Brussels, 09/12/2005 (Agence Europe) - The fiscal incentive measures for enterprises creating jobs in Italy have been authorised by the European Commission, which on Thursday said that the scheme established by decree 80 of 14 March 2005, envisaging tax deductions under the Italian tax on regional productive activities (IRAP), is in accordance with regulation 2204/02 on state aid for employment. “By approving this measure, we have shown once again that state aids can play an active role in supporting job creation whilst avoiding undue distortions of competition”, said Commissioner Neelie Kroes in a press release. The scheme aims to encourage the creation of employment by reducing labour costs through tax deductions afforded under the IRAP, particularly in the regions of southern Italy with a high unemployment rate.
Two areas are targeted. On one hand, the deduction applies to all enterprises established in Italy, irrespective of their size or sector of activity. In this case, a reduction in the tax base of 20 000 euros for each job created as from the date of the Commission decision up to 31 December 2007. On the other hand, enterprises which are active in assisted regions can benefit from bigger deductions, with a ceiling of 100 000 euros per job created in areas eligible under article 87 paragraph 3a and 60 000 euros in those eligible under article 87 paragraph 3c. Only permanent contracts are taken into account in calculations for the deductions, which are estimated at 471 million for the general cases and 846 million for the cases of assisted regions.