The 2024 income meter is a tax control tool used by the Revenue Agency to indirectly determine the total income of individuals, comparing the declared income with their actual lifestyle and spending capacity. With the approval of the Decree of 7 May 2024, published in the Official Gazette, new criteria are introduced for the summary assessment of income, but the decree was temporarily suspended by Prime Minister Giorgia
Meloni for further study.
Table of Contents:
What is the 2024 income meter
The 2024 income meter allows the Revenue Agency to estimate the total income of individuals based on their spending capacity, comparing the declared income with the expenses actually incurred. This tool aims to identify significant discrepancies between reported income and the taxpayer’s standard of living
.
When does the income meter check go off
The income meter check is triggered when the income declared by the taxpayer is lower than the expenses incurred, highlighting a significant discrepancy. The check is activated if the difference between the declared income and the expenses incurred exceeds 20%. The income meter applies to individuals and not to companies, and examines the expenses incurred from 2016 onwards
.
Income meter suspended in 2024
The Decree of 7 May 2024, which reintroduced the income meter, was suspended on 22 May 2024 by Prime Minister Giorgia Meloni, who defined the measure as a ‘fiscal big brother’. The suspension was made official by Deputy Minister Maurizio Leo on 23 May 2024. The suspension does not imply the definitive cancellation of the income meter, which could come into force from 2025 with
possible changes.
How does the income meter work
The income meter estimates the taxpayer’s income based on simplified indicators and parameters. The Revenue Agency can carry out the summary assessment of income starting from the “synthetic” determination of the highest incomes relating to tax years starting from 2016. The taxpayer has the opportunity to prove that the expenses were financed with income other than those declared during the tax period, that the expenses attributed have a different amount, or that the share of savings used was formed
in previous years.
Income meter 2024: counted expenses
The Revenue Agency, to determine the taxpayer’s total income, considers:
- expenses incurred, even other than those indicated in Table A of the decree
- expenses for goods available to the taxpayer, applying a presumed minimum expense
- a share of essential expenses for a minimally acceptable standard of living
- capital increases attributable to the tax period
- a share of savings not used for consumption, investments or other expenses
The following are not considered:
- expenses related exclusively to business activity or to the exercise of arts and professions, if documented
- Current income but savings accumulated over a lifetime
Income meter: practical example of expenses
The Revenue Agency can use many entries to verify taxpayers’ presumed income. Some examples include:
- Expenses for food and luxury clothing
- mortgage and rent, water and condominium expenses, maintenance and real estate agents
- investments in stocks, stamps and gold
- energy, home and health expenses, including central heating
- furniture, appliances and household services
- domestic helpers and other services
- civil liability, fire and theft insurance for vehicles, and payment of the stamp
- mobile phone and education expenses
- leisure costs, cars and horses
Who risks with the income meter
The income meter affects those taxpayers who have significant deviations between their lifestyle and their reported income. The significant variances are those greater than 20%. Differences below this threshold will not be taken into account.
When does the 2024 income meter start
The synthetic findings were due to start in 2024, but with the suspension of the Decree by Prime Minister Giorgia Meloni, the dates may change. The Decree indicated that the control applied to income from tax years starting in 2016. The changes and new dates will be defined by the government.
The 2024 income meter represents a tax control tool that aims to combat tax evasion by verifying the correspondence between declared income and spending capacity. It’s important for taxpayers to be aware of the new rules and deadlines to avoid penalties. For more details, we recommend that you consult official communications and contact a tax advisor
.
Insights and updates
To stay updated on tax news and receive more information, you can consult the guides to the 2024 tax reform and the 2024 personal income tax reform, in addition to the resources available on tax bonuses and benefits for workers and families.
