I-v.3 Reduction in social security contributions in the Mezzogiorno
3.5.3.I-v.3 Reduction in social security contributions in the Mezzogiorno (Sgravi contributivi per il Mezzogiorno)
3.5.3.1. Aim
To promote companies operating in the Mezzogiorno.
3.5.3.2. Legal basis
- Decree-Law 918 of 30.8.1968;
- Law 1089 of 25.10.1968;
- Law 183 of 2.5.1976;
- Presidential Decree 218 of 6.3.1978 (Art. 1 and 59);
- Law 887 of 22.12.1984; Law 64 of 1.3.1986;
- Decree-Law 34 of 20.2.1986;
- Decree-Law 123 of 26.4.1986 and subsequent extensions until Decree-Law 536 of 30.12.1987;
- Decree-Law 14/92;
- Decree-Law 34 of 20.2.1986;
- Decree-Law 123 of 26.4.1986 and subsequent extensions;
- Decree-Law 338/89, converted into Law 389/89;
- Decree-Law 14/92, converted into Law 151 of 20.5.1993;
- Decree-Law 465 of 19.11.1993, converted into Law 21 of 14.1.1994;
- Law 451/94;
- Interministerial Decree of 5.8.1994 (published in Gazzetta ufficiale of 20.8.1994).
3.5.3.3. Contents
This is a temporary measure which is extended as required.
For 1994/95 the reduction in social security contributions according to Presidential Decree 218/78 (Art. 59) on measures in the Mezzogiorno was extended as follows:
- initially for the entire payment period up to 31.5.1993 with a reduction from 8.50% to 7.50% (Art. 1, § 1, Law 151/93);
- subsequently for the entire payment period up to 30.11.1993 with a further reduction from 7.5% to 6.0% (Art. 1, § 1, Law 21/94);
- then once more for the entire payment period up to 30.6.1994 with a further reduction from 6% to 5% (Art. 19, § 1, Law 451/94);
- finally, under the Interministerial Decree of 5.8.1994, the following reductions in the contribu-tions paid by employers to the INPS were enacted for the payment period starting on 1.7.1994:
- 14.6% from 10.7.1994 to 30.11.1994;
- 14% from 1.12.1994 to 30.11.1995;
- 10.6% from 1.12.1995 to 30.11.1996.
This reduction is granted for activities performed in the regions of Campania, Apulia, Basilicata, Calabria, Sicily and Sardinia; it applies only to the remuneration of those employees actually work-ing in these areas. The basis for calculating the reduction is the pay earned by employees (ex-cluding overtime) for which contributions to the general, compulsory disability, old-age and surviving dependants' insurance are to be paid. For the regions of Abruzzi and Molise the reduc-tion amounts to 12% for the payment period 1.7.1994 to 30.11.1994.
In addition a total exemption (in accordance with Article 59 of Presidential Decree 218/78) from all employer contributions to the INPS for the duration of one year as from the date of recruitment of the worker in question is granted:
- for workers recruited between 1.12.1991 and 31.5.1993 by industrial enterprises operating in the sectors earmarked by the CIPE, provided that the recruitments occurring prior to 30.11.1992 serve to increase the size of the work force above that prevailing on 30.11.1991 (Art. 1, § 2, Law 151/93);
- for workers recruited between 1.6.1993 and 30.11.1993 by industrial enterprises operating in the sectors earmarked by the CIPE, provided that the recruitments serve to increase the size of the work force above that prevailing on 30.11.1992 (Art. 1, § 2, Law 21/94);
- for workers recruited between 1.12.1993 and 30.6.1994 by the same enterprises provided that the recruitments serve to increase the size of the work force above that prevailing on 30.11.1993 (Art. 19, § 1, Law 451/94);
- for workers recruited between 10.7.1994 and 30.11.1994, between 1.12.1994 and 30.11.1995 and between 1.12.1995 and 30.11.1996 provided in each case that the recruitments serve to increase the size of the work force above that prevailing on 30 November of the previous year.
3.5.3.4. Financial resources
The financial contributions will be paid by the state budget.
3.5.3.5. Institutional support
The administrative procedures are carried out by the companies through INPS.
3.5.3.6. Duration
As mentioned above, the measure is a temporary one that is extended on a case-by-case basis
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