We inform you that the Council of Ministers has approved Law Decree No. 84/2025 (the “Fiscal Decree”), published in the Official Gazette on 17 June and effective as of the following day.
Fiscal Decree introduces a broad package of tax measures impacting a wide range of taxpayers, including corporations and self-employed professionals.
Below is an overview of the main provisions of interest:

Extension of tax payment deadlines for ISA and flat-rate taxpayers

For taxpayers subject to ISA (economic reliability indexes) and those applying the flat-rate regime:

• the deadline for the payment of 2024 balances and 2025 first advance payments (for income tax, IRAP, and VAT) is postponed to 21 July 2025;
• payments made by 20 August 2025 will be allowed with a 0.4% surcharge;
• the extension also applies to substitute tax payments based on agreed income.

Late filing amnesty – 2024 tax returns

Tax returns submitted by 8 November 2024 (originally due by 31 October) will be deemed late but validly filed.
Please note that penalties already paid under previous amnesty schemes (ravvedimento operoso) will not be refunded.

Tax treatment of expenses for employees and self-employed persons

Fiscal Decree clarifies the tax deductibility and reimbursement criteria for travel, board, lodging, and transportation expenses:

• for employees, reimbursements are non-taxable only if the expenses are incurred within Italy and paid through traceable means;
• for self-employed persons, deductions are allowed only for itemised expenses, incurred in Italy, and paid with traceable instruments;
• entertainment expenses are deductible solely if traceable, irrespective of location.

Miscellaneous income, capital income, and self-employment income

Fiscal Decree introduces clarifications and amendments regarding the classification of income:

• capital gains from the disposal of participations in unincorporated professional associations or partnerships are treated as miscellaneous income, taxable at a 26% substitute tax;
• interest and similar income earned by professionals qualifies as capital income;
• depreciation and lease costs for mixed-use assets are deductible proportionally to professional use.

Corporate loss carry-forward regime

Significant changes are introduced concerning the carry-forward of tax losses, particularly in the context of extraordinary transactions (e.g. mergers, contributions, demergers):

• the rules are simplified, replacing the economic equity test with a new quantitative threshold based on twice the amount of capital contributions made in the 24 months preceding the transaction;
• in mergers, deductible losses are now determined under objective criteria, removing the need for complex equity valuations;
• contributions of businesses are aligned with demerger rules, ensuring tax neutrality across reorganisation structures;
• the exclusion of business transfers from the loss carry-forward benefit is removed, allowing greater flexibility in restructuring.

Labour cost super deduction for new hires

Fiscal Decree clarifies that, for the purposes of the enhanced deduction on labour costs relating to open-ended employment contracts (art. 4, Legislative Decree no. 216/2023), the increase in workforce must be determined net only of reductions in force occurring in subsidiaries as defined by Article 2359 of the Italian Civil Code, or otherwise attributable (even indirectly) to the same controlling entity.
This simplification applies from the tax period following 31 December 2023.

Controlled foreign companies (CFC)

The CFC regime is revised in line with international standards:

• effective foreign tax is calculated on net accounting profits, regardless of shareholding percentage;
• such tax is non-deductible, but relevant for meeting the conditions for dividend exemption;
• a three-year, irrevocable and renewable option is introduced to facilitate a simplified regime.

Hybrid mismatches

Hybrid mismatches arise where differences in tax treatment between jurisdictions result in double deductions or deductions without corresponding income inclusion.
To counter such mismatches, Fiscal Decree clarifies that the deadline for preparing appropriate documentation (for penalty protection) and for disclosing its possession is aligned with the tax return deadline for the fiscal year including 6 December 2024. For calendar-year taxpayers, the relevant date is 31 October 2025.

Reverse charge mechanism

The reverse charge mechanism is extended to include:

• logistics and freight transport services;
• the requirements regarding the predominance of labour at the client’s premises and use of the client’s capital goods are removed.

The effectiveness of this measure is subject to EU Council authorisation.

Elimination of split payment for FTSE-MIB companies

Effective 1 July 2025:

• transactions with FTSE-MIB listed companies will no longer be subject to split payment;
• this follows the expiry of the relevant EU derogation and the consequent repeal of the Italian provision.

The Tax Team of LEXIA remains available to provide further insights and tailored support on the practical application of the above measures.