Tax reform: among the measures under study are the lowering of the tax rate for incomes between 28 thousand and 55 thousand euros, the abolition of Irap, the revision of the flat-rate regime for self-employed workers and interventions on the incomes of 'business. Precise indications on the reform of the tax on individuals and other aspects of the tax system arrive from the Finance commissions of the House and Senate, at the end of a large cycle of hearings and with the approval of a guideline document for the government.
Given that it is "appropriate to maintain individual income as the tax unit of personal income tax", the document however points out that "the structure of the IRPEF must be substantially redefined" through two interventions:
- the lowering of the effective average tax rate, with particular reference to taxpayers in the 28.000-55.000 income bracket;
- the modification of the dynamics of the effective marginal tax rates, eliminating the most abrupt discontinuities.
As for tax expenditures relating to the consumption of particular goods or services, a reduction in their number and a simplification of the system are considered indispensable.
TAX REFORM: LOCAL ADDITIONALS
We suggest a transformation of the local tax instruments into surcharges – therefore having the tax debt as the taxable base, and not the Irpef taxable base itself – whose maneuverability within a predefined range would remain with the local authority.
TAX REFORM: SELF-EMPLOYMENT
Since "the current flat-rate regime presents some critical issues" due to the fact that in the event of exceeding the maximum threshold of annual revenues and fees for accessing and maintaining the facilitated regime, the taxpayer abruptly switches to the regime for the following year ordinary IRPEF, "with a significant increase in terms of both taxation and greater fulfilments", the commissions suggest the introduction of a transitional regime that accompanies the taxpayer towards the transition to the ordinary IRPEF taxation regime. In particular, for the case in which the taxpayer, in a given tax period, achieves an amount of revenue or compensation higher than the current threshold of 65.000 euros but lower than a suitably identified ceiling, the introduction of an optional regime - with the choice irrevocable by the taxable person – for the continuation of the flat-rate regime in the two subsequent tax periods.
As for the payment of taxes, the commission proposes payment by installments, with the payment of the balance and the first advance in six equal monthly installments from July to December of the same year; furthermore, the payment of the second advance either in a lump sum by 31 January of the following year or in six equal monthly installments from January to June of the following year. The payments would obviously take place without the application of any sanction and/or interest.
TAX REFORM: IRI
We come to business income. The re-introduction of the optional IRI regime is proposed (introduced by article 1, paragraph 1063, of the law n. 205 of 27 December 2017, maneuver 2018, subsequently repealed without ever being applied) which provides for sole proprietorships and partnerships in ordinary accounting the possibility of opting for the application of a proportional rate on condition that the profit produced is re-invested in the company, without prejudice without prejudice to the possibility of deducting from the business income the sums withdrawn by the shareholders for distribution, which in turn is ordinarily taxed in Irpef.
TAX REFORM: FINANCIAL INCOME
In our legal system there is a distinction between income "from capital" and income "different of a financial nature" which - the document notes - "does not have substantial economic reasons linked to the different nature". While capital income is taxed gross (of both expenses and capital losses), other income of a financial nature is taxed net of both components (the excess capital losses are deductible from the capital gains within the four tax periods following that of I realize). This situation "generates significant distortions that affect the efficiency of the capital market and are not consistent with a pro-growth approach". Hence the proposal for the unification of the categories "investment income" and "other income" in a single category called "financial income", simultaneously providing for the appropriate safeguards to avoid avoidance through the instrumental realization of capital losses.
TAX REFORM: IRAP
With a view to simplifying the tax system, and within an overall reform framework in which to evaluate the aspects of redistribution of the tax burden, it is agreed on the need for a reform that leads to the overcoming of the Regional Tax on Productive Activities through a reabsorption of Irap revenue in currently existing taxes.
TAX REFORM: IRES
On company income it is suggested to intervene on three types of incentives:
- incentives for behavior in line with the ecological transition;
- incentives for aggregations of smaller businesses;
- incentives to re-invest profits in investments aimed at improving productivity at the company level, as well as company policies aimed at creating additional jobs.
The above incentives can alternatively take the form of a reduction in the applied rate or in the tax base, and should summarize the other types of incentive currently present, in order to obtain a clear and simplified framework. And also in order to allow for a more immediate benefit for the company, the commissions believe it is useful to consider the introduction of the so-called "carry back" mechanism, by virtue of which the deductibility of losses accrued in a specific year is allowed, not only from subsequent years but also from the immediately preceding year. The document then recommends extending the range of taxpayers who can access the "cooperative compliance" regime to companies with a turnover of no less than one billion euros.
TAX REFORM: VAT
Finally, the Commissions deem it appropriate that the announced draft law on tax matters contain a specific delegation to the Government for the redefinition of the VAT discipline for the purposes of its appropriate simplification and possible reduction of the ordinary rate currently applied.
