COVID-19 : Extraordinary Tax Measures in Italy

By Gaetano Salvioli, Giuliana Polacco, Annarita De Carne

03-2020

The health emergency declared in Italy following the spread of coronavirus (COVID-19) raises a number of issues on the tax side. In particular, taking into account the economic crisis that is connected with the strict measures enacted and the travel obstructions, the Government has had to enact special rules regarding deadlines for the fulfilment of formalities, including payment of taxes and procedural aspects (Decree of Minister of Economy and Finance dates February 24, 2020; Law Decree March 2, 2020, n. 9 and Law Decree no. 11, dated 8 March 2020).

The extraordinary legislation enacted by the Government has only partially taken into account the needs of taxpayers given the necessary pressures to manage the emergency quickly. As a result, additional clarifications or change of the legislation is expected. Regular updates will be provided.

Payment of taxes and related formalities

A suspension for payments of all taxes (VAT, income tax, etc.) and withholding taxes has been granted from 21 February to 31 March, only to the municipalities that are included in the so called "Red Zone", including those deriving from the Notice of Payment and Tax Assessments. The Red Zone was initially limited to certain municipalities in the North of Italy, but will probably be extended to all Italian territory due to the recent decision to extend the Red Zone to the whole of Italy, as enacted on 9 March. 

A suspension of the payments of social security contributions is granted to enterprises and professionals included in the Red Zone for deadlines falling between 23 February and 30 April 2020, to all enterprises without computing penalties and interest.
Enterprises acting as withholding agents have time until 31 March 2020 to provide employees and suppliers with the certifications regarding to the application of withholding tax.

Tax Disputes

Civil and criminal proceedings are suspended by operation of law in case the hearing was scheduled in the period ranging from 9 March to 22 March. Such suspension involves all the related activities and fulfillments, i.e. communication, notification and any other additional activities connected with the proceeding, whose deadline would fall within the same period. Exceptions to the suspension are duly indicated. The application of the same provision is extended to the tax proceedings.

The extension of the suspension to tax proceeding is clearly referred to the proceedings whose hearings are scheduled in the period above indicated, i.e. 9 March to 22 March, and related activities (e.g. filing of briefs).

However, no indications have been provided with respect to different procedural deadlines, such as that for appealing decisions or filing of the appeal with the competent tax courts.

In addition, no clarification has been given on pre-litigation proceedings (e.g. settlement procedure), i.e. whether the deadline for appealing a tax assessment has been suspended in case the settlement is not reached. Therefore, the recommendation would be to observe the relevant deadline without taking advantage of the suspension. Whilst waiting for additional guidelines, caution is recommendable in managing the deadline in pre-litigation and the litigation process in this period.

Relationships with Tax Offices

Irrespective of all the restrictions provided by the current legislation, relationships with Tax Offices and Tax Courts are still in place and smart working is adopted. Therefore, the current activity has no disruption and the cases are dealt with by the same Tax Officers through online methods and over the phone.

Last reviewed 10 March 2020