On 28 October 2026 Italy's Council of Ministers approved the draft Budget Law for 2027. Its parliamentary passage offers a useful opportunity to review potential implications for businesses while separating announced measures from current law.
All measures discussed are proposals subject to parliamentary change. Announcements alone do not bring tax measures into force.
What was approved on 28 October
Italy's Council of Ministers approved the draft 2027–2029 Budget Law, with a package announced at approximately €26 billion for 2027. This is a draft bill, not enacted legislation. Parliament may amend the provisions before final approval.
Personal income tax and the flat-rate regime
The announced measures would extend the 33% personal income tax band to income up to €55,000. The flat-rate regime's revenue threshold for income-tax purposes would rise from €85,000 to €100,000. The VAT exemption threshold would remain €85,000 pending EU authorisation. The interaction between income tax and VAT needs careful review.
Hiring incentives and employment costs
The draft includes an announced extension to 31 December 2027 of selected contribution relief for permanent hires of women, young workers and workers in Special Economic Zones. Enhanced tax deductions for qualifying new hires are also proposed. These are different forms of relief and their actual value depends on eligibility and the company's tax position.
Business investment planning
The package also highlights competitiveness and investment, with particular attention to Southern Italy. Companies considering new technology or productive investment should prepare their financial plans but must not assume that an announced incentive is already available.
Company-owned property: proposals are not rules
A possible future return of favourable tax treatment for property transfers or assignments to shareholders would be of interest to property-owning companies. However, the information verified so far does not establish such relief as a confirmed and defined provision of the draft. Asset reviews can proceed without committing to transactions based on an unconfirmed tax benefit.
What businesses can do now
Prepare alternative tax and cash-flow scenarios, review recruitment plans and capital expenditure, and assess any prospective corporate reorganisation. Irreversible decisions should await the enacted text, effective dates and relevant implementation guidance.
FC Consulting & Management's perspective
Any benefit must be assessed in the context of the business rather than assumed from a headline. FC Consulting & Management helps businesses and professionals evaluate tax, corporate and financial options while distinguishing current legislation from proposals.
Sources and legislative status
FC Consulting & Management
Book a consultation ↗Information reviewed on 30 October 2026. General information, not advice on an individual case.