Highlights
Italy’s tax reform continues: the Government has given preliminary approval to a new corrective decree on the testi unici (consolidated tax codes) that will replace the main tax laws, including VAT, income tax and assessment rules, from January 1st, 2027. On the employment side, national rules on the use of artificial intelligence in HR decisions take effect on October 23rd, 2026, while remote shareholders’ meetings are once again governed by each company’s articles of association. The 2027 Budget Bill has not yet been presented: on October 13th, 2026 the Council of Ministers only approved the Draft Budgetary Plan sent to the European Commission.
Contents
Tax
Consolidated tax codes: preliminary approval of a new corrective decree
Under the 2023 tax reform enabling law (Law 111/2023), Italy is rewriting its tax legislation into a set of consolidated codes.
On October 13th, 2026 the Council of Ministers approved, at a preliminary reading, a draft legislative decree that amends all the codes already issued โ penalties, minor taxes, tax litigation, payments and collection, registration tax, VAT, income taxes, filing and assessment.
Most changes are technical, but early commentary points to some substantive ones.
The draft now goes to Parliament for its opinion: it is not yet in force. The codes are set to apply from January 1st, 2027.
What it means for businesses: from 2027 the legal references change; for example, the income tax code (TUIR) and the VAT decree are absorbed into the new codes. Groups should plan to update internal procedures, group policies, contracts and accounting systems, and check the substantive changes once the final text is published.
VAT Consolidated Code from January 1st, 2027: new legal references and software updates
The new Testo unico IVA (VAT Consolidated Code, Legislative Decree 10 of January 19th, 2026) will apply from January 1st, 2027, the date set for all the reform’s consolidated codes.
It does not change how VAT works, but it reorganises and renumbers the rules of DPR 633/1972 (Italy’s VAT law since 1972). For example, exemptions move from Article 10 to Article 37, input VAT deduction from Article 19 to Article 56, and the rules for businesses with multiple activities from Article 36 to Article 63.
The main practical impact is on accounting software: VAT codes, posting templates, register printouts and e-invoice import routines that read legal references in the XML file.
Article 170(3) states that references to repealed rules are read as references to the new code, so, according to software providers, an invoice still quoting the old article should remain valid.
What it means for businesses: check the update timeline with your software provider and list any custom VAT codes, which may not update automatically. Legal references in invoice wording, contracts and group VAT procedures should also be updated, for example the standard exemption wording “art. 10 DPR 633/1972”.
Hyper-depreciation: completion notices to the GSE open from October 15th
Italy’s 2026 Budget Law introduced a new iperammortamento (hyper-depreciation): an increased tax deduction for qualifying investments in digital and green capital goods, managed under the “New Transition 5.0 Plan”. Access requires a series of online filings with the GSE (the state-owned energy services agency). Under a directorial decree of the Ministry of Enterprises (MIMIT) dated October 14th, 2026, the final step โ the completion notice โ opened at noon on October 15th, 2026. It is available to companies whose earlier confirmation notice was approved. The notice must list the invoices and state that the company holds a sworn technical appraisal and an accounting certification of the costs. It cannot cover different assets or higher amounts than those confirmed. According to early commentary, the increased deduction starts only once the asset is in use and interconnected and the completion notice has been filed.
What it means for businesses: for assets completed in 2026, filing promptly may determine the year in which the extra deduction begins. Technical staff, the appraiser and the auditor should be aligned so the documents are ready before filing.
Employment
AI in the workplace: Legislative Decree 179/2026 in force from October 23rd
Legislative Decree 179 of October 7th, 2026, published in the Official Gazette on October 8th, 2026, aligns Italian law with the EU AI Act (Regulation 2024/1689) and takes effect on October 23rd, 2026. For employers, Article 41 provides that decisions on hiring, changes to or termination of employment, disciplinary measures and performance reviews cannot be based solely on automated processing. The final decision must rest with a natural person with real, independent authority; non-compliant decisions are void. Before processing begins, employees must receive the information required by Italian transparency rules (Article 1-bis of Legislative Decree 152/1997). On request, a worker is entitled to a clear explanation of the decision. Article 42 requires AI use to be covered in the DVR (the mandatory workplace risk assessment document), with specific information and training.
What it means for businesses: Italian entities should map the AI tools used in HR, including group-wide platforms rolled out by the parent company, update employee notices and the risk assessment, and document who makes the final decision.
2026 bonus for working mothers: INPS instructions
INPS has issued guidance on the bonus for working mothers introduced by the 2026 Budget Law (Law 199/2025). It is available to employees (excluding domestic workers) and self-employed women with at least two children: with two children, if the youngest is under 10; with three or more, if the youngest is under 18. Employment income must not exceed EUR 40,000. The bonus is EUR 60 per month of work, up to EUR 720, paid as a lump sum in December 2026. It is tax-free and does not count towards ISEE (the means-test indicator for welfare benefits). Mothers of three or more do not receive it for months with a permanent contract, as they benefit instead from an existing exemption from employee pension contributions. Applications go directly to INPS; the opening date will be announced later.
What it means for businesses: no payroll action is needed, as the employee applies directly. HR may wish to inform staff and check consistency with any contribution exemption already applied for mothers of three or more children.
Corporate & Financial Reporting
Remote shareholders’ meetings: ordinary rules apply again from October 1st, 2026
Since 2020, a temporary COVID-era rule (Article 106 of Decree-Law 18/2020) allowed Italian companies to hold shareholders’ meetings by video or audio link even where the articles of association did not provide for it. After several extensions, the last of which by Decree-Law 200/2025, it applied for the last time to meetings held by September 30th, 2026. From October 1st, 2026 the ordinary Civil Code rules and the company’s articles of association apply. In an S.p.A. (joint-stock company), shareholders may attend remotely only if the articles of association allow it. In an S.r.l. (limited liability company), remote attendance is generally accepted unless the articles forbid it, but decisions by written consultation or written consent require an express provision in the articles. Listed companies follow the Consolidated Law on Finance (TUF).
What it means for businesses: Italian subsidiaries whose shareholders and directors are based abroad should review their articles of association now, ahead of the next meetings (starting with the approval of the 2026 financial statements), and amend them if needed to allow remote participation.
For further information or assistance on any of these topics, please contact us at tax@dgtax.it.
This newsletter is for information purposes only and does not constitute professional advice.