The Italian Council of Ministers has released a message announcing the approval of the draft tax reform law at a meeting held on October 5, 2021. While no specific details are provided, the press release highlights the following key areas of reform:
- Personal income tax reform, including the abolition of the dual system that distinguishes between capital income and employment income, with a reduction in the effective tax rates on employment income;
- Corporate Tax Reform (IRES), including simplifying the IRES and reducing liabilities for businesses;
- VAT reform, including streamlining rates and bases to simplify VAT administration and reduce tax evasion and tax cuts;
- Reform of the Regional Industrial Activity Tax (IRAP), including the phasing out of IRAP;
- Replacing regional and municipal taxes while maintaining equivalent revenues for regions and municipalities, which includes, among other things, converting the local (municipal) property tax (IMU) into a fully municipal tax.
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