NEWSLETTER NO. 23 - 2020 / CURE ITALY AND LIQUIDITY DECREES

  • CURE ITALY AND LIQUIDITY DECREES

    SUSPENSION OF TAX OBLIGATIONS

    The tax obligations suspended until 30 June 2020 include:

    • the filing of individual annual VAT returns (even for non-residents identified for VAT purposes in Italy or using a tax representative in Italy);
    • the filing of VAT TR forms;
    • the filing of periodic VAT settlement communications for 2020 (quarter I);
    • the filing of a cross-border transaction report (esterometro) for 2020 (quarter I);
    • the filing of forms for associations (modello EAS);
    • the filing of INTRA 12 forms;
    • the filing of an annual report by insurers on total premiums and ancillary charges collected;
    • the filing of reports on financial transactions carried out during the business year (to be filed, upon full implementation, no later than four months from balance sheet date), including reports on the payment of stamp duties by banks and other entities carrying out financing transactions;
    • the reporting of events occurred after the filing of a deed (fulfilment of a condition subsequent, execution of the deed prior to fulfilment of a condition subsequent or of events such as to amend the legal effects that require additional registration fees to be paid).
    • The duty to electronically store and submit daily proceeds, however, is not suspended (Italian tax authority, newsletter no. 11 as of 6 May 2020).

     

    SUSPENSION OF VAT PAYMENTS UNDER SETTLMENT OF GROUP VAT AND UNDER A VAT GROUP

    In order for VAT payments due in April and May to be suspended, it is sufficient that even one company only of those taking part in the settlement of group VAT meets the necessary requirements, provided that the amount of revenue derived from the business carried out by such company prevails over the revenue achieved at group level. However, if the predominance requirement is not satisfied, but one or more companies taking part in group VAT settlement satisfy the requirements needed in order to benefit from suspension, it is possible anyway to exclude the debt allocated to such companies from periodical group VAT settlement relating to March 2020 and/or April 2020. The same clarifications also apply to VAT groups (Italian tax authority, newsletter no. 11 as of 6 May 2020).

     

    SUSPENSION OF TAX PAYMENTS IN THE EVENT OF A MERGER

    In the event of a merger the required loss in turnover must be assessed by comparing the merging company's March 2020 and April 2020 turnover with the sum of the turnovers achieved by the single companies (merging company and merged company) relating to March 2020 and April 2020 respectively (Italian tax authority, newsletter no. 11 as of 6 May 2020).

     

    TAX CREDIT FOR SHOPS AND STORES

    The tax credit for the lease of shops and stores is recognized even for:

    • building fees charged to the lessee, jointly with the lease rental as a single amount, as agreed upon under the lease agreement;
    • expenses relating to lease rentals for C/3 appurtenances used to carry out business (Italian tax authority, newsletter no. 11 as of 6 May 2020).

     

    TAX DEDUCTION FOR THE PURCHASE OF MASKS

    The expenses incurred for the purchase of individual protection devices may be deducted by taxpayers as health expenses at the time of filing their income tax return for any amount exceeding EUR 129.11, provided that they are able to provide the required evidence of the purchase - through tax receipt or invoice - and of the identity of the taxpayer who incurred the expenses as well as of the devices' compliance. More specifically, the purchase document must show: i) the AD code (expenses relating to the purchase or lease of medical devices with CE certification); ii) the CE certification for devices included in the database of medical devices displayed on the Italian health ministry's homepage; iii) the certificate of compliance with European provisions on products not contained in the database of medical devices (Italian tax authority, newsletter no. 11 as of 6 May 2020).

     

    INSURANCE PREMIUS FOR EMPLOYEES

    Insurance premiums paid by the employer to all or to some specific categories of employees further to the subscription of insurance policies covering the risk of a COVID-19 infection do not add to taxable income from employment (Italian tax authority, newsletter no. 11 as of 6 May 2020).

     

    CHARITABLE DONATIONS COVID-19

    In order to benefit from deductions of charitable donations made to finance measures aimed at the containment of the Coronavirus spread (section 66 of the Italian law-decree 18/2020) set forth:

    • at 30 percent (up to no more than EUR 30,000.00) for individuals and non-commercial entities and;
    • at the full amount for IRES taxpayers,

    donations must be paid by:

    • bank or postal draft;
    • other traceable modes of payment (credit cards, prepaid cards, (non-transferable) bank cheques)

    If charitable donations are made through brokers/intermediaries and/or crowdfunding platforms, the intermediary must also issue a confirmation stating that the donation was paid to bank accounts dedicated to the epidemiological emergency from COVID-19 (Italian tax authority, decision no. 21 as of 28 April 2020).

     

    SUSPENSION OF EVICTIONS

    The suspension deadline for the execution of repossession orders, even for non-residential properties, is postponed for two months. Hence, pending eviction proceedings are suspended until 1 September 2020 (Cure Italy decree conversion law no. 27 as of 24 April 2020).

     

    EXTENSION OF PERMITS, CONCESSIONS AND SOCIAL SECURITY PAYMENT CERTIFICATES (DURC)

    All certificates, declarations, permits, concessions, authorizations, approvals and deadlines for the commencement and the completion of works under section 15 of the Italian consolidated laws on building (Testo unico dell'edilizia - DPR 380/2001) expiring between 31 January 2020 and 31 July 2020 shall continue to be valid for the 90 days following the declared end of the emergency. This extension also applies to certified notices of commencement of (construction) works (SCIA), to occupancy certificates, to landscape and environmental authorizations, to the collection of building permits issued until the declared end of the emergency, the commencement and the completion of works under parcelling agreements and for implementation plans, to the social security contribution payment certificate (DURC - documento unico di regolaritá contributiva) and to environmental authorizations anyhow denominated (Cure Italy decree conversion law no. 27 as of 24 April 2020).

  • DIRECT TAXES

    PAYMENT IN LIEU OF MEALS

    Sums paid by a company to own employees to reimburse meal expenses incurred through in-app reimbursement are deemed payments in lieu of meals and, hence, fully add to the employees' taxable income. They do not qualify as so-called “widespread” corporate canteen services and, hence, are not eligible to ensure a meal allowance to all and/or to a specific category of employees (Italian tax authority, answer to ruling application no. 122 as of 24 April 2020).

     

    TAX CREDIT FOR ADVERTISING

    In 2020 the tax credit for advertising investments and expenses incurred is recognized even in the absence of advertising investments made in previous years. Indeed, the requirement of a minimum increase of 1 percent of the advertising investment compared to the previous year's investment is no longer required as a prerequisite to have access to the tax benefit. Furthermore, in 2020 this tax credit is calculated at 30 percent of the entire value of the investments made, and not on 75 percent of the incremental margin. Hence, in 2020 only, the tax benefit may be accessed even by the following persons that:

    • plan investments lower than the ones made in 2019;
    • did not make advertising investments in 2019;
    • started their business in 2020 (press release as of 15 April 2020 by the prime minister - Dipartimento informazione e editoria).

     

    TAX CREDIT FOR ENERGY-EFFICIENCY IMPROVEMENT MEASURES

    The tax credit corresponding to the deduction recognized for energy-efficiency improvement measures under section 14 of the Italian law-decree 63/2013 may be obtained even by a company that belongs to the same company network of the company that carried out the works. If purchased at a price lower than the par value, the unexpected profits (equal to the difference between the par value and the credit purchase cost) do add to the taxable income in the business year in which the credit is obtained (Italian tax authority, answer to ruling application no. 105 as of 15 April 2020).

     

    FOREIGN DIVIDENDS

    Profits from foreign sources may be shown in the income tax return as the amount corresponding to the so-called "exemption threshold" and the tax withheld abroad must be specified only if such tax is levied by a resident intermediary in charge of collecting withholding tax.

    Hence, if there is no intermediary withholding the tax, foreign dividends must be subjected to tax in Italy through a substitute tax, gross of any contingent taxes withheld abroad (Italian tax authority, answer to request for advance ruling no. 111 as of 21 April 2020).

  • VALUE ADDED TAX

    INTRA-COMMUNITY SALES

    In order for intra-community sales to be performed, the following requirements must be met concomitantly:

    • transaction made for consideration;
    • acquisition and transfer of right of ownership or any other real right on assets;
    • status of economic operator of the domestic seller and of the EU buyer;
    • actual movement of goods from Italy to another EU member state, regardless of whether the transport and/or shipment is made by the seller, the buyer or a third party.

    In order to show the actual movement of goods, in particular as regards the transport of goods by the purchaser, the seller may provide evidence of the movements of goods through the following documents:

    • invoice of sale to the EU purchaser;
    • recapitulative statement of intra-Community sales performed;
    • transport document (CMR) signed by the carrier taking charge of the goods and/or by the recipient for receipt;
    • purchaser's bank transfer made to pay the goods (Italian tax authority, answer to request for advance ruling no. 117 as of 23 April 2020)

     

    Yours sincerely,

    HAGER & PARTNERS

Meet the team

Professional expertise, dedication and commitment are the features which have been distinguishing us for more than 25 years. Choose our experts for tailor-made consultancy: contact us and we will find the best solution for you.

Cookies help us in providing our services. By using our services you agree that we set cookies. Read more.