Tax incentives for hiring young unemployed
A circular released by the Finance Ministry, which activates a recent legal clause concerning incentives for enterprises that hire young or long-term unemployed people, offers tax incentives to employers who hire unemployed workers on top of their existing staff up until 2023.
The circular provides for the new jobs created to bring an increase in employers’ social security contributions by 50 percent. Those additional contributions will then be exempt from the corporations’ annual taxable income, up to the amount of 8,200 euros. That figure is based on the minimum monthly wage of 586 euros.
The provision was originally included in a law dating from 2013, but last summer’s intervention provided for an extension in its application to 2023. The tax incentive will therefore apply not only to the year of the hiring but also to the next four years, provided that the number of people employed and the salary expenditure each year do not show any reduction year-on-year.
Enterprises must attach to their income tax declarations a statement with the number of their employees and the sum of their salary costs. The circular made it clear that in case any of the conditions required is not fulfilled, the incentive will not apply for the present and the following years.