(Finance) – The measures tax indicated in the Legislative Decree (n. 216/2023), relating to the reform of IRES and other income taxes, would have overall negative cash flow effects on companies, with an increase in withdrawal IRES which would reach 10.2% in 2024. The tax increases to a greater extent for companies belonging to other services (15.6%) and for those which, according to an indicator of economic and financial sustainability, are “at risk” and “highly at risk” (over 20%). This is what emerges from a report published byIstat relating to the effects of tax measures on businesses
According to simulation of the Institute of Statistics, the introduction of the deduction of the cost of labor for employment growth will affect only 5.6% of companies, while 25.3% of companies will be disadvantaged by the suppression of theACEthrough the elimination of the deductibility of the notional remuneration of equity capital (new shares and self-financing).
THE changes regulations analyzed here determine in 2024 a median effective rate of the IRES tax on business income – an increase of a quarter of a point compared to the previous legislation – equal to 19%, a value well below the legal rate (24%). The businesses who will no longer be able to benefit from the deduction ACE will suffer an increase in the effective IRES rate equal to one percentage point, while the group of companies that have not benefited from the ACE will obtain a reduction in the effective rate equal to 0.8 percentage points. Also considering the component IRAP weighing on business income, the median effective rate reaches 24%.
The tax burden indicators on production factors highlight how the repeal of the ACE makes the use of equity capital more expensive than the third party capital (+2.5 percentage points), directing companies’ financing choices more towards debt rather than towards greater capitalizationwhile the increase in the cost of deductible labor in the presence of hiring reduces the tax wedge on labor for the employer by 0.9% (-1.3% for disadvantaged categories), in relation to permanent hiring.
Starting from September 2024, after the entry into force of the new cohesion policyand, the total tax burden that employers will have to bear for hiring women will be lower than in 2023. On the contrary, the benefit tax for the hiring of young will be lower in 2024 than in 2023. For hiring employees in the Southern regions, the reduction in the overall tax burden for the employer will be higher than in 2023, but only for companies with up to 10 employees.
The incremental mechanism of the ACE guaranteed an increasing reduction of the tax burden over time. In terms of the contribution to the IRES revenue, the companies that benefited most from the tax relief The most affected by increases in equity capital are innovative companies, both in manufacturing and services, smaller companies (with a turnover of up to 2 million euros), and “at risk” companies.
In the first 10 years of application of the ACE (2011-2021), the mobility of companies towards higher levels of economic and financial sustainability it is more evident among ACE beneficiary companies than among non-beneficiary companies.