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IRES tax relief: characteristics and beneficiaries of the relief

published on 19 September 2025 | reading time approx. 4 minutes

The Ministerial Decree of August 8, 2025 defined the implementing provisions of the so-called IRES incentive, which consists of a reduction, for 2025 only, in the IRES rate for companies that make substantial investments.

The IRES incentive, defined by Article 1, paragraphs 436-444, of Law 207/2024 and implemented by Ministerial Decree of August 8, 2025, consists of a four-point reduction in the IRES rate, from 24 per cent to 20 per cent, applicable to corporate income declared for the 2025 financial year, subject to specific conditions of access.

The first condition for qualifying for the relief in question concerns the allocation of profits for the financial year ending December 31, 2024; specifically, at least 80 per cent of the profits made in the 2024 financial year must be set aside in a special reserve. In this regard, it has been clarified that:

All profits allocated for purposes other than distribution at the time of approval of the financial statements, including the coverage of losses, are considered “set aside”;
Advance payments on dividends pursuant to Article 2433-bis of the Italian Civil Code are treated as distributions;
In the absence of profits in 2024, the benefit is not applicable.

As a second condition, in order to benefit from the 20 per cent IRES rate, significant investments must be made between January 1, 2025, and the deadline for filing the tax return for the period following that in progress on December 31, 2024 (for entities with a calendar year end, October 31, 2026). More specifically, investments must relate to the purchase, including through leasing, of:

Tangible and intangible assets 4.0, as indicated in Annexes A and B to Law 232/2016;
Assets covered by the transition investment bonus 5.0 referred to in Article 38 of Decree Law 19/2024 with reduction in energy consumption.

Furthermore, the aforementioned assets must be interconnected and meet the requirements of novelty, instrumentality, and intended use in production facilities located within the territory of the State. The minimum amount to be allocated to such investments is equal to the greater of:

30 per cent of the 2024 profit set aside;
24 per cent of the 2023 profit;
euro 20.000.

The benchmark of 2023 profits for defining the minimum investment amount is only a parameter for defining an additional minimum value for eligible investments, with the result that profits made in that financial year can be considered for the purposes of the subsidy in question, even if they have already been distributed. Therefore, access to the benefit is not conditional upon the realization of a profit in the financial year ending December 31, 2023.

An additional requirement for access to the IRES bonus is linked to employment levels. In fact, it is required that in the tax period following that in progress on December 31, 2024:

The number of annual labor units (ULA”) has not decreased compared to the average of the previous three years;
New employees are hired on permanent contracts, constituting an increase in employment pursuant to Article 4 of Legislative Decree 216/2023, equal to at least 1 per cent of the average number of permanent employees employed during the tax period ending December 31, 2024, and, in any case, by no less than one employee with a permanent employment contract.

In addition, potential beneficiaries of the IRES bonus must not have resorted, in the financial year ending December 31, 2024, or in the following financial year, to the wage supplementation fund, with the exception of ordinary wage supplementation paid in the cases referred to in Article 11, paragraph 1, letter a) of Legislative Decree No. 148 of September 14, 2015.

Once the above conditions have been met, care must be taken to avoid circumstances that would result in the loss of the benefit and its subsequent recovery. Such circumstances occur when:

The accrued profit share for 2024 be distributed within the second financial year following the current one ending on December 31, 2024;
The assets subject to investment are disposed of, sold to third parties, used for purposes unrelated to the business, or permanently transferred to production facilities located abroad within the 5th tax period following that in which the investment was made.

Finally, Article 12 of Ministerial Decree 8.8.2025 provides for the accumulation of the IRES bonus with other concessions relating to the same costs, such as:

the tax credit for investments 4.0 pursuant to Law 178/2020;
the transition credit 5.0 referred to in Article 38 of Decree Law 19/2024.

In this regard, it is stipulated that, without precluding the possibility of combining this benefit with other benefits relating to the same eligible costs, the lower tax due as a result of the reduction in the IRES rate shall be payable within the limits of the cost incurred by the company for the relevant investments.

In any case, the rules on cumulation provided for specific tax credits remain in force, as indicated, respectively, in Article 1, paragraph 1059 of Law 178/2020 and Article 38, paragraph 18 of Decree Law 19/2024, which also require taking into account the “non-contribution to the formation of income and the taxable base of the regional tax on productive activities” of the measures in question.