Personal allowances

A basic allowance of 3,000 has been introduced; this is sometimes referred to as the 'Berlusconi allowance'.

If the taxpayer earns employment income, he/she is entitled to an additional allowance of 4,500.

Alternatively, if the taxpayer receives pension income, the additional allowance is 4,000. If the taxpayer earns self-employment income or income from a “small enterprise”, the additional allowance is reduced to 1,500.

A formula is provided so that the basic deduction decreases as the total taxable income increases.