Tax, corporate tax down by 10% in 2014 to 2.6 billion savings – The Republic

Milan – The corporate tax fell by 9.9% in 2014, with savings of 2.6 billion. And ‘what Istat calculates a working paper on “The effective taxation of taxation in Italy.” News that comes in the midst of the political debate on whether to operate the announced (by the Prime Minister Matteo Renzi) cuts to the tax burden of families, in particular reducing the taxation on the house, rather than – as some suggest – continue lighten up weight on the work and the company.

Istat said, looking at last year, the decrease is due to the measures on ACE (Aid to growth) and Irap. More than half of companies, namely 57.3%, had so a pressure lower tax. The document by Antonella Caiumi and Lorenzo Di Biagio, which uses a new microsimulation model based on tax returns of enterprises to analyze the impact of recent reforms of corporate taxation, look at last year, so there is still suffering from the more substantial reduction of Irap, which can now be removed from the cost of labor, and in contributions on new hires with the Jobs Act, which came into force this year.

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In particular, we analyzed the effect on the 2014 accounts of three measures: the enhancement that allows the Ace of deducting the notional return of capital, the largest deductibility of labor costs and the new business tax treatment of losses introduced in 2011. The cost to the exchequer of the deductibility of Irap are around 1.2 billion a year and lead to a tax cut of 4.5 % for businesses. The Ace, however, four years after its introduction, weighing on state coffers 1.4 billion (60% more than estimated in the first year of application) and involves a tax cut for companies of 5, 4%.

This measure, according to the authors, is “the most effective way to stimulate growth” and its benefits will be felt in full with the arrival of the second half, but already now apply to both small businesses large. On the contrary, according to the authors, the impact of the new treatment of losses is reduced. The recent tax reform brings benefits especially for industrial and medium-large size, the business groups and the North Italy. The percentage of beneficiaries increases with company size making assume that for the larger reality is easier to take advantage of the opportunities of tax rebates related to the accumulation of capital or recruitment. In general, Caiumi and Di Biagio observe that “the tax burden remains high in business and small business size”, while it is lower for the realities belonging to groups.

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