Funds and the Supplementary Fund
For the year 2020,
Companies/employers entitled to benefit from the new rules regarding the Funds
Maximum period for relief”
For contributions starting on February 23, 2020, the maximum duration is nine weeks with a final end date of August 2020, increased by a further 5 weeks in the same period for the only employers who made full use of the period previously granted.
It is also recognized any additional period of futher 4 weeks for periods running from 1.9.2020 to 31.10.2020 (as provided by the Relaunch Decree, that has modified the Cura Italia Decree).
Requirement relating to the length of employment of the employees:
The support is available only for employees hired before February 23, 2020. No length of service requirement is applied.
The Law Decree no. 34 of 19 May 2020, so called “Relaunch Decree“ (effective on its date of publication in the official gazette no. 128 - 19 May 2020; the Relaunch decree must be converted into law within 60 days of this date of publication) is, in chronological order, the third major intervention by the Government to tackle the economic consequences of the Covid-19 emergency, after the Cura Italia (Save Italy) and the Decreto Liquidità (Liquidity Decree).
The Relaunch Decree is aimed at protect businesses, families and workers from the damage of the health emergency, in order to start the recovery.
In particular, the Relaunch Decree provides for:
a) cancellation of the June IRAP (regional tax on productive activities) balance 2019 and first advance payment 2020, for enterprises and professionals with turnover up to € 250 million in the fiscal year 2019 (with the exception of banks, insurance companies and public administration);
b) postponement to September 16 of all tax payments suspended by the previous aforementioned decrees (see below);
c) a new tax credit for the adjusting of the workplaces (see below);
d) specific rules concerning the payments of the notifications of irregularities issued by the Italian tax administration (see below);
e) extension of deadlines related to the payments concerning tax assessment agreements, mediations, judicial settlements, tax credit recovery and clearance notices (see below);
f) extension of deadlines related to notification of assessment notices (see below);
g) postponement to September 16 of the deadline concerning the notification of the introductory appeal to the Tax Commission (see below);
h) the increase from € 700,000 to € one million, starting from 2020, of the annual limit of credits that can be offset through the F24 model.
i) the elimination of the "safeguard clauses" which provide for the automatic increase in VAT rates, starting from 2021. In this way, the VAT rates of 10% and 22% would remain unchanged even after January 1, 2021, unlike the provisions of current legislation (i.e. art.1 par. 718, Law 190/2014);
j) a specific exemption regime, in force until 31 December 2020, concerning numerous goods necessary for the containment and management of the epidemiological emergency. Starting from 1 January 2021, however, the aforementioned goods will be sold with the application of the 5% VAT rate (table A, part II-bis, attached to the presidential decree 633/72), introduced by the same Relaunch Decree.
In particular, the products that require the benefit described above are mainly lung ventilators for intensive and sub-intensive therapy, as well as thermometers, hand disinfectant cleaners, wall mounted dispensers for disinfectants, surgical masks, Ffp2 and Ffp3 masks and other goods with eminently sanitary purposes;
k) the Relaunch Decree postpones, from 1 January 2020 to 1 January 2021, the entry into force of the new rule on stamp duty introduced last year. Under this rule the Italian Revenue Agency will automatically check that e-invoices comply with stamp duty requirements and could apply penalties ranging from 100 percent to 500 percent of the stamp duty for non-compliant e-invoices.
Suspension of payments for enterprises and professionals
The provision is aimed at sustaining taxpayers dealing with liquidity matters arising from the Covid-19 emergency.
The beneficiaries are identified based on income earned in the previous FY.
the Liquidità Decree provides for the suspension of:
a) payment of withholding taxes on employment income and similar income, as well as
b) withholding of local surcharges,
c) VAT and
d) social security contributions and premium for mandatory insurance on employment.
Extension of suspension of tax duties and payments for small taxpayers
Extension of tax credit for sanitation costs in the workplace
Tax credit for the adjusting of the workplaces
Temporary provisions on accounting principles
Payments of the notifications of irregularities
Extension of deadlines related to specific tax procedure
Extension of deadlines related to notification of assessment notices
Temporary measures in support of companies’ liquidity
In order to ensure the necessary liquidity to companies affected by the COVID-19 epidemic, art. 1 of the Liquidità Decree sets out the enabling of disbursements of credit facilities under any form to businesses through the granting of guarantees by SACE (a subsidiary belonging to the Cassa Depositi e Prestiti group), in favor of banks.
SACE could grant, up to 31 December 2020, guarantees up to Eur 200 billion, allocating Eur 30 billion to SMEs, including self-employed workers and professionals VAT holders, to the extent that they already have reached the maximum credit issued by the Central Guarantee Fund for SMEs.
The guarantees could be delivered:
The Liquidità Decree sets forth three guarantee thresholds based on the beneficiary company size:
Lastly, the Liquidità Decree also provides for the State to issue a guarantee on exposures assumed or to be assumed by Cassa Depositi e Prestiti within 31 December 2020 and arising from guarantees on loan portfolios granted by credit institutions. The effectiveness of the above provisions is subject to the approval of the European Commission.
The Measures through the Guarantee Fund for SMEs
The Liquidità Decree lays down new measures of support to SMEs through the Central Guarantee Fund, valid up to 31 December 2020, temporarily derogating the rules applying to the Fund pursuant to L. 662/1996.
The set of measures is extremely detailed; here below we provided some high-level overview.
(previous measures of Cura Italia Decree were)
The Decree Liquidità issued on April 9 provides that:
The guarantees of the Fund shall be granted to all businesses having not more than 499 employees which have been impacted by the Covid-19 spread (even stated by self-declaration pursuant to art. 47 of DPR 445/2000):
The Relaunch Decree provides:
The amount of the contribution is between 20% and 10% of the reduction of turnover, depending on the amount of the revenues regarding the previous tax year;
The tax credit is also due, in the lesser amount of 30%, in the case of service contracts concerning complex services or business leases, including at least one property for non-residential use. The tax credit is commensurate with the amount paid in the fiscal year 2020 with reference to each of the months of March, April and May;
the person making the contribution in cash is entitled to a credit tax of 20% of the sums paid, with a maximum investment limit amounting to 2 million euros; the company is entitled to a tax credit based on losses carried out in 2020 and the capital increase.
The sum of these credits cannot exceed 800,000.00 euros. Both tax credits do not contribute to the formation of the tax base of income taxes and IRAP; their compensation in the F24 model is not subject to the general annual limit (raised by the same decree to one million euros), nor to the limit of 250.000,00 euro foreseen for the tax credits of facilitating nature. The distribution of reserves, of any kind, before 31.12.2023 by the company subject to the cash contribution entails the forfeiture of the benefit and the taxpayer's obligation to return the amount deducted, together with the legal interest.
Civil, criminal, tax, administrative proceedings – Hearings and proceedings deadlines
Judicial hearings in civil, criminal, tax, administrative proceedings, pending before all courts, are postponed to a date after 11 May 2020, thus extending the analogous provisions of the Cura Italia Decree (art. 83, Law Decree No. 18/2020) by a further 26 days.