News coming for restaurant and hotel employees: The government has decided to cut the tip taxes, but what changes? It is one of the innovations introduced in the draft Budget Law approved by the Council of Ministers the 21 November. For "staff employed in the hospitality sector and in the administration of meals and drinks", tips will be taxed at 5% and not according to ordinary taxation. The Government's objective is to encourage employment in the tourism sector which is still struggling to find personnel and to encourage the emergence of irregular employment relationships and, obviously, raise cash.
But if the end is clear, the "means" is not so clear. In Italy, the possibility of leaving tips with a credit card is neither widespread nor regulated. But it is much more common to leave it instead cash tip which end up directly in the pockets of the worker, thus escaping the taxation is ordinary o facilitated.
To tell the truth, the new law also provides for the detaxation of tips given in cash, but here in Italy we know that they are not counted on the receipt.
5% tip tax: what changes?
The maneuver establishes that in all the private structures listed in article 8 of the Tourism Code - therefore also hotels - and in commercial establishments that offer meal or drink administration services, such as bars and restaurants, thetip tax rate will be lowered to 5%.
The reduced levy, which must be withheld by the employer, is applied for a quota not exceeding 25% of annual income and for one maximum of 50 thousand euros. Furthermore, the draft clarifies that "the substitute tax is applied by the withholding agent".
Since when do you pay tax on tips?
La tax on tips it was confirmed in the Italian legal system by the Cassation court, in 2021, accepting the appeal of the Revenue Agency engaged in a dispute with the concierge of a luxury hotel on the Costa Smeralda who had not declared 84 thousand euros in tips in one year. According to the Cassation, even tips are work income and therefore must be subject to ordinary taxation.
Useful move or a hole in the water?
The proposal comes from the new Minister of Tourism, Daniela Santanchè, but it is not an innovative idea and indeed, it shows many weaknesses. In September on France President Emmanuel Macron has announced the complete detaxation of all tips paid by ATM and card. Not only. He also increased the minimum salary, bringing it to about 11 euros per hour, thus giving more concrete and immediate help to workers in the sector. Secondly, in Italy you pay the cover charge (which usually discourages further spending), while in France there isn't and even water is given free of charge. Therefore it is difficult to think that the Government can achieve the desired objectives with this move.
