The 2020 fiscal manoeuvre brings lots of news also in relation to job markets. Beyond introducing new incentives for recruitment, certain benefits have been confirmed and most importantly a reduction in the tax wedge has been put into place. Moreover, in the text we can find some news that will have an impact on the regulation of work relationships and social welfare. Lets see the 10 main updates.
1 - Reduction of the tax wedge. The 2020 budget law has instituted the “Fondo per la riduzione del carico fiscale sui lavoratori dipendenti (the Fund for the reduction of the tax burden on the employed)” with an allocation of 3 billion euro for the year 2020 and 5 billion euro for the year 2021. The implementing decree that details the matter reshapes the 80 euro bonus introduced by the Renzi government, increasing it to 100 euro, and extending it to employees with an income of up to 40 thousand euro per year.
2 - Reduction in contributions for apprentices. To sustain micro-companies and promote youth employment, a total tax reduction is granted, for the 2020 contracts, to the employers that give jobs to a number of staff with a first level apprenticeship contract equal to or lower than 9. The reduction in contributions, 100% provided for in the manoeuvre , is applied for the period of contributions that have been matured in the first three years of contract.
3 - Employment bonus for exceptional youths. So far the bonus for exceptional youths was purely at a proposal stage, in anticipation of an INPS memo, but it has now been ratified. From 2020 the exoneration from the payment of social security, with the exception of premiums and contributions, for a maximum period of 12 months from the date of employment and to a maximum limit of 8.000 euro for each hiring, is granted to private employers who hire with a long term contracts citizens with a master’s degree cum laude (graduation between January 1, 2018 and June 30, 2019). The degree must have been completed within the legal length of the program and before the graduates’ thirtieth birthday; while for citizens with a Doctorate it must have been obtained in the period between January 1, 2018 and June 30, 2019 and before their thirty-fourth birthday.
4 - Bonus for hiring under 35 year olds. For recruiting people under the age of 35, from this year on the reduction of social security contributions is applied monthly, for a maximum period of 36 months and the extent of the tax reduction is equal, within the limit of 3.000 euros annually, to 50% of contributions borne by the employer. The reduction of contributions is applicable also to cases where the contract is being changed from short to long term. A reduction of 100% of the same contribution base for recruitment, within six months of the achievement of the diploma or degree, of students who have carried out work placement activities with the same employer (for a specific number of hours) or periods of apprenticeship for the diploma is applied. The reduction in contributions for workers under the age of 35 goes up to a maximum of 100% for hirings under 35 in the Southern regions.
5 - Employment bonus for Citizenship Income recipients. Active since November 15, 2019, the tax cut for those who hire Citizenship Income beneficiaries has been confirmed. INPS (the Italian Social Security administration) has disclosed that in the benefits Portal the application form is available. The incentive will last a varying amount of time based on the period of use of the Citizenship Income already benefitting the employed worker.
The 2020 budget law has instituted the “Fondo per la riduzione del carico fiscale sui lavoratori dipendenti (the Fund for the reduction of the tax burden on the employed)” with an allocation of 3 billion euro for the year 2020 and 5 billion euro for the year 2021
6 - Female athletes bonus. A female athlete bonus for sports teams who in the years 2020, 2021 and 2022 will enter into sports work contracts with female athletes has been introduced. The incentive consists in a total exoneration of the payment of social security and welfare contributions up to a limit of maximum 8.000 euros per year.
7 - Young farming entrepreneurs. The farmers and professional farming entrepreneurs who are younger than 40 years of age, who between January 1 and December 31 2020 will enrol in agricultural social security, do not have to pay the full 100% of the credit to the general obligatory insurance for disability, retirement and survivors, for a period of maximum 24 months.
8 - VAT numbers. The budget law, though maintaining the 15% flat tax for VAT numbers whose income doesn’t exceed 65 thousand per year, has introduced two limitations: 1) To access tax concessions the limit is 20 thousand gross a year for compensation payed to employees or collaborators, in relation to accessory work, project work, paid employment; 2) The taxpayers who last year earned more than 30 thousand euro in paid employment or similar are excluded from the tax concession.
9 - Tenders. Starting January 1, 2020 and for all contracts, subcontracting and consortium member entrustment, in which the entrustment of completion of one or more public works or one or more services must be of a total amount of over 200 thousand compared to a single contracting company, the latter must take responsibility for checking the regularity of the payment of the withholding taxes on the compensation of workers employed for the completion of the works or the execution of the service that is the object of the contract. The contractor or appointed company and the subcontracting companies must pass on to the ordering party the payment proxies and a list of names of all workers, with a detailed list of hours worked and of the amount payed to the employee.
10 - Naspi. Employees are allowed to receive Naspi (unemployment benefits) as a form of contribution to entrepreneurship in one payment when this is payed as a social equity share in a cooperative, within which the mutualistic relationship foresees work activities on the part of the member.