NEWSLETTER N. 21 - 2021

  • TAX DECREE

    Dear Clients,

    please find below the latest tax news contained in the Italian "law-decree on urgent economic and fiscal provisions for safeguarding employment and the funding of immediate needs" adopted by the Italian Council of Ministers on 15 October 2021 and not yet published.

     

    READMISSION OF TAXPAYERS NO LONGER ELIGIBLE FOR THE TAX COLLECTION SETTLEMENT SCHEMES ("ROTTAMAZIONE-TER" AND "SALDO E STRALCIO")

    The payment of instalments made under the tax collection settlement schemes ("Rottamazione-ter" and "Saldo e Stralcio")

    1. due for 2020
    2. on 28 February, 31 March, 31 May, 31 July,

    are deemed timely - and do not cause settlements to be ineffective - if made in full by 30 November 2021.

     

    POSTPONEMENT OF PAYMENT DEADLINE FOR TAX COLLECTION NOTICES NOTIFIED BETWEEN 1 September 2021 and 31 December 2021

    A 150 days (instead of 60 days) payment deadline is set forth for tax collection payment notices notified by the tax collection agent between 1 September 2021 and 31 December 2021.

     

    DISQUALIFICATION FROM PAYMENT BY INSTALMENTS

    As to repayment plans effective on 8 March 2020 and the acceptance orders issued with reference to the applications filed until 31 December 2020, there is a disqualification from payment by instalments in the event of failure to provide for the payment of at least 18 instalments (not 10 anymore), even if not consecutive.

    Any contingent tax debtors disqualified from payments by instalments on the date of entry into force of the Decree are automatically readmitted to the same repayment plans, and the payment deadline of suspended instalments is 31 October 2021.

    However, the acts and measures adopted and the obligations on behalf of the tax collection agent in the period between 1 October 2021 and the entry into force of the Decree shall continue to be effective. Furthermore, the payments of suspended instalments, including late interest, penalties and additional sums due, already made shall continue to be acquired.

     

    CULTURE TAX CREDIT

    The culture tax credit under section 36-bis of the Italian law decree 41/2021 can no longer be claimed at the time of income tax return filing, but through offsetting only.

     

    RESEARCH AND DEVELOPMENT TAX CREDIT

    Taxpayers that at the date of entry into force of the Decree unduly claimed as off-sets tax credits for research and development investments under section 3 of the Italian law-decree, accrued as of the tax period after the one as per 31 December 2014 and until the tax period as per 31 December 2019, may provide for the repayment of the unduly claimed tax credit amount, with no penalties and interest due, at the terms and conditions specified below.

    The facilitated regularisation is reserved to those who in the specified tax period actually incurred the relevant expenses and carried out activities, which entirely or in part do not qualify as eligible research and development activities in the definition which is relevant for the purposes of the tax credit.

    Resident contractors who applied section 3 (1-bis) of the Italian law-decree 145/2013 in a manner which is not compliant to the authentic interpretation of the legal provision under section 1 (72) of the Italian law 145/2018, are eligible too.

    Furthermore, the regularisation may also be used by those who committed errors when quantifying or identifying eligible expenses that are in breach of the principles of relevance and of adequacy as well as when determining the historical average of reference.

    In any case, facilitated regularisation is not available in the event of fraudulent behaviours, of objectively or subjectively simulated circumstances, false representation of realities based on the use of false documents or invoices certifying non-existent transactions as well as in all events that lack of adequate documentation to prove that expenses eligible for the tax credit have been incurred.

    For spontaneous regularization interested taxpayers must submit a specific application to the Italian tax authority by 30 September 2022 specifying:

    • the tax period or the tax periods in which the tax credit accrued and to which the application is referred to,
    • the amounts of tax credit which is to be repaid spontaneously and all other data and elements required with reference to eligible activities and expenses.

    The content of the form of notice and the submission modes shall be set forth in a decision to be released by the Italian tax authority's chief executive officer by 31 May 2022.

    The amount due, as specified in the notice to be submitted to the Italian tax authority, must be paid (no offsets being allowed) by

    • 16 December 2022 at the latest,

    or

    • in three instalments of equal amount by 16 December 2022, by 16 December 2023 and 16 December 2024. Interest is due at legal rate.

    The procedure is deemed closed as soon as the entire amount due has been paid. In the event of payment by instalments, the failure to pay one of the instalments by the set due date gives rise to the failure to conclude the procedure, to tax roll registration of the remaining amounts due and the application of a penalty equal to 30 percent of the same plus interest.

    No punishment for the criminal offence under section 10-quater of the Italian legislative decree 74/2000 shall occur once regularisation is concluded.

    The regularisation procedure cannot be used for the repayment of credits already assessed in a tax credit collection notice as having been unduly claimed as set-off or in any other assessment notice which, at the date of entry into force of the Decree, has become finally enforceable.

    In the event in which the tax credit unduly claimed has already been assessed through an inquiry or in a tax credit collection notice or a tax assessment notice, which has not become finally enforceable yet at the date of entry into force of the Decree, the entire amount collectable, assessable or findable must be paid in full (payment by instalments is excluded).

     

    “FIRST HOME” TAX BENEFITS FOR NON-RESIDENTS

    Even Italian citizens living abroad are entitled to "first home" tax benefits, provided that the property is located in the Municipality, where the purchaser is or will become resident within eighteen months from the date of purchase or where the purchaser carries out his or her activity pursuant to section 1 (1 a) II-bis of the tariff enclosed to the Italian Registration Tax Code (TUR).

     

    PATENT BOX

    A new patent box scheme is introduced.

    As to the individual requirements, such patent box schemes refer to business income holders:

    • who are residents,
    • who are non-residents, provided that they are residents of a country that has in place an agreement with Italy to avoid double taxation and allow an effective exchange of information.

    As the objective requirements, the research and development expenses incurred for copyright protected software, industrial patents, trademarks, designs and models as well as processes, formulas and information on legally enforceable experiences acquired in the industrial, commercial, or scientific fields, which are directly or indirectly used by such taxpayers to carry out their business activity are increased by 90 percent for income tax purposes.

    Taxpayers who exercise the option may carry out research and development activities even through research agreements entered into by and between other companies than those that directly or indirectly control the business, are subsidiaries or are controlled by the same company that controls the business or by and between universities and research institutes and equivalent bodies incorporated for the design and development of products.

    The option can be exercised for five tax periods and is irrevocable and renewable. The detailed arrangements for the exercise of the option are laid down in a decision to be adopted by the Italian tax authority's chief executive officer.

    The information required to determine the increase may be contained in adequate documents prepared according to the instructions provided by a decision to be adopted by the Italian tax authority's chief executive officer. If the increase must be corrected, no penalties apply if during tax accesses, inspections, controls or any other assessment, the taxpayer provides the Italian tax office with the documents, as specified in the decision adopted by the Italian tax authority's chief executive officer, that are suitable to verify the correct increase. A taxpayer who is in possession of the documents requested in the decision adopted by Italian tax authority's chief executive officer must notify the Italian tax authority thereof in the tax return filed for the tax period, for which the tax benefit is claimed. If no notice of possession of adequate documentation is given, penalties shall apply in the event of correction of the increase.

    Taxpayers that exercise the option may not benefit from the research and development tax credit under the Italian law 160/2019 (198-206) for the entire duration of the option and with reference to the same expenses.

    The provisions under section 1 (37-45) of the Italian law 190/2014 and section 4 of the Italian law-decree 34/2019 are repealed.

    Taxpayers who exercised the option under section 1 (37-45) of the Italian law 190/2014 may adhere to the new tax benefit scheme (as an alternative to the tax scheme opted for) further to a notice to be submitted according to procedures still to be set forth under a decision to be adopted by the Italian tax authority's chief executive officer.

    The following taxpayers are excluded:

    • those who filed an application to adhere to the procedure pursuant to section 31-ter of the Italian DPR 600/1973 or a renewal application and signed a preliminary arrangement with the Italian tax authority to settle such procedures,
    • those who adhered to the settlement scheme under section 4 of the Italian law-decree 34/2019.

    Those who filed an application to adhere to the procedure under the above section 31-ter of the Italian DPR 600/1973 or an application to renew the terms and condition of an agreement already entered into and who not having signed an agreement yet wish to adhere to the new tax benefit scheme giving notice of their intention to renounce the preliminary ruling procedure or the procedure of renewal of the same, in compliance with the modes still to be set forth by the Italian tax authority's chief executive officer.

     

    Yours sincerely,

    HAGER & PARTNERS

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