448/2001, and for land (agricultural and buildable), governed by Article 7 of the same law, has been stabilized.

By paying a substitute tax, individuals, simple companies, non-commercial entities, and non-resident entities without a permanent establishment in Italy can revalue the purchase cost or value of shares and land held outside business activities as of January 1 of each year. This allows them to partially or fully neutralize capital gains realized under Article 67, Paragraph 1, Letters a) – c-bis) of the TUIR when such assets are sold for consideration.

For assets held as of January 1 each year, the deadline for completing the necessary procedures is November 30 of the same year. The substitute tax has a flat rate of 18%.

3. Traceability of travel expenses for companies (Art. 1 co. 81(a) and (c), 82 and 83)

A requirement is introduced to use traceable payment methods to ensure that travel expenses for employees do not count as taxable income.

Specifically, reimbursements for travel or mission expenses as specified in Paragraph 5 will not contribute to employee taxable income, provided payments are made via traceable means. Covered expenses include:

• meals
• accommodation
• travel and transportation (e.g., taxi or chauffeur services).

Payments must be made through:

• bank or postal transfers, or
• other payment methods listed in Article 23 of Legislative Decree 241/1997 (e.g., debit, credit, and prepaid cards; bank or cashier’s checks).

The same traceability rule applies to the deductibility of expenses for meals, accommodation, and detailed reimbursements related to employee travel or reimbursements for independent contractors. The new rules will take effect starting in the fiscal year following December 31, 2024 (i.e., 2025 for those with a calendar-year fiscal period).

4. Traceability of travel expenses for professionals (Art. 1 co. 81(b), 82 and 83)

For professionals, expenses related to lodging, food and drink, and travel (e.g., taxi or chauffeur services) will only be deductible for income tax and IRAP purposes if:

• they are itemized and charged to the client, or
• they are detailed reimbursements for the same types of expenses incurred for employee travel or paid to independent contractors.

Deductibility is subject to using traceable payment methods (e.g., debit, credit, or prepaid cards). This provision will also come into force in the fiscal year following December 31, 2024 (i.e., 2025 for those with a calendar-year fiscal period).

5. Traceability of representation expenses for companies (Art. 1 co. 81(d), 82 and 83)

Representation expenses and gift-related expenses will only be deductible for income tax and IRAP purposes if payments are made via traceable means, such as bank or postal transfers, debit/credit/prepaid cards, or bank/cashier’s checks.

Expenses defined as representation expenses under the Ministerial Decree of November 19, 2008, will only be deductible if:

• payment is made using the aforementioned traceable methods; and
• the quantitative limits outlined in Article 108, Paragraph 2, of the TUIR are respected.

This provision will also take effect starting in the fiscal year following December 31, 2024 (i.e., 2025 for those with a calendar-year fiscal period).

6. Digital signature of inspection reports (Art. 1 co. 86)

The implementing provisions of the Italian Revenue Agency for the digital signing of inspection reports must be issued in agreement with the General Commander of the Guardia di Finanza.

7. Revision of the “Web Tax” (Art. 1 co. 21-22)

The digital services tax (DST) under Article 1, Paragraph 35 et seq., of Law 145/2018 has been revised. The tax applies at a rate of 3% on the taxable revenue generated from digital services.

Taxable entities are businesses that:

• derive revenue from digital services under Article 1, Paragraph 37, of Law 145/2018 (provision unchanged) within Italy; and
• have total global revenue of at least €750 million in the previous calendar year.

A prepayment obligation is introduced, requiring 30% of the tax due for the previous year (calculated at 3% of taxable revenue) to be paid by November 30 of the current year.

8. VAT on training services for temporary work aqgencies (Art. 1 co. 38-44)

Training services provided:

• to entities authorized to provide temporary work under Article 4 of Legislative Decree 276/2003 (employment agencies); or
• by training organizations financed through the bilateral fund under Article 12, Paragraph 4, of the same decree,

are subject to VAT (no longer exempt). Past practices are protected for services provided before the new rule’s effective date, provided no final rulings were issued.

Pending litigation concerning VAT treatment of such services can be settled, regardless of the case’s stage, by:

• Paying the additional VAT assessed without penalties or interest, or
• Demonstrating proof of VAT payment by the service provider.

9. Extension of e-DAS usage obligation (Art. 1 co. 45)

The obligation to use the e-DAS system (“electronic simplified administrative document”) is extended to include energy products transferred in quantities not exceeding 1,000 kilograms to storage facilities not subject to declaration under Article 25 of Legislative Decree 504/95 (Excise Consolidation Act).

10. Reverse charge in the logistics sector (Art. 1 co. 57-58)

For certain services provided to companies engaged in transport and logistics activities, the following is introduced:

• the application of the reverse charge mechanism, subject to the issuance of a specific derogation measure to the VAT directive by the EU Council;
• provisionally, pending the issuance of this derogation measure, an optional regime whereby the VAT payment is the responsibility of the client.

The reverse charge mechanism is extended to services:

• performed through contracts such as subcontracting, delegation to consortium members, or other agreements characterized by the predominant use of labor at the client’s premises, using equipment owned by or attributable to the client in any form;
• provided to companies involved in transportation, goods handling, and logistics services.

11. VAT paid by the client in the logistics sector (Art. 1 co. 59-63)

For the services mentioned above, while awaiting the derogation measure authorizing the reverse charge mechanism, a transitional regime allows:

• the service provider and client to opt for VAT payment by the client, departing from the standard rules for tax compliance;
• the client to notify the exercise of this option, which lasts three years, to the Italian Revenue Agency via a specific form (to be issued by an upcoming regulation).

12. Provisions to combat tax evasion in electronic payments (Art. 1 co. 74-77)

Devices enabling the recording and telematic transmission of receipts (e.g., fiscal registers) must ensure full integration between the process of recording receipts and electronic payment processes.

Specifically:

• daily electronic payment data must be recorded and transmitted along with receipt data;
• a technical connection must exist between the devices for receipt transmission and those (hardware or software) enabling electronic payment acceptance.

To enforce these new obligations, the following penalties are introduced:

• a fine of €100 for incomplete or omitted transmission of receipts, even in cases where it does not affect periodic settlements, applies to violations involving electronic payment data storage and transmission;
• a fine ranging from €1,000 to €4,000 for failing to install devices for receipt storage and transmission also applies to cases of missing connection between such devices and those for electronic payment acceptance.

13. Reduced corporate tax rate (“IRES premiale”) (Art. 1 co. 436-444)

A “reduced corporate tax rate” (IRES premiale) is introduced, reducing the corporate income tax rate from 24% to 20% for 2025, provided the following conditions are met:

• at least 80% of the profits for the fiscal year ending December 31, 2024, must be allocated to a specific reserve;
• investments in 4.0 and 5.0 assets must be at least 30% of the allocated profits and no less than 24% of the profits from the fiscal year ending December 31, 2023;
• investments must not be less than €20,000 in any case.

Additional conditions relate to maintaining specific employment levels.

14. Tax credit for 4.0 intangible investments (Art. 1 co. 445-448)

The tax credit for 4.0 intangible investments is abolished for 2025, bringing forward its expiration to December 31, 2024.

However, investments may still qualify if reserved by December 31, 2024, with a 20% deposit and seller acceptance, provided they are completed by June 30, 2025. A maximum spending cap of €2.2 billion is introduced, and communications must be submitted to the GSE.

15. Tax credit for 4.0 tangible investments (Art. 8 co. 1-bis of DL 155/2024)

The tax credit may be granted, alternatively, to certified energy service companies (ESCo) for innovation projects performed at the client’s facilities.

The tax credit rates are increased as follows:

• 35% for investments up to €10 million;
• 5% for investments between €10 million and €50 million.

For photovoltaic systems, the base calculation (cost) is expanded. Additionally, operational leasing companies may verify energy savings based on the energy consumption of either the renting company or the lessee.

These changes apply retroactively from January 1, 2024. Projects reserved before the law’s enactment must submit communications to the GSE.

16. Super-deduction for new hires – Extension for 2025, 2026, and 2027 (Art. 1 co. 399-400)

The super-deduction for new permanent hires is extended to 2025, 2026, and 2027.

The incentive is calculated on a “rolling” basis, allowing the incremental workforce level to be determined for each tax year relative to the previous one. The increase is:

• 20% of the cost for permanent hires;
• 30% for disadvantaged workers (e.g., disabled individuals, former inmates, women in difficulty, youth).

The deductible cost is the lower of the actual cost of new hires and the overall increase in personnel costs compared to the previous year.

17. R&D tax credit repayment – Capital contribution (Art. 1 co. 458-460)

Article 5, paragraphs 7-12, of DL 146/2021 introduced a repayment procedure for R&D tax credits utilized up to October 22, 2021, limited to non-eligible expenses, waiving penalties, interest, and criminal charges.

For taxpayers who opted for this procedure, a capital contribution is granted based on the amount repaid. Budget allocations include:

• €60 million for 2025;
• €50 million for 2026;
• €80 million for 2027;
• €60 million for 2028.

18. Tax credit for investments in southern Italy – RNA registration (Art. 1 co. 541-543)

Supplementary provisions are introduced for the tax credit on investments in Southern Italy for 2018-2022.

The Ministry of Agriculture is authorized to register individual aid in the National State Aid Register (RNA) under Article 10, paragraph 6, of DM 31.5.2017 No. 115, for those not subject to grant orders. Subsequently, the Italian Revenue Agency will handle compliance.

Once registrations are complete, no recovery actions will be taken for tax credits used in compliance with EU State aid rules in agricultural, forestry, rural, and fishery sectors.

19. Tax credit for SME listings – extension to 2027 (Art. 1 co. 449)

The tax credit for consultancy expenses related to the listing of SMEs is extended until December 31, 2027.

20. Tax credit for investments in the ZES (special economic zone) of Southern Italy – extension to 2025 (Art. 1 co. 456–491)

The tax credit for investments in the ZES (Special Economic Zone) of Southern Italy has been extended to 2025, covering investments made from January 1, 2025, to November 15, 2025.

21. Tax credit for agricultural sector investments in the ZES of southern Italy – extension to 2025 (Art. 1 co. 544–546)

The tax credit for investments in the ZES of Southern Italy, particularly for the agricultural sector, has also been extended to 2025 for investments made between January 1, 2025, and November 15, 2025.

22. PMI guarantee fund (Art. 1 co. 450–454)

The operation of the Guarantee Fund for SMEs has been extended until December 31, 2025, with some modifications to its rules.

23. Tax credit for hotel renovations (Art. 14 co. 1 of DL 202/2024)

A tax credit of up to 80% is granted to tourism and accommodation operators (hotels, agritourism businesses, outdoor accommodation providers, and businesses in the tourism, recreation, exhibition, and conference sectors, including beach establishments, thermal complexes, marinas, theme parks, water parks, and wildlife parks).
The credit applies to expenses incurred for renovations and improvements specified in paragraph 5, Art. 1, of DL 152/2021 and carried out from November 7, 2021, to October 31, 2025.

A similar extension applies to the related non-repayable grant.

24. Mandatory PEC for company administrators (Art. 1 co. 860)

Company administrators are required to communicate their PEC (Certified Electronic Mail, referred to as “digital domicile” under Art. 1, paragraph 1, letter n-ter of Legislative Decree 82/2005) to the Business Register.

However, according to clarification by the Business Register of Milan, the certified email address of the managed company can also be used by the company’s administrators as their digital domicile.

Consequently, when administrators are registered in the Business Register along with the company’s incorporation (for partnerships and corporations), the company’s PEC may also serve as the administrators’ PEC.
This means that an administrator can designate the company’s PEC as their digital domicile, representing the certified email address assigned to the company in question.

25. Extension of deadline for mandatory catastrophic risk Insurance (Art. 13 of DL 202/2024)

The deadline for companies with legal headquarters in Italy or foreign companies with a permanent establishment in Italy to comply with the obligation to purchase insurance coverage for catastrophic risks has been extended to March 31, 2025.

The insurance must cover:

• assets listed under Art. 2424, paragraph 1, of the Italian Civil Code (Balance Sheet), Section Assets, Item B-II, numbers 1, 2, and 3 (land and buildings, plant and machinery, industrial and commercial equipment);
• damages directly caused by natural disasters and catastrophic events occurring in the national territory (earthquakes, floods, landslides, inundations, and overflows).

26. Daily credit transfers for electronic payments (Art. 1 co. 66–67)

For payments made using electronic instruments other than wire transfers, payment service providers are required to credit the daily amounts to the beneficiary by 12:00 PM on the next working day following receipt of the payment order, ensuring the same-day value date.

Payment service providers must comply with these requirements within 180 days from January 1, 2025.