The Italian Revenue Agency, in a recent circular, No. 15/E of 2023, has focused its attention on expenses that qualify for deductions from income, tax credits, tax deductions, and other relevant elements for the completion of personal income tax returns.
As stated in the document under examination, the goal of this assemble (which follows the previous circular No. 14/E) is to provide, in compliance with the principles of transparency and, above all, collaboration enshrined in the Taxpayer’s Bill of Rights, a unified tool to ensure consistent application of the rules throughout the national territory for all operators.
The following are the main categories that allow for the deduction of expenses from the overall income.
Deductibility of Social Security and Welfare Contributions:
Sums paid as social security and welfare contributions in compliance with legal provisions are deductible from the overall income. This includes voluntary contributions made to mandatory pension schemes, regardless of the cause for making the payment.
Importantly, as clarified by the Agency, contributions are deductible even if made on behalf of dependents for tax purposes.
Deductibility of periodic alimony payments to the spouse:
As clarified by the Agency, it is possible to deduct from the overall income, periodic payments made to the spouse following the dissolution or annulment of marriage or the cessation of its civil effects, even if the spouse resides abroad.
However, it is important to note that the paying spouse does not deduct the portion allocated for child support.
Additionally, any other amounts paid to the spouse as an ISTAT adjustment (a measure of consumer price inflation) are deductible only if the court’s judgment expressly provides for an automatic adjustment criterion for the alimony owed to the other spouse.
Similarly, sums paid as arrears, even if paid in a lump sum, are considered an integration of the periodic alimony payments made previously and are assimilated into those payments.
Deductibility of Charitable Donations, Gifts, and other gratuitous acts in favor of trusts or Special Funds:
Starting from the 2016 tax year, charitable donations, gifts, and other gratuitous acts made by private individuals to trusts or special funds established for the protection of severely disabled individuals without family support are deductible up to 20% of the declared overall income, with a maximum limit of €100,000.
Deductibility of Contributions for Domestic and Family Service Workers:
As clarified by the Agency, contributions made for social security and welfare of domestic service workers (such as drivers, gardeners, etc.) and personal or family assistance workers (such as housekeepers, babysitters, assistants for the elderly, etc.) are deductible from the total income for the portion the employer is responsible for.
This deduction also applies to social security contributions paid for a caregiver hired through a temporary work agency and reimbursed to the agency, provided that the agency issues a certification stating the amounts paid, personal details, and tax identification number of both the payer (user) and the worker. Social security contributions for domestic service workers paid to the INPS (National Social Security Institute) management through the “libretto famiglia” (family booklet), can be deducted from the overall income as they are fully responsibility of the user (employer).
For each hour of work, equivalent to a payment unit, a deduction of €1.65 can be made as IVS contribution (invalidity, old age, survivors) to the separate INPS management.
