NEWSLETTER TAX APRIL 2020

by LDP | Apr 10, 2020 | newsletter

After the “Cura Italia” Decree-Law of 17th March 2020 (currently under conversion in law), the Council of Ministers approved a new Decree-Law published in the Official Gazette on 8th April 2020 (hereinafter, only the “Decree“) containing urgent measures concerning access to credit and tax benefits for firms, special powers in strategic sectors, as well as actions in the health and work field and the extension of administrative and procedural terms.

Find below a summarise of the most significant measures:

 

TAX MEASURES IN SUPPORT OF FIRMS

 

Suspension of tax and social security contributions for subjects with revenues and incomes not exceeding 50 million Euros

Stakeholders

All subjects engaged in business, art or profession which:

  1. have their tax domicile, registered office or operational headquarter in Italy;
  2. received revenues or remunerations not exceeding 50 million euros in the previous tax period (the one in progress on the date of entry into force of the Decree);
  • suffered a decrease in turnover or incomes of at least 33% in March 2020 compared to the same month of the previous tax period and in April 2020 compared to the same month of the previous tax period.

Suspended payments and suspension period

Self-liquidation payments due in April 2020 and May 2020 , relating to:

  • withholding taxes pursuant to Articles 23 and 24 of Presidential Decree (DPR) no. 600/1973, and deductions relating to the regional and municipal surtax, for which the aforementioned subjects act as withholding agents (withholding taxes paid with tax code 1040 are not suspended automatically, but upon request of the beneficiary who receives the payment; see in this regard the paragraph” Option for the non-subjection of compensations to withholding taxes“);
  • social security and welfare contributions, as well as compulsory insurance premiums;
  • the VAT due in April and

Payments deadlines

Suspended payments must be made, without the application of penalties and interest:

  • in a single instalment by 30 June 2020, or
  • in equal monthly instalments up to a maximum of 5, starting from June 2020.

There is no refund for what has already been paid.

 


Suspension of tax and social security contributions for subjects with revenues and incomes exceeding 50 million Euros

Stakeholders

All subjects engaged in business, art or profession which:

  1. have their tax domicile, registered office or operational headquarter in Italy;
  2. received revenues or remunerations exceeding 50 million Euros in the previous tax period (the one in progress on the date of entry into force of this Decree-Law);
  • suffered a decrease in turnover or incomes of at least 50 % in March 2020 compared to the same month of the previous tax period and in April 2020 compared to the same month of the previous tax period.

Suspended payments and suspension period

Self-liquidation payments due in April 2020 and May 2020, relating to:

  • withholding taxes pursuant to Articles 23 and 24 of Presidential Decree (DPR) no. 600/1973, and deductions relating to the regional and municipal surtax, for which the aforementioned subjects act as withholding agents (withholding taxes paid with tax code 1040 are not suspended automatically, but upon request of the beneficiary who receives the payment; see in this regard the paragraph” Option for the non-subjection of compensations to withholding taxes “);
  • social security and welfare contributions, as well as compulsory insurance premiums;
  • the VAT due in April and

Payment deadlines

Suspended payments must be made, without the application of penalties and interest:

  • in a single instalment by 30 June 2020, or
  • in equal monthly instalments up to a maximum of 5, starting from June 2020.

There is no refund for what has been already paid.

 


NOTES:

    1. The suspension of the above mentioned payments operates automatically ( i.e. without the need for comparison with the revenues or the turnover of the months of the previous year) for subjects carrying on business, art or profession, who have their tax domicile, registered office or operational headquarter in Italy and which undertook their activity after 31st March 2019.
    2. For tourist accommodation companies, travel and tourism agencies and tour operators as well as for operators in all the specific sectors indicated in Article 61, paragraphs 1 and 2[1], of the Decree-Law n. 18 of 17th March 2020 payments due in April 2020 remain unconditionally suspended. Therefore, payments due in April are suspended regardless of any fall in revenues/turnover compared to the same month of the previous year. For the suspension of payments due in May, however, they must refer to the requirements described in the paragraphs above.
    3. For national sports federations, sports promotion bodies, professional and amateur associations and sports clubs, as well as subjects that manage stadiums, sports facilities, gyms, clubs and dance facilities, fitness and bodybuilding, sports centers, swimming pools and swimming centers,  payments due in April and May 2020  are unconditionally suspended. Therefore, payments due during these months are suspended regardless of any fall in revenues/turnover compared to the same month of the previous year.
    4. For subjects carrying out business activities, art or profession, who have their tax domicile, registered office or headquarter in the provinces of Bergamo, Brescia, Cremona, Lodi and Piacenza, the suspension of VAT payments due in April and May 2020 is subject to the condition of a decrease in revenues or incomes of at least 33%, regardless of the amount of revenues or incomes archived.
    5. For non-commercial entities, including third sector entities and civilly recognized religious entities, which carry out institutional activities of general interest outside the business regime, payments are suspended for the months of April and May 2020 in relation to:
    • withholding taxes referred to in Articles 23 and 24 of Presidential Decree (DPR) no. 600/1973, and deductions relating to the regional and municipal surtax, for which the aforementioned subjects operate as withholding agents;
    • social security and welfare contributions, as well as compulsory insurance premiums.

 


Option for the non-applications of compensations to withholding tax

Stakeholders

Self-employed workers, agents, brokers, sales representatives , and, generally, recipients of payments subject to withholding taxes referred to in Articles 25 and 25-bis of Presidential Decree (DPR) no. 600/1973 , which:

  1. have achieved revenues or incomes not exceeding € 400,000 in the 2019 tax period;
  2. have not incurred expenses for employees or similar services in the previous month.

Suspension of withholding taxes

These subjects can ask their counterparties, who act as withholding agents, not to subject the compensations paid in the period between 17.03.2020 and 31.05.2020 to withholding tax but to make the payment gross of withholding tax .

Further condition

In order to gain access to this option, the interested party shall issue a special declaration to the debtor showing that the revenues and compensation are not subject to withholding tax (by reason of the provision of the Decree) and will be subject to tax at his own expense, in self-liquidation.

Payments deadlines

Suspended payments must be made, without the application of penalties and interest:

  • in a single instalment by July 31, 2020, or
  • in equal monthly instalments up to a maximum of 5, starting from July 31st .

There is no refund for what has already been paid.

*ONLUS registered in the appropriate registers, voluntary organizations registered in the regional and autonomous province registers, and social promotion associations registered in the national, regional and autonomous province registers of Trento and Bolzano, which carry out, exclusively or principally, one or more activities of general interest provided for by Article 5, paragraph 1 of Legislative Decree no. 117/2017.

 


Sanctions and interests for incorrect application of the forecast method for the calculation of payment on account

Stakeholders

Subjects due to the self-liquidation of advance payments on IRPEF, IRES and IRAP.

Facilitation

In order to make the use of the forecasting method less risky and therefore more accessible in a situation of ongoing reduction in revenues (and therefore of taxable income) the Decree provides that penalties and interest in the event of omitted or insufficient payment of advances on personal income tax, corporate income tax and regional tax on productive activities do not apply if the amount paid is not less than 80% of the amount due as an advace on the basis of the declaration relating to the current tax period.

The provisions referred to in the previous paragraph shall apply only on advance payments due for the tax period following the current one as at 31 December 2019.

 


Terms of delivery and electronic transmission of the Single Certification 2020

Stakeholders

Tax substitutes

Extension of terms

It is postponed from 30 March to 30 April the deadline for the delivery to tax substitutes of the Single Certifications relating to incomes from employment and similar, and incomes from self-employment. Furthermore, penalties for late electronic transmission to the Italian Revenue Agency are not applicable provided that the transmission is done by 30 April.

 


Suspension of the payment of stamp duty on electronic invoices

It is possible to postpone the stamp duty payment on electronic invoices in the following cases:

  • if the tax due for electronic invoices issued in the first quarter of the year is less than 250 euros, the payment can be made within the terms provided for the payment of the tax relating to invoices issued in the second quarter of the year (i.e. within July 20, 2020);
  • if the tax due for electronic invoices issued in the first and second quarter of the year is less than 250 euros, the payment can be made within the terms provided for the payment of the tax relating to invoices issued in the third quarter of the year (i.e. by 20 October 2020).

Such postponement is possible without the payment of penalties or interest.

This provision is not of temporary but systematic. This means that the postponement (under the aforementioned conditions) is not limited to the 2020 tax period.

The ordinary deadlines for the payment of stamp duty due for electronic invoices issued in the third and fourth quarter of the year remain unchanged.

 


Extension of the effectiveness of tax regularity certificates

Stakeholders

Contractors or subcontractors

Effectiveness

Certificates attesting the tax regularity requirements, for the disapplication of the rules provided by Article 17-bis of Legislative Decree no. 241/1997 (rule on withholdings and compensations for contracts and subcontracts), issued by the Italian Revenue Agency within the month of February, will remain valid until June 2020 .

 


Extension of the tax credit for sanitation costs and the purchase of protective devices in the workplace

Stakeholders

Taxpayers carrying out business activities (as well as arts and professions)

Facilitation

The granting of the tax credit is also extended to the expenses for the purchase of personal protective equipment (e.g. masks , gloves, protective visors and goggles, protective suits and footwear), expenses for the purchase and installation of other safety devices designed to protect workers from accidental exposure to biological agents or to guarantee interpersonal safety distances (e.g. barriers and protective panels), as well as expenses for hand cleaners and disinfectants.

The amount of the tax credit is confirmed to the extent of 50% of the expenses incurred up to 31.12.2020 and cannot exceed the maximum amount of 20,000 Euros for each beneficiary.

 


 

Extension of the suspension of terms in civil, criminal, accounting and tax matters

The suspension of hearings in civil, criminal, accounting and tax proceedings ordered to 15 April 2020 is extended until the 11 May 2020 .

Until the same date, the suspension of time limits for the completion of any act of civil, criminal, accounting and tax proceedings is also extended, including the deadline for the notification of the appeal at first instance before the Tax Commissions and the 90 days deadline for the conclusion of the complaint-mediation procedure referred to in Article 17-bis, paragraph 2, of Legislative Decree no. 546/1992, envisaged for disputes of a value not exceeding 50,000 Euros.

The Decree then explicitly specified that the suspension of the terms until 11 May also applies to the litigation activities of the tax authorities , which therefore do not enjoy the longer suspension until 31 May, initially considered applicable in favor of these subjects. The terms of procedural suspension are therefore realigned for both parts of the tax judgment.

 

 

MEASURES TO ACCESS CREDIT, LIQUIDITY, EXPORT, INTERNATIONALIZATION AND INVESTMENTS SUPPORT

 

Sace guarantee to cover bank loans

Access conditions

The measures adopted provide for the issue of guarantees by SACE S.p.A., the Cassa Depositi e Prestiti group, for a maximum of € 200 billion in favor of banks providing loans to enterprises.

For small and medium-sized enterprises, including individual enterprises or VAT numbers holders, access to the guarantee issued by SACE will be subject to the condition of having exhausted the credit issued by the Central Guarantee Fund.

The amount of the guarantee cannot exceed the greater of 25% of the turnover recorded in 2019 or double the cost of personnel incurred by the company.

The guarantee is subject to a series of conditions including the inability to distribute dividends by the beneficiary company (and the other companies of the same group based in Italy) and the repurchase of shares for 12 months during 2020, as well as the necessary allocation of the loan to support expenses for production activities located in Italy.

Stakeholders

  1. enterprises with a turnover value of less than € 1.5 billion and with less than 5000 employees in Italy, including self-employed workers and freelancers holders of VAT number;
  2. enterprises with a turnover value between € 1.5 billion and € 5 billion or with more than 5000 employees in Italy;
  3. enterprises with a turnover value of over 5 billion.

 

Warranty coverage rates

The guarantee will cover between 70% and 90% of the amount financed, depending on the size of the enterprise. Particularly:

  • 90% of the amount of financing requested for enterprises with less than 5,000 employees in Italy and a turnover of less than 1.5 billion euros;
  • 80% for enterprises with over 5,000 employees and a turnover between 1.5 and 5 billion euros;
  • 70% for enterprises with turnover over 5 billion.

 


Guarantee Fund for SMEs, extended to MID Cap

Access conditions

The Decree further enhances the Guarantee Fund for SMEs, increasing both its financial endowment and the ability to generate liquidity also for enterprises up to 499 employees and professionals.

Until December 31, 2020, the guarantee of the Fund is granted:

  • free of charge;
  • up to a maximum guaranteed amount of 5 million;
  • to enterprises with no more than 499 employees, thus extending the Fund to MID Cap .

In addition, the bureaucratic procedures for accessing the guarantees granted by the Fund will be streamlined.

Stakeholders

  1. SMEs and individuals engaged in business, arts or professions;
  2. enterprises with up to 499 employees, with a turnover of up to € 3.2 million;
  3. enterprises with up to 499 employees.

The guarantee, under certain conditions, is also granted in favor of final beneficiaries who:

  • present, on the date of the guarantee request, exposures to the lender classified as “probable defaults” or “past due or impaired” pursuant to paragraph 2, Part B of Circular no. 272 of 30 July 2008 of the Bank of Italy, provided that the aforementioned classification is not earlier than 31 January 2020;
  • following December 31, 2019, have been admitted to the composition with creditors procedure under the Bankruptcy Law, entered into restructuring agreements pursuant to Article 182-bis or have submttted a certified plan pursuant to Article 67 of the aforementioned Law.

Pecentages of warranty coverage 

    • 100% – without evaluation by the Fund – for new loans of up to € 25,000 granted to SMEs and individuals engaged in business, arts or professions. A cap will be applied to the interest rate, as it cannot be higher than the Rendistato index with a residual duration of 4 years and 7 months to 6 years and 6 months, increased by the difference between the 5-year CDS banks and the 5-year ITA CDS, increased by 0.20 % ;
    • 80% coverage for loans against debt rescheduling operations of the beneficiary entity, provided that the new loan provides the beneficiary entity with additional credit in an amount equal to at least 10% of the outstanding amount of the loan subject to rescheduling;
    • 90% for all other operations[2], without using the Fund’s valuation model. For enterprises with a turnover of up to 3.2 million and up to 25% of the turnover, for new loans it is possible to reach 100% with the Confidi coverage.

 

The Fund – already expanded by the “Cura Italia” Decree (Decree-Law 17th March 2020, n. 18) with 1.5 billion Euros – thus completes its transformation into an instrument to support small and medium-sized enterprises, to protect entrepreneurs, craftsmen, self-employed and professionals.

 


Measures to support exports and business investment

The Decree also enhances public export support, in order to improve the incisiveness and timeliness of State intervention. The intervention introduces a co-insurance system according to which the commitments deriving from SACE’s insurance business, for risks defined as non-market risks pursuant to European Union legislation, are assumed by the State for 90% and by the company itself for the remaining 10%, thus freeing up to an additional 200 billion resources to be allocated to the enhancement of exports.

 

TEMPORARY PROVISIONS ON CAPITAL REDUCTION

 

Up to 31 December 2020, for cases that occurred during the financial years closed by the aforementioned date, Articles 2446, second and third paragraphs, 2447, 2482-bis, fourth, fifth and sixth paragraphs, and 2482-ter of the Italian Civil Code shall not apply and the company shall not be dissolved due to reduction or loss of the share capital referred to in Articles 2484, first paragraph, number 4), and 2545-duodecies of the Italian Civil Code.

Therefore:

  1. In the event of a share capital reduction for the losses that occurred during the year ended at December 31, 2020, the capital reduction obligations for losses below the legal limit (with contextual obligation to increase share capital) provided for by Articles 2446, paragraph 2 and 3, 2447, 2482-bis, paragraph  4 and 5, 2482-ter of the Italian Civil Code, and the cause of dissolution of companies due to reduction or loss of share capital referred to in Articles 2484, paragraph no. 1 no. 4, and 2545-duodecies of the Italian Civil Code, do not operate;
  2. in preparation of the financial statements for the year ended at 31 December 2020, the assessment of items on going concern, pursuant to Article 2423-bis paragraph  1 of the Italian Civil Code, may however be operated if it exists in the last financial statements closed before February 23, 2020;
  3. from the date of entry into force of the provision and until December 31, 2020, the mechanism of postponing the reimbursement of the shareholders’ loan with respect to the satisfaction of the other creditors, provided for in Articles 2467 and 2497-quinquies of the Italian Civil Code, does not operate.

 

 

LDP remains at your complete disposal for any further information and necessary actions. 


[1] Suspension of withholding tax payments, social security contributions and insurance premiums for specific sectors:

  • entities that operate theatres, concert halls, cinemas, including ticketing services and support activities for artistic performances, as well as discos, dance halls, nightclubs, amusement arcades and billiards;
  • entities that operate lottery receivers, lotteries, betting, including the management of related machines and equipment;
  • entities that organize courses, fairs and events, including those of an artistic, cultural, recreational, sporting and religious nature;
  • entities that manage catering, ice cream parlours, pastry shops, bars and pubs;
  • entities that manage museums, libraries, archives, historical places and monuments, as well as botanical gardens, zoos and natural reserves;
  • entities that manage crèches and day care services for disabled children, educational services and nursery schools, first and second level educational services, professional training courses, sailing and flying schools, which issue patents or commercial licences, professional driving schools for drivers;
  • entities that carry out residential social work for the elderly and disabled;
  • entities that carry out non-residential social assistance activities for the elderly and disabled;
  • spas as per Law no. 323 of 24 October 2000 and wellness centres;
  • entities who run amusement parks or theme parks;
  • entities operating bus, railway, metro, maritime or airport stations;
  • entities operating freight and passenger transport services by land, air, sea, river, lake and lagoon, including the operation of funiculars, cable cars, gondolas, chairlifts and ski lifts;
  • entities that operate land, sea, inland, inland waterway, lake and lagoon chartering services;
  • entities that manage rental services of sports and recreational equipment or facilities and equipment for events and shows;
  • entities that carry out driving and tourist assistance activities;

 

[2] The total amount of the aforementioned financial transactions cannot alternatively exceed: 1) double the beneficiary’s annual salary expenditure (including social security contributions and the cost of staff working on the company’s site but formally included in the book subcontractors’ pay) for 2019 or the last year available. In case of companies set up from 1 January 2019, the maximum loan amount cannot exceed the annual wage costs expected for the first two years of activity; 2) 25% of the beneficiary’s total turnover in 2019; 3) the requirement for working capital costs and investment costs in the following 18 months, in case of small and medium-sized enterprises, and in the following 12 months, in case of enterprises with a number of employees not exceeding 499. In the event that these limits are exceeded, the coverage percentage of the direct guarantee falls to 80%.

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