Tax credit with spending caps and extension of relief for new hires. After weeks of analysis and the postponement of the decision from the Senate to the House, the plan for the South takes shape, which the Government wants to include in the 2016 Stability Law. The two measures that make up the package are contained in an amendment by the Executive to the manoeuvre, currently under examination by the Montecitorio Budget Commission. The final go-ahead to the law should arrive by December 23, the last day before the Christmas holidays.
1) VARIABLE TAX CREDIT ACCORDING TO THE SIZE OF THE COMPANY AND WITH EXPENDITURE CAPS
In detail, the Government's first proposal provides for a four-year tax credit (2016-2019) for companies in the South and divided into three brackets and with different spending thresholds.
The scheme is as follows:
tax credit of 10 % for large companies on investments up to 15 million euro;
tax credit of 15 % for medium-sized companies on investments up to 5 million euro;
tax credit of 20 % for small companies on investments up to 1,5 million euro.
From the technical report that accompanies the amendment, it emerges that "a value of eligible investments can be estimated equal to one third of investments in the South for about 4,167 billion euros annually”. In terms of coverage, the measure is financed with 617 million euros a year, for a total of 2,5 billion euro.
2) STRENGTHENING OF RELIEF FOR NEW HIRES SUBJECT TO THE GO-Ahead FROM BRUSSELS
As for the relief for new hires, the law of stability provides for companies throughout Italy the 40% deduction (for a two-year period) on the new ones permanent employment made in 2016. The new government amendment actually contains an extension for southern companies, which could also benefit from this measure for hiring in 2017. An increase in the deduction rate is also possible.
However, the enhancement of the work relief in favor of the South is subject to the go-ahead from the European Commission and will depend on the outcome of a survey of the available resources of the Revolving fund among those already destined for the interventions of the CAP (cohesion action plan), which must be carried out by 31 March 2016 and the novelty will be.
The government's proposal states that "by 31 March 2016" a "recognition of the resources of the revolving fund already allocated to the interventions of the Cohesion Action Plan (CAP), not yet subject to legally binding commitments with respect to the approved time schedules, must be carried out ” and “with Dpcm, adopted in agreement with the Ministry of the Economy and the Ministry of Labour, the amount of resources available following the survey is quantified” to order “the use of the same for the extension of hiring at permanent contract of the year 2017 operating in the Regions Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia and under the same conditions” as this year's relief, “possibly remodulating the duration and intensity of the exemption based on the resources that will become available”. The effectiveness, the amendment specifies, "is subject to the authorization of the European Commission".
