Novelties in the “Simplification Decree” (Decree Law 73 of June 21, 2022)
The Simplifications Decree (Decree Law No. 73 of June 21, 2022) on “Urgent measures on tax simplification and labor clearance, State Treasury and further financial and social provisions” has been published in the Official Gazette.
The Simplification Decree came into force on June 22, 2022, the day after its publication, and must be converted into law by August 20; therefore, its provisions are subject to amendments and additions.
The main changes are analyzed below.
Accounting “enhanced derivation” principle – Extension to microenterprises and accounting for accounting errors
Article 8 of the Simplification Decree amends Article 83 co. 1 of Presidential Decree 917/1986 (hereinafter also “TUIR”), establishing that entities that qualify as microenterprises, in that they do not exceed the size limits set forth in Article 2435-ter of the Civil Code and who choose to prepare their financial statements in the ordinary form, determine business income by applying the principle of enhanced derivation, as a result of which “the criteria of qualification, time allocation and classification in the financial statements provided by the respective accounting standards apply …,” with the consequent tax recognition of the accounting representation based on the principle of substance over form.
Article 83 of the TUIR is also amended with reference to financial statement items related to the correction of accounting errors, which become relevant in the period in which they are charged to the financial statements. In essence, it is stipulated that the time allocation criteria provided by the accounting standards “also apply for tax purposes in relation to the items accounted for as a result of the process of correcting accounting errors.” Based on the above, the principle of enhanced derivation would seem to allow for the tax transposition of the accounting approach, recognizing the accrual and tax relevance of income items charged to the financial statements in the period in which the correction is made and, thus, avoiding the filing of supplementary returns.
By express regulatory provision, the amendments under consideration apply from the tax period in progress on the effective date of the Decree and, therefore, for individuals with a tax period coinciding with the calendar year, as early as 2022.
Repeal of the discipline of systematic loss-making companies as of 2022
Article 9 of the Simplification Decree is related to the cancellation of the discipline of systematic loss-making companies as of the tax period in progress as of December 31, 2022.
As a result of these provisions, the penalties provided for in Article 30 of Law 724/94 would not apply for the 2022 “solar” tax period where, by way of example, the 2017, 2018, 2019, 2020 and 2021 tax periods result in tax losses.
Notwithstanding the application of the rules for the 2021 tax period (REDDITI 2022 forms), even a loss-making return or one with income below the minimum for 2021, falling within the five-year observation period for 2022, would therefore be irrelevant in terms of any penalties.
Nothing is provided, however, regarding the rules on nonoperating companies under Article 30 of Law 724/94, which continue to apply.
Extension of self-declaration State Aid.
Article 35 of the Simplification Decree extends the deadline for registering Covid-19 state aid in the National Register of State Aid (RNA).
As a result of this provision, the Internal Revenue Service, in Order Prot. No. 233822/2022, published on June 22, postponed the deadline for submitting the State Aid Self-Declaration to Nov. 30, 2022 (instead of the previously set deadline of June 30, 2022).
News on cross border transactions communication
The decree changes the objective scope of the reporting of cross-border transactions under Article 1 co. 3-bis of Legislative Decree 127/2015.
Thus, in addition to transactions documented by a customs bill or electronic invoice via Sistema di Interscambio (SdI), also those related to purchases of goods and services that are not territorially relevant for VAT purposes in Italy pursuant to Articles 7 – 7-octies of Presidential Decree 633/72 are excluded from the reporting obligation, if the amount does not exceed 5,000 euros for each individual transaction.
It should be noted, however, that as of July 1, 2022, due to the changes already introduced by Law 178/2020, the communication will have to be made exclusively by transmitting the data in the electronic invoice format via SdI.
Extension of reverse charge for transactions in the electronics and energy sector
For certain transactions in the electronics and energy sector, Article 22 of the Simplification Decree establishes the adoption of the reverse charge for certain transactions until December 31, 2026, as allowed by Directive 2022/890/EU, thus extending the deadline set by L.178/2020 of June 30, 2022.
In detail, the reverse charge mechanism will continue to apply for:
- the supplies of cell phones;
- the supplies of game consoles, tablet PCs and laptops, as well as supplies of integrated circuit devices, such as microprocessors and central processing units, made before their installation in products intended for the final consumer;
- transfers of greenhouse gas emission allowances as defined in Article 3 of Directive 2003/87/EC;
- transfers of other units that may be used by operators to comply with the aforementioned Directive and of gas and electricity certificates;
- transfers of gas and electricity to a taxable dealer.
Credit for R&D and technological innovation activities: certification on qualification of activities
Article 23 of the Simplification Decree introduces the option for companies to request a special certification attesting to the qualification of investments made or to be made to correctly classify them under research and development, technological innovation and design and aesthetic innovation activities eligible for the benefit, as per Art. 1 co. 200, 201, and 202 of Law No. 160 of Dec. 27, 2019.
Similar certification may also be required to certify the qualification of technological innovation activities aimed at achieving Digital Innovation 4.0 and green transition objectives.
A Decree of the President of the Council of Ministers to be issued soon will identify the requirements of the public or private entities qualified to issue the certification, which will have to adhere, in their evaluation process, to the provisions of special guidelines established by the Ministry of Economic Development, periodically drawn up and updated.
Without prejudice to the control activities provided for in co. 207 of Art. 1 of Law 160/2019, the certification shall exert binding effects on the Tax Administration, except in the case where, based on an incorrect representation of the facts, the certification is issued for an activity other than the one carried out.
Changes to tax deadlines
Lastly, the main changes to the tax deadline calendar:
- the Periodic VAT Settlement for the second quarter must be submitted by September 30 (and no longer by September 16);
- the new deadline for Intrastat forms is set by the month following the reporting period (and no longer by the 25th of the following month);
- the limit beyond which stamp duty on electronic invoices for the first two quarters of the year must be paid on time is increased from 250 euros to 5,000 euros as of 2023;
- the June 30 deadline for submitting the tourist tax declaration for tax years 2020 and 2021 is postponed to September 30, 2022;
- the deadline for submitting the IMU declaration for the tax year 2021 is postponed to December 31, 2022 (instead of June 30);
- by amending Articles 13 and 19 of Presidential Decree 131/86, the ordinary deadline for registration “in fixed-term” of all deeds formed in Italy is extended to 30 days.
LDP remains at your disposal for any further clarifications,