Article 33 of Law No. 78 of 31 May 2010 introduces an additional 10 per cent tax on variable compensation for executives (dirigenti) and directors (amministratori) of financial institutions. Variable compensation includes cash bonuses and stock option grants.

The measure applies in the following circumstances:

  • the employer is a company engaged in the financial sector;
  • the employee qualifies as executive (dirigente) or director (amministratore); or
  • the bonus and/or stock option compensation exceeds three times the ‘fixed’ compensation.  

If all the above conditions apply, there is a surcharge to personal income tax (IRPEF) at the 10 per cent levied by the employer.