The health emergency declared in Italy following the spread of coronavirus (COVID-19), and the economic crisis connected with the strict measures enacted and the travel obstructions, has also had important repercussions on tax. The Government enacted extraordinary rules regarding, among others, deadlines for the fulfilment of formalities, including payment of taxes and procedural aspects. Such measures have been included in the Law Decree issued on 17 March 2020, named 'Save Italy – Decree' and summarised below ("Decree").
1 Financial measures to support enterprises
Companies that transfer within 31 December 2020, receivables towards defaulting debtors – which debts are older than 90 days - can convert the deferred tax assets into a tax credit if related to:
- the tax losses carried forward;
- the allowance for corporate equity (ACE) carried forward.
The benefit deriving from the above components cannot exceed 20% of the face value of the receivables transferred. The latter can be considered for a maximum amount of 2 billion euro.
The tax credit can be offset, without any limitation as to the amount, through the F24 Form or transferred or requested for refund.
The tax credit must be reported in the tax return and does not concur to the taxable basis for both corporate income tax and regional tax.
2 Financial measures for small and medium-sized enterprises
Micro, small and medium-sized companies can benefit from the following financial support measures in relation to debt exposures towards banks and financial intermediaries:
- the credit lines granted and the loans granted for credit advances cannot be canceled until 30 September 2020;
- non-installment loans with contractual expiration before 30 September 2020 must be extended until 30 September 2020 under the same conditions;
- for mortgages and other loans with repayment in installments, the payment of installments or leasing installments due before 30 September 2020 is suspended until 30 September 2020, and the repayment plan of the installments is deferred in a manner that ensures the absence of new or greater charges for both parties.
In this regard, the company confirms that it temporarily suffered a shortage of liquidity as a direct consequence of the COVID-19 pandemic.
3 Support to the companies' liquidity through guarantee mechanisms
To support the liquidity of enterprises affected by the epidemiological emergency, forms of public guarantee are provided in order to facilitate the grant of loans to companies that have suffered a reduction in turnover.
4 Suspension of payments of withholdings, social security and welfare contributions and premiums for compulsory insurance
For specific categories of taxpayers - carrying out the activities mainly affected by the emergency (expressly provided by the Decree) – withholding payments, social security and welfare contributions and premiums for compulsory insurance are suspended for the period between 2 March and 30 April 2020. Enterprises which can benefit from the suspension are those in the entertainment, sports and restaurants.
The payments will be due - without the application of penalties and interest - by 31 May 2020 or split in five equal monthly payments starting from the same date.
The above mentioned taxpayers are also given the suspension of VAT payments that should have been due in March.
5 Suspension of tax fulfilments
With the exception of the payments of each type of tax and the withholding taxes also related to the regional and municipal surcharge which are due, for all taxpayers the tax fulfilments (e.g. tax returns, communications, etc.) expiring in the period between 8 March 2020 and 31 May 2020 are postponed.
The suspended fulfilments shall be carried out within 30 June 2020 without the application of any penalty.
For the time being, the delivery and electronic filing of the statements of withholding tax related to 2019 remains on 31 March 2020 (deadline already extended compared to the original deadline).
For taxpayers carrying out a business, art or professional activity, which achieved a total amount of revenues or a turnover not exceeding 2 million Euro in the previous fiscal year, the following payments, expiring in the period between 8 March and 31 March 2020, are postponed:
- the withholding taxes pursuant to articles 23 and 24 of the Presidential Decree n. 600/1973, also relating to the regional and municipal charges, in relation to which the aforementioned subjects operate as a withholding agent;
- social security and welfare contributions and premiums for compulsory insurance.
The suspended payments shall be made - without the application of penalties and interest - in a single solution by 31 May 2020 or split in five equal monthly payments starting from the same date.
For taxpayers, that achieved a total amount of revenues or fees not exceeding 400,000 Euro in the previous tax period, the revenues and fees received in the period between the date of entry into force of the Decree and 31 March 2020 - upon releasing a specific declaration - are not subject to withholding taxes pursuant to articles 25 and 25-bis of the Presidential Decree n. 600/1973, by the withholding agent, provided that in the previous month they did not bear any expense for employee or similar work.
The suspended amounts shall be paid directly by the taxpayer - without the application of penalties and interest - in a single solution by 31 May 2020 or split in five equal monthly payments to be performed starting from the same above mentioned date.
Further specific exemptions are, however, provided for taxpayers who are resident or in any case operating in territories subject to previous provisions on COVID-19.
6 Remittance in terms for payments
Payments to public administrations that are due on 16 March 2020 are postponed until 20 March 2020.
7 Bonus to employees
A bonus of 100 Euro, to be weighted by the number of working days carried out at the workplace in March 2020, is recognised in favour of employees with a total yearly income not exceeding 40,000 Euro.
The bonus shall not be included in the taxable base for direct taxes purposes and shall be paid automatically by the employer, starting with the remuneration for the month of April, and in any case within the terms provided for the adjustments.
Withholding tax agents recover the incentive paid by offsetting through F24 Form.
8 Tax credit for sanitation costs in the workplace
In order to encourage the sanitisation of the workplace, as a preventive measure for the COVID-19 virus, a tax credit is introduced in favour of the subjects performing business, art or professional activities.
The tax credit for the 2020 tax period is equal to 50% of the expenses incurred for sanitising workplaces and work appliances, up to a maximum amount of 20,000 Euro.
The implementation of the tax credit is subject to the release of a forthcoming decree.
9 Tax credit for retailers
In favour of taxpayers carrying out business activities – with the exception of the activities of trade in food and basic necessities as listed by the Decree of 11 March 2020 – a tax credit equal to 60% of the amount of real estate rental expenses incurred in March 2020 is established (for the properties included in the cadastral category C / 1).
The tax credit will be used only through offsetting in the F24 form.
10 Pro-COVID Donations
Donations made to support the measures against the spread of COVID-19 are deductible from the taxable basis for IRES purposes, to the extent that they are made through foundations, associations, committees and entities.
The same donations are deductible from the taxable basis for IRAP purposes in the fiscal year in which the payment is made.
Donations made by individuals are deductible from the gross tax, for an amount equal to 30% of the donation, provided that it does not exceed 30,000 Euro.
11 Suspension of the terms relating to the activity of the tax offices
In the period between 8 March and 31 May 2020, the terms and deadlines for tax offices and, in general, tax authorities are suspended:
- with regard to liquidation, control, assessment, collection and litigation activities;
- to answer to ruling requests (e.g. ordinary, anti-avoidance, new investments, requests in the context of the collaborative compliance regime, etc.). The deadlines for submitting supplementary documentation to the ruling requests are also suspended. The deadlines for the ruling already filed (which can only be submitted electronically) during the suspension period, start as of 1 June 2020.
No specific indication is provided in relation to the tax settlement procedures. So far, Tax Offices are respecting the regular deadlines (without taking into account the suspension period) and the confrontation with taxpayers is made remotely (by phone or e-mail).
12 Statute of Limitation and Deadline for Tax Offices
The statute of limitations and deadlines relating to the activities of the offices and tax authorities, expiring in the present year, i.e. 2020, are extended until 31 December of the second year following that of the suspension (i.e. to 2022 for 2015).
13 Relationship with the Collection Agent
The deadlines for payment of sums due in the period between 8 March and 31 May in relation to collection notices, tax assessments already final, assessment notices issued by the Customs Agency and other local authorities, INPS assessment notices are deferred to 20 June 2020.
Payments due on 28 February in relation to the scrapping of notice of payments and payments due on 31 March relating to final installment of the notice of payments are deferred to 31 May.
14 Tax disputes
The decree extends the official postponement (already introduced with Legislative Decree 11/2020 of 8 March 2020) of the hearings scheduled for the period of 9 March - 15 April 2020.
Furthermore, the decree suspends for the same period the terms for the filing of any brief or document related to the tax proceedings for which the decree provided for the mandatory deferral of the hearings. If the expiry of the term begins during the suspension period, the start of the expiry of the term is deferred to the end of the suspension period (i.e. from 15 April).
It is also suspended the term to notify the appeal in the context of the first degree of the tax proceeding. A clarification is need in respect to the ongoing settlement procedure.
15 Postponement of the payments in the gaming sector
The deadline for the payment of the single tax collection on the appliances and the concession fee expiring on 30 April 2020 are postponed to 29 May 2020. The amounts due can be paid in monthly instalments of the same amount, with the legal interest calculated on a day-to-day basis. The first instalment shall be paid by 29 May 2020 and the subsequent instalments by the last day of the month. The last instalment shall be paid by 18 December 2020.
16 Strengthening of the Customs and Monopolies Agency
For the year 2020, the resources allocated to the remuneration of overtime work for the staff of the Customs and Monopolies Agency is increased by 8 million Euro, out of the Agency's financing resources, given the increase in controlling activities at ports, airports and customs.
17 Mention for waiving the postponements
By an ad hoc Decree of the Minister of Economics and Finance, specific forms of mention are recognised to taxpayers who do not avail themselves to one or more of the postponements of payments provided for by this Decree, upon previous communication to the Ministry.
18 Handling of company general meetings
Notwithstanding the provisions of art. 2364, c. 2, and by art. 2478-bis of the Italian Civil Code, all companies are allowed to call the ordinary general meeting for the approval of the financial statements within 180 days from the end of the financial year.
For limited companies and cooperative companies, the notice of call of the ordinary and extraordinary general meeting may provide, also by way of derogation from the provisions of the by-laws, for the expression of the vote electronically or by mail and for the attendance at the meeting by telecommunication means.
Furthermore, it is allowed that the shareholders' meetings take place, even exclusively, by telecommunication means guaranteeing the identification of the participants, their participation and the exercise of the right to vote, without the need for the chairman, the secretary or the notary to be in the same place, where applicable.
Limited liability companies in the form of S.r.l. may provide, by way of derogation from art. 2479, c. 4, of the Italian Civil Code and any provisions of the by-laws, for the expression of the vote by written consultation or by written consent.
The above provisions shall apply to the general meetings called by 31 July 2020 or by the date, if later, when the state of emergency will be in force.
Last reviewed: 19 March 2020