herewith we would like to remind you that certifications on income of employees and self-employed workers as well as on other income ("certificazione unica – CU”) must be submitted to the Italian tax authority by 16 March 2021 at the latest.
With directive no. 13088 of 15 January 2021, the Italian tax authority has approved the certification forms for the year 2020 ("CU 2021"), together with the respective fill-in instructions and taxpayers information.
In order to fulfil the above-mentioned obligation, withholding agents must:
- file a detailed "regular" form with the Italian tax authority no later than by 16 March 2021 in order for the Italian tax authority to collect all data required for pre-filling the individuals' tax returns (730/2021 and REDDITI 2021 PF forms) and the withholding agents reports (770/2021 forms);
- hand over the "summary" of certification, which contains less detailed information than the "regular" form, to the income recipients in two counterparts no later than by 16 March 2021.
Section 1 (933) of the Italian law 205 as of 27 December 2017 (2018 Budget Law) sets forth that certifications on income that do not contain any data to be used for the pre-filling of tax returns may be submitted to the Italian tax authority no later than by the deadline set forth for the online filing of the 770 forms (2 November for 2021).
1. Personal and material scope of application
This certification must be submitted by all those who, in 2020, paid sums or valuables subject to withholding tax as:
- wages and salaries and similar income;
- self-employment income under section 53 of the Italian Tax Code (TUIR);
- commissions of any kind, subject to withholding tax according to section 25-bis of the Italian DPR 600/1973;
- provisions from doorstep selling under section 19 of the Italian legislative decree 114/98;
- considerations for procurement contracts subject to withholding tax under section 25-ter of the Italian DPR 600/1973;
- other income under section 67 of the Italian Tax Code (TUIR) (e.g. non-regular self-employment, remuneration for amateur sporting participants, etc.);
- fees and rental income for short-term leases, including subleases and concession of use to third parties effected for consideration by the user;
- compensation due on termination of agency contracts, on termination from the office of notary and on the termination of sporting activities, if exercised under a self-employed working relationship;
- remuneration paid further to third party seizure pursuant to section 21(15) of the Italian law 449 as of 27 December 1997;
- sums paid further to expropriation procedures under section 11 of the Italian law 413 as of 30 December 1991;
- relating withholding taxes and deductions;
- social security contributions and insurance premiums to the Italian Social Insurance Institute (INPS).
The 2021 certifications on income must be used also to certify any amount of income paid in 2020 that is not to be included in the tax base and in the social security base.
However, certifications on income do not apply in order to certify:
- dividends and similar income as well as withholding or substitute taxes applied, which must continue to be certified by using the relevant CUPE form (as approved by resolution 10663 of 15 January 2019 by the Italian tax authority, as amended on 11 February 2021);
- capital gains for which a plain paper certification containing the following continues to apply: general data and tax code of the taxpayer; type, subject and date of transaction; quantity of the transaction's financial assets; any contingent fees, differences and bonuses (section 10 of the Italian legislative decree no. 461/97 and number 3 of deliberation no. 13088 of 15 January 2021, as adopted by the Italian tax authority);
- interest and other financial income which continues to be certified on plain paper, as long as the amount of the sums and valuables paid, gross and net of any contingent deductions due, and withholding taxes applied, are certified (section 8, ministerial decree as of 9 January 1998);
Please bear in mind that certifications on income must be used also to certify the amount of income received by individuals (i) under special taxation schemes (minimum or flat tax payers) and (ii) not subjected to any withholding tax.
Finally, certifications on income must also be issued by employers who are not withholding agents: i) limited to social security contribution data relating to the Italian Social Insurance Institute (INPS); ii) excluding domestic workers to whom a simplified declaration must be delivered.
2. 2021 News
Please find below the most important news on the new form to be used for the 2020 certification on income:
- introduction of a new supplementary treatment concerning wages, salaries and similar income that does not add to the taxable income and replaces the so called Bonus Renzi. Said supplementary treatment is assigned to workers receiving income from employment (retirees excluded) or any income equivalent to wages with a gross tax amount that is higher than tax deductions granted and with a total annual income of no more than Euro 28,000.00;
- the introduction of a tax deduction for workers receiving income from employment (retirees excluded) or any income equivalent to wages and salaries, with a total annual income between Euro 28,000.00 and Euro 40,000.00, regarding services provided between 1 July 2020 and 31 December 2020;
- the correlation of the total income to the deductions of income tax (IRPEF) for expenses pursuant to section 15 of the Italian Tax Code (TUIR), which differ from expenses concerning interest expenses paid on loans and health care expenses (section 1(629) Italian law 160/2019);
- the introduction of a new section in the part regarding social security data, for the indication of incomes paid to shareholders of craftsman cooperatives (Code Z3) which have to be indicated in the form REDDITI 2021 PF (overview RR, section I); according to section 1(114) Italian law 208/2015, remunerations paid to members of craftsman cooperatives that determine a self-employment relationship are included among income equivalent to wages and salaries. However, this tax classification does not affect the respective social security regulations;
- due to the emergency caused by COVID-19 the following aspects are taken into account in the certification on income 2021:
- the safeguard clause pursuant to section 128 Decree Law 34/2020 which provides that workers are entitled to the so called Bonus Renzi (until 30 June 2020) and the new supplementary treatment (as from 1 July 2020), even if the gross tax amount payable is lower than the tax deductions granted due to the lower income from employment received in 2020. In this case, instead of applying social shock absorbers pursuant to Decree Law 18/2020, one has to assume the contractual remuneration that would have been received by the worker if it had not been for the pandemic;
- the premium amounting to Euro 100.00 which does not add to the taxable income and was paid to private and public employees with wages and salaries lower than Euro 40,000.00 who continued to work at their workplace in March 2020 (section 63 Decree Law 18/2020);
- the increase of the total amount of goods sold and services performed towards employees that does not add to the taxable income pursuant to section 51 (3) of the Italian Tax Code (TUIR) from Euro 258.23 to Euro 516.46 (section 112 DL 104/2020) in the tax year 2020;
- the amounts reimbursed to the providing institutions, net of withholding taxes, pursuant to section 150 Decree Law 34/2020;
- the reintroduction - only regarding the tax year 2020 - of the possibility to assign 2 per thousand of income tax (IRPEF) to cultural organisations included in the register of the Presidency of the Council of Ministers (section 97-bis Decree Law 104/2020).
3. Filing deadline
Herewith we would like to remind our clients that withholding agents must submit income certifications for the tax year 2020 by 16 March 2021. To this purpose, the Italian tax authority has published a form contained in directive no. 13088/2021.
This certification replaces the certification on self-employed income released on plain paper. Withholding agents must hand over the income certification 2021 (tax year 2020) to income recipients by 16 March 2021 at the latest.
Pursuant to Italian law 205/2017 certifications on income relating solely to income which is not taxable or declarable via a pre-filled income tax return may be filed no later than on the deadline of 31 October for the filing of the 770 income tax return (set forth on 2 November for 2021), without any penalties.
We would like to ask our clients that intend to have the certifications on income filed by us as an authorized intermediary to provide us with their consent by 26 February 2021 at the latest.
Please do not hesitate to contact us if you have any further questions.
HAGER & PARTNERS