The Italian Budget Law for 2025 (Law No. 207 of December 30, 2024) introduces the innovative IRES Premiale regime. It allows companies to apply a reduced corporate tax rate of 20% instead of the standard 24%, provided they meet a series of requirements.  

This measure offers significant tax relief for the 2025 fiscal year as part of a temporary strategy ahead of the upcoming tax reform outlined by Delegated Law No. 111/2023.  

Which companies benefit? 

The benefit is reserved for corporations, cooperatives, and active commercial entities in Italy. However, companies must not be liquidating, as well as carry out regular business activities in 2025.  

Which requirements are obliged to comply? 

To access the reduced tax rate in Italy, companies must meet several key conditions:  

  • Reserve 80% of their 2024 profits, properly recorded in their financial statements.  
  • Invest in Industry 4.0 or 5.0 assets with a minimum of 30% of the reserved profits (or 24% of 2023 profits, whichever is greater).  Financing will be considered among those carried out between January 1, 2025, and the time of filing the corresponding tax declaration. 
  • Maintain and increase employment: the number of full-time equivalent (FTE) employees must not decrease compared to the average of the previous three years. Additionally, there must be at least a 1% increase in permanent employees.  
  • No use of Cassa Integrazione (temporary unemployment schemes) in both 2024 and 2025, except in exceptional cases such as adverse weather events not attributable to the company.  

Other considerations 

Furthermore, specific provisions apply to tax-consolidated groups and companies under the fiscal transparency regime, allowing the benefit to be extended to the group or to shareholders, as applicable.  

Conclusion 

This regime presents a strategic opportunity for Italian companies planning investment and hiring. However, taking full advantage of the incentive requires careful planning, strong accounting strategies, and strict deadline management. In a dynamic regulatory environment, specialized support is crucial to maximize the fiscal benefits offered by the IRES Premiale.  

If you are interested in expanding to Italy with your multinational or investment fund, do not hesitate to contact us for efficient and convenient management of your tax obligations there or in any of the more than 50 jurisdictions where we operate. 

We invite you to contact us via our form for a personalized consultation. 

At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 22 proprietary subsidiaries, our advanced technological platform and proven methodology enable us to guarantee efficient management in compliance with local regulations. 

Can Auxadi help?

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.

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Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance, payroll, transfer pricing, and corporate legal services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 26 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.

All information contained in this publication is up to date on 2024. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.