Under the Italian legislative decree no. 104 as of 14 August 2020 (published in the Italian Official Gazette no. 203 as of 14 August 2020) the following additional tax measures aimed at supporting and relaunching the Italian economy are introduced.
CONTRIBUTIONS TO LOSSES FOR THE CATERING INDUSTRY
A EUR 600 million fund is allocated in order to provide contributions to losses to businesses operating under the ATECO codes 56.10.11, 56.29.10 and 56.29.20 (main activity) for the purchase of agricultural and food products, including wine products (even PDO and PGI labelled products).
Contributions to losses are recognized provided that the turnover and proceeds generated in the months between March and June 2020 is lower than two thirds of the turnover and proceeds generated in the months from March to June 2019.
These contributions are recognized also to all those who started their businesses as of 1 January 2019.
In order for the contributions to be paid out, those interested must file an application according to terms and conditions to be set forth by decree.
CONTRIBUTIONS TO LOSSES FOR OLD TOWN BUSINESSES
Businesses and individuals selling goods or services to the public in old town districts are recognized a contribution to losses.
Businesses and individuals are entitled to such contribution to losses provided that the June 2020 amount of turnover and proceeds is lower than two thirds of the amount of the June 2019 turnover and proceeds.
The amount of the contribution is calculated by applying a percentage to the difference between the June 2020 amount of turnover and proceeds and the June 2019 amount of turnover and proceeds as follows:
- 15 percent for those with proceeds or income not exceeding EUR 400;
- 10 percent for those with proceeds or income of no less than EUR 400 and no more than EUR 1 million;
- 5 percent for those with proceeds or income of more than EUR 1 million;
in the 2019 tax period.
Individuals are recognized a contribution to losses of no less than EUR 1,000, whereas all other entities are recognized a contribution to losses of no less than EUR 2,000. The amount of the contribution with no return must not exceed EUR 150,000.
TAX CREDIT FOR NON-RESIDENTIAL PROPERTY AND BUSINESS LEASE RENTALS
The tax credit for rental leases of non-residential properties and of business leases under the Relaunch Decree is extended to the month of June; and only for seasonal accommodation and tourism businesses also to July.
IMU (MUNICIPAL PROPERTY TAX) EXEMPTION FOR THE TOURISM AND ENTERAINMENT INDUSTRY
Pursuant to section 1 (738-783) of the Italian law no. 160/2019, the second instalment of municipal property tax for:
- properties used as seaside, lakeside and riverside resorts and thermal baths properties;
- category D/2 real estate properties and their respective appurtenances, as well as farm holiday properties, holiday resorts, youth hostels, mountain huts, summer sea and mountain camps, short-term room lettings, vacation homes and houses, bed-and-breakfast facilities, holiday residences and camping sites, provided that the respective owners also operate the businesses carried out therein;
- category D real estate properties used by businesses providing for exhibition solutions at trade fairs or events;
- category D real estate properties used as cinemas, theatres, concert and performance halls, provided that the respective owners also operate the business carried out therein;
- properties used as clubs, dancing halls, night clubs and similar, provided that the respective owners also operate the businesses carried out therein
is not due in 2020.
No municipal property tax (IMU) is due in 2021 and in 2022 for the properties under d).
The measures are subject to approval by the European Commission.
TAX CREDIT FOR THE RESTRUCTURING AND IMPROVEMENT OF TOURIST ACCOMMODATION FACILITIES AND HOTELS
A 65 percent tax credit for the restructuring and the improvement of tourist accommodation facilities and hotels under section 10 of the Italian law-decree no. 83/2014 is recognized in the two tax periods following the one as of 31 December 2019.
The tax credit may be claimed as an offset only.
TAX CREDIT FOR ADVERTISING INVESTMENTS IN FAVOUR OF PROFESSIONAL SPORTS LEAGUES AND SPORTS CLUBS AND AMATEUR SPORTS CLUBS AND SPORTS ASSOCIATIONS
In 2020 all businesses, self-employed people and non-commercial bodies providing for advertising investments, including sponsorships, in favour of:
- sports leagues that organize nationwide team championships in Olympic disciplines,
- professional sports clubs and amateur sports clubs and sports associations registered with the Italian National Olympic Committee (CONI) register and operating in Olympic disciplines and youth sports,
are recognized a tax credit equal to 50 percent of the investment made between 1 July 2020 and 31 December 2020.
The investment in advertising campaigns must amount to a total of no less than EUR 10,000 and must be destined to professional sports leagues and sports clubs and to amateur sports clubs and associations that in the 2019 tax period yielded proceeds in Italy of no less than EUR 200,000 and no more than EUR 15 million.
The tax credit is recognized up the threshold of total expenses. In the event of insufficient financial resources for all eligible applications, the tax credit theoretically recognized shall be proportionally divided amongst the beneficiaries, with an individual threshold for each applicant of 5 percent of total annual resources.
The tax credit may be claimed by offset only and an application must be filed directly with the sports department of the Presidency of the Council of Ministers ("Dipartimento dello sport della Presidenza del Consiglio dei ministri").
This tax incentive is recognized provided that payments were made by bank or postal draft or by using other traceable payment modes.
PAYMENT BY INSTALLMENTS OF SUSPENDED TAXES
Withholding taxes on income from employment, social security contributions, insurance premiums and VAT already suspended under the previous relaunch decree (section 126 and section 127 of the Italian law-decree 34/2020) may be paid by instalments, without any interest and penalties, as follows:
- an amount equal to 50 percent of the suspended sums: in one instalment by 16 September 2020 or in no more than 4 monthly instalments of equal amount, whereas the first instalment will be payable by 16 September 2020;
- the remaining 50 percent: in no more than 24 monthly instalments of equal amount, whereas the first instalment will be due by 16 January 2021.
Payments already made are not reimbursed.
POSTPONEMENT OF SECOND INSTALMENT (PAYMENT ON ACCOUNT)
The deadline for the payment of the second or sole payment on account for income tax and regional tax on productive activities (IRAP) purposes owed for the tax period following the one as of 31 December 2019 is extended to 30 April 2021 for all those carrying out business activities subject to ISA indexes (synthetic tax reliability indexes).
Such postponement applies to taxpayers that suffered a loss of turnover or proceeds of at least 33 percent in the first six months of 2020 compared to the same period of the previous year.
PAYMENT DEADLINE FOR TAX COLLECTION NOTICES
The deadlines for payments due between 8 March 2020 and 15 October 2020 according to
- tax collection notices issued by tax collection agents,
- notices under section 29 and section 30 of the Italian law-decree no. 78/2020,
are suspended. Suspended payments must be provided for in one instalment only by November 2020.
VALUE ADJUSTMENT OF BUSINESS ASSETS
All those exercising business activities may adjust the value of business assets and equity investments, except for real properties to which the business's production and trade operations are aimed to, resulting from the financial statements as of 31 December 2019.
The value adjustment must be made in the financial statements or accounts of the subsequent business year and may be provided for separately for each asset. The requirement to group assets into specific categories does not apply.
The higher value attributed to the assets at the time of value adjustment may be recognized as of the business year following the one the value adjustment refers to:
- for accounting and legal purposes only;
- also for income tax and regional tax on productive activities (IRAP) purposes through payment of a 3 percent substitute tax for depreciable and non-depreciable assets.
The positive balance of the value adjustment may be liberated, fully or in part, by applying a 10 percent substitute tax.
In the event of sale against consideration, allocation to shareholders or for purposes outside the scope of business or for personal use of the shareholder or of the entrepreneur's family members of assets adjusted in value before the beginning of the 4th business year following the one in which the value adjustment was recorded in the financial statement, the cost of the assets before value adjustment must be taken into account in order to determine capital gains or capital losses.
The 3 percent and the 10 percent substitute taxes are payable in no more than three instalments of equal amount. The first instalment is due within the deadline set forth for the final settlement (balance) of the income taxes relating to the tax period of reference in which the value adjustment was made. The remaining instalments are due within the deadlines respectively set forth for the final settlement (balance) of the income taxes relating to the subsequent tax periods. The amounts payable may be claimed by offset pursuant to section 17 of the Italian legislative decree 241/1997.
The provisions contained in section 11, section 13, section 14 and section 15 of the Italian law no. 342/2000 apply, whenever consistent. Hence, it is permissible also to re-align the higher values recorded in the financial statements as of 31 December 2019 to the tax values by paying the 3 percent substitute tax.
In the 2020 tax period the amount of goods sold and services rendered by the company to its employees that does not add to the taxable income pursuant to section 51 of the Italian Tax Code (TUIR) is increased to EUR 516.46.
HAGER & PARTNERS