The 2025 Budget Law introduces a wide range of tax measures to support employees and families, aiming to boost disposable income and reduce the tax burden. A notable aspect is the stabilisation of tax cost revaluation of land and shareholdings at a rate of 18% (Article 1, paragraph 30). For further details, please refer to our dedicated article. On the preferential assignment of assets to shareholders and the conversion into a simple partnership (Article 1, paragraphs 31-36), we have also detailed this in a recent in-depth analysis. We have also discussed the implementation of the 2024 personal income tax (IRPEF) reform (Article 1, paragraphs 2 and 3).
A significant intervention of the 2025 Budget is around the adjustment of the so-called “cuneo fiscale” (tax wedge). This will no longer be implemented through social security contribution exemptions for employees but exclusively through tax measures. From 2025, a bonus or additional tax deduction mechanism will be introduced, reserved solely for those with income from employment, excluding pensions and similar allowances.
On deductions, a significant change is planned for individuals with a total income exceeding €75,000. The new rules introduce a calculation method based on the number of dependent children and net income, net of income from the main house. Excluded from this limitation are tax-deductible healthcare expenses, investments in start-ups and innovative SMEs, interest on mortgages or agricultural loans contracted by 31 December 2024, and life, accident, and disaster insurance policies taken out by that same date. Furthermore, all expenses incurred up to 31 December 2024 that generate deductible instalments (e.g., building renovations and eco-bonus) continue to benefit from the previous regime.
The temporary modification to the flat-rate regime is also key, which, for 2025 only, can be applied by those who received income from employment and similar sources not exceeding €35,000 (instead of €30,000) in 2024. This measure aims to benefit a wider range of self-employed individuals without compromising overall fiscal sustainability.
SUMMARY
- Reduction of Substitute Tax on Performance Bonuses
- Housing Incentives: Building Bonuses and Superbonus Updates
- Digitalisation and Traceability: New Rules for Businesses and Professionals
- Investment Incentives: Bonus IRES, Transition 4.0, and New Sabatini
- Measures for Individuals: Crypto-Assets, Fringe Benefits, and First-Time Homebuyer Fund
- Indication of the National Identification Code (CIN) in Tax Returns and the Single Certification (Certificazione Unica)
- Appliance Bonus 2025
1. REDUCTION OF SUBSTITUTE TAX ON PERFORMANCE BONUSES↑
To incentivise company productivity, the 2025 Budget addresses the taxation of performance bonuses. The substitute tax on personal income tax (IRPEF) and related surcharges is reduced from 10% to 5% for sums paid to employees in 2025, 2026, and 2027.
This measure aims to make the use of bonuses linked to increases in productivity, profitability, quality, efficiency, and innovation more advantageous for both employers and employees.
2. HOUSING INCENTIVES: BUILDING BONUSES AND SUPERBONUS UPDATES ↑
The 2025 Budget gives significant attention to tax measures related to real estate, particularly building bonuses. The traditional “house bonus,” relating to the personal income tax (IRPEF) deduction for building renovation work, is reconfirmed but with adjusted rates:
- For expenses incurred in 2025 on properties used as a main residence, a 50% deduction applies, up to a maximum of €96,000.
- In subsequent years (2026-2027), the rate drops to 36%.
- For properties other than the main residence, the deduction is set at 36% in 2025 and 30% in the following two years.
- Excluded from the benefit, starting from 1 January 2025, are interventions involving the replacement of heating systems with single fossil fuel boilers.
Ecobonus, Sismabonus, Furniture Bonus
On the ecobonus and sismabonus, the deductions are extended but with lower rates:
- For main residences, the tax benefit will be 50% in 2025 and 36% from 2026.
- For other properties, it drops to 36% in 2025 and 30% in subsequent years.
- The furniture bonus is also confirmed for 2025 and provides a 50% deduction for the purchase of furniture and large appliances (with appropriate energy classes) for the renovated property, up to a spending limit of €5,000.
Finally, superbonus undergoes a significant downsizing. The rate drops to 65% for expenses incurred in 2025, applicable only if the CILA-S (and, for apartments, the shareholders’ resolution) is submitted by 15 October 2024. Only interventions related to special regulations for seismic events (110% rate) and those relating to RSAs (residential care homes for the elderly) are excluded from this restriction. For expenses incurred in 2023, a ten-year credit deferral option is introduced, replacing the current four instalments. This option is irrevocable and must be exercised through an amended tax return.
3. DIGITALISATION AND TRACEABILITY: NEW RULES FOR BUSINESSES AND PROFESSIONALS ↑
Among the most relevant fiscal streamlining measures of the 2025 Budget Law are those aimed at strengthening the traceability of business and professional expenses. Starting from 2025, reimbursements for food, accommodation, travel, and transport expenses (incurred by taxi or hired car with driver) will not contribute to employee income if paid using traceable payment methods, such as bank transfers, cards, or cheques. The same condition applies to the deductibility of these expenses for corporate income tax (IRES) and regional tax on productive activities (IRAP) purposes.
Similar obligations also apply to professionals. Expenses charged to clients or reimbursed for business trips must be traceable to be deductible. Furthermore, representation and gift expenses, for deductibility purposes, must be paid through traceable means and fall within the existing quantitative limits.
In terms of digitalisation, a new requirement mandates company directors to have a digital domicile (certified email address, PEC) and communicate it to the Business Register. Starting 1 January 2025, this obligation applies to newly established companies, while existing companies have until 30 June 2025 to comply.
4. INVESTMENT INCENTIVES: BONUS IRES, TRANSITION 4.0, AND “NEW SABATINI” ↑
The 2025 Budget stands out for its particularly favourable approach to business investments, with the aim of accelerating the technological and environmental transition of Italian companies. Among the most significant innovations is the introduction of the bonus IRES (corporate income tax). For 2025 only, companies allocating at least 80% of their 2024 profits to reserves and investing in 4.0 or 5.0 capital goods (including leasing) will benefit from a reduced rate from 24% to 20%. This is coupled with the obligation to make new permanent hires, increasing employment by at least 1% compared to 2024.
The benefit is extended if the allocated profits are distributed within two years or if the purchased goods are sold or transferred abroad within five years.
The tax credit for 4.0 investments is confirmed for tangible assets, with the introduction of a spending cap and the obligation to submit prior notifications. The incentive for intangible assets is repealed. The 5.0 tax credit is enhanced, with the rate increasing to 35% up to €10 million, and the calculation basis for photovoltaic systems is broadened.
Finally, the “New Sabatini” is refinanced with €400 million for 2025, €100 million for 2026, and another €400 million for each year from 2027 to 2029, confirming its role as a key instrument for supporting SME investments.
5. MEASURES FOR INDIVIDUALS: CRYPTO-ASSETS, FRINGE BENEFITS, AND FIRST-TIME HOMEBUYER FUND ↑
Completing the 2025 Budget Law are some measures for individuals, particularly high-net-worth individuals (HNWIs) and young families. From 2026, the tax on capital gains and other income from crypto-assets will be 33%, eliminating the €2,000 allowance. A transitional regime with a substitute tax of 18% as of 1 January 2025 is also envisaged to neutralise the value of crypto-assets held at that date.
Regarding company benefits, the exemption threshold for fringe benefits is raised to €1,000 per year for all employees, increased to €2,000 for those with dependent children. Reimbursements for household utilities, rent, or mortgage interest on the main residence also fall within these limits. The reduced 5% taxation on performance bonuses is extended until 2027.
Important changes are also introduced for housing. The first-time homebuyer benefit no longer expires if the property is sold within two years (instead of one). The First-Time Homebuyer Guarantee Fund is extended until 2027, with its operation extended to cover up to 80% of the financed amount for young people under 36, single-parent families with minors, and tenants of public housing. This is conditional on an ISEE (Equivalent Economic Situation Indicator) of less than €40,000 and financing exceeding 80% of the property value.
Finally, a 50% contribution reduction is granted for 36 months to those newly registered with the INPS artisan and commercial management schemes in 2025, including those under the flat-rate regime. This measure aims to facilitate the start-up of new businesses and encourage active participation in the national productive fabric.
6. INDICATION OF THE NATIONAL IDENTIFICATION CODE (CIN) IN TAX RETURNS AND THE SINGLE CERTIFICATION (CERTIFICAZIONE UNICA) ↑
This year’s Budget Law introduces specific changes regarding holiday rentals and accommodation. In particular, it requires that tax forms approved by the Revenue Agency must include provisions for indicating the National Identification Code (CIN) in tax returns and the Single Certification (Certificazione Unica). The CIN must be assigned to:
- Residential properties intended for tourist rental contracts;
- Properties used for short-term rentals;
- Hotel and non-hotel accommodation facilities.
This new requirement also extends to communications from intermediaries involved in short-term rentals, aiming to strengthen traceability and compliance within the sector.
7. APPLIANCE BONUS 2025 ↑
Among the measures for families, the 2025 budget includes a contribution for purchasing high-energy-efficiency appliances. The benefit, granted for one appliance per household, is subject to two conditions:
- The appliance must have an energy class no lower than B and be manufactured within the European Union;
- Proper disposal of the replaced appliance.
The contribution can cover up to 30% of the purchase price, up to a maximum of €100, which increases to €200 for households with an ISEE no higher than €25,000 per year, within the established overall spending limits.
