NEWSLETTER NO. 27 - 2020

Enterprises and self-employed people who meet the legal requirements may request the contributions to losses pursuant to the Relaunch Decree no later than 13 August 2020. If the requester is an heir who continues the business activity on behalf of the deceased, requests may be submitted by 24 August 2020 at the latest (decision no. 0230439/2020 as of 10 June 2020, Italian tax authority). 

Furthermore, the first clarifications concerning the use of the contributions on which there is no return have been provided (newsletter no. 15 as of 13 June 2020, Italian tax authority).

In its newsletter no. 14 as of 6 June 2020, the Italian tax authority provided clarifications concerning the tax credit for lease rentals of non-residential properties and of company leases.

For offsetting of tax credits, the tax code "6920" applies (resolution no. 32 as of 6 June 2020, Italian tax authority). 

TAX CREDIT FOR ENERGY-SAVING AND EARTHQUAKE-RESISTANT CONSTRUCTION MEASURES ON INVESTMENT PROPERTY

The tax credit applies to

• energy-saving measures pursuant to section 1 (334-347) of Law no. 296/2006,
• earthquake-resistant construction measures on properties pursuant to section 16 (1-bis ff.) of Decree Law no. 63/2013

implemented by business income holders on properties owned or held by them, regardless of whether such properties are classified as "immovable property used for the business of trade", as "property assets held for sale" or as "investment property" (resolution no. 34 as of 25 June 2020, Italian tax authority).

PERFORMANCES BONUSES

The tax benefit in relation to performance bonuses pursuant to section 1 (182-189) of Law 208/2015 applies if both the incremental objectives underlying the accrual of the bonus previously defined in the agreement and measured in the respective period established in the agreement are met and the related payment takes place after entering into the agreement. Hence, the criteria for measuring incremental objectives must be determined well in advance of any future productivity (decision no. 36 as of 26 June 2020, Italian tax authority).

TERRITORIALITY RULES ON TELECOMMUNICATION AND RADIO TRANSMISSION SERVICES AND ELECTRONIC SERVICES

The new section 7-octies of DPR 633/1972 governs the VAT territoriality of the telecommunication and radio transmission services and electronic services rendered to private principals, in force since 10 June 2020.

The new rule provides for a derogation from the general provision pursuant to section 7-ter of DPR 633/1972 according to which services are deemed to be provided in Italy when they are rendered to private principals by taxable persons established in Italy.

According to such derogation, the following services are deemed to be provided in Italy if rendered to private principals:

• electronic services, if the principal is domiciled in Italy and has no domicile abroad;
• telecommunication and radio transmission services, if the principal is domiciled in Italy, has no domicile abroad and such services are used in the EU.

However, the derogation does not apply:

1. if the service provider is a taxable person established in another EU Member State for services rendered to principals established in Italy, provided that all of the following conditions are met:
   • the service provider is not also established in another EU Member State;
   • the total amount net of VAT of the services rendered in the previous calendar year to non-taxable principals established in EU Member States other than the state in which the service provider is established did not exceed EUR 10K and as long as such limit is not exceeded in the current year;

• the service provider has not opted for the application of VAT in Italy.

1. if the service provider is a taxable person established in Italy for services rendered to principals established in another EU Member State, provided that all of the following conditions are met:
   • the service provider is not also established in another EU Member State;
   • the total amount net of VAT of the services rendered in the previous calendar year to non-taxable principals established in EU Member States other than Italy did not exceed EUR 10K and as long as such limit is not exceeded in the current year;
   • the service provider has not opted for the application of VAT in the other EU Member State.

RECREATIONAL CRAFT TERRITORIALITY RULES

The Italian tax authority has published the decision on adequate evidence for the use of recreational crafts outside the EU pursuant to section 7-quater (e) of DPR 633/1972, distinguishing between:

• recreational crafts with satellite navigation systems or transponders: evidence shall be given by means of data and information extracted from the navigation systems in use, which must be able to indicate precisely and exactly the maritime routes traveled on by the recreational crafts.
• recreational crafts without satellite navigation systems: evidence shall be given by means of the lease, rental or other similar short-term agreement; furthermore, at least two of the following evidences must be given: paper or digital navigation log or logbook data; digital photographs of the ship's position for each week of navigation identified by any device and detected at least twice a week; documentation (invoices, agreements, tax receipts and related means of payment) proving the mooring of the recreational craft in ports located outside the European Union; documentation (invoices, agreements, tax receipts and related means of payment) confirming the purchases of goods and/or services in stores outside the EU relating to their use outside the EU (decision no. 234483/2020 as of 15 June 2020, Italian tax authority). 

ELECTRONIC PROCEEDS

The Italian tax authority has adapted the measures for the storage and submission of electronic proceeds to the new terms established in the Relaunch Decree. Please note:

• the new file must be used from 1 January 2021;
• for the tax receipt lottery, the electronic data acquisition devices will have to be adapted by 31 December 2020;
• the manufacturer's declaration of compliance to the technical specifications of a model already approved by the Italian tax authority must be submitted by 31 December 2020 (decision no. 248558/2020 as of 15 June 2020, Italian tax authority). 

ONLINE SALES THROUGH ELECTRONIC INTERFACES

In its newsletter no. 13 as of 1 June 2020, the Italian tax authority provided clarifications on the terms and conditions for the submission of data on online sales of goods by using the electronic interface under section 13 (1) of Decree Law no. 34/2019.

The financial transaction tax pursuant to section 1 (491-500) of Law 228/2012 does not apply to corporate restructuring. Corporate restructuring also includes the joint contribution of a controlling share in BETA by several individuals in the newco ALFA pursuant to section 177 (2) of Italian Tax Code (TUIR); the foregoing applies if the contributors at least partially receive shares in the contributing company ALFA (answer to ruling application no. 170 as of 26 June 2020, Italian tax authority).

Yours sincerely.

HAGER & PARTNERS