As in the last few preceding years, the 2001 fiscal year will also be the focus of a significant number of new tax provisions which aim at reforming the Italian tax framework. The most meaningful provisions, which have been introduced by Laws No. 342 of November 21, 2000 and No. 388 of December 23, 2000, may be summarized as follows:
I. Employment Income Tax
The combined effect of the above pieces of legislation has altered the income-tax treatment pertaining to employees who are steadily relocated abroad in order to perform a specific assigned task. Their Italian tax liability will be restricted to a conventional salary set forth every year by a ministerial decree. However, workers who are similarly relocated within areas which border Italy will benefit from a total income-tax exemption with respect to their salaries. Employers, who apply the above arrangements for their workers, will no longer benefit from the related tax credit. Finally, certain new relieves have been introduced
