The tax benefits or tax aids are all those rules provided for by tax law that reduce taxes and fees with respect to what is provided for by the ordinary reference rule.
Tax benefits can take various forms, for example:
- tax exemptions for particular categories of subjects and situations, explicitly identified by the tax legislation, think of the case of VAT exemptions;
- tax deductions, or reductions of the tax base on which to calculate taxes;
- tax deductions, or reductions of the tax to be paid upon the occurrence of certain circumstances;
- reductions of rates of taxes;
- tax credits;
- advantageous tax regimes, think of the case of VAT numbers with the minimum regime and the flat-rate regime.
The subjective tax breaks are those granted by the tax authorities to certain categories of taxpayers. Consider the case of the IMU exemption for state-owned properties.
The objective tax breaks, on the other hand, are those granted by the tax authorities upon the occurrence of certain factual situations. Think, in this regard, of the tax exemptions that are granted to properties classified in certain cadastral categories.
In common parlance, the terms tax breaks and tax aid are often used interchangeably.
However, from a technical point of view it is necessary to distinguish tax concessions from tax aid.
This is because when we speak of tax aid in Italian tax law we refer to the scope of application of the benefits or subsidies provided for by Community legislation (see, in particular, Article 107 of the TFEU).
Tax benefits can be objective or subjective.
