Covid-19 - Summary of Measures

ITALY

Cura Italia” Decree, the Revenue Agency answers the questions of associations, professionals and taxpayers

The Italian tax administration provides further clarifications regarding a vast range of fiscal doubts on the “Cura Italia” Decree. Particularly, with today's Circular n. 8/2020, which follows a cycle of "thematic" clarifying documents already published, the Agency provides an additional wide range of fiscal explanations to questions from operators and the press regarding the practical application of the Decree. Among the issues addressed, the extensions and suspensions of the terms for payments and other obligations, the suspension of the activities usually performed by tax authorities, as well as that of the payments entrusted to the collection agent.

The contents at issue - Today's document focuses, among other things, on specific fiscal measures enacted to support businesses and workers. Furthermore, clarifications are also provided on the deductibility of liberal donations by companies concerning food solidarity measures, even if carried out directly in favor of the public and private hospitalization, care, reception and assistance structures involved in the management of the COVID-19 emergency.

Tax Registry or “Anagrafe Tributaria”, stop sending data - The Circular also confirms the break, until 30 June, of communications to the Tax Registry. The postponement of the terms will apply to both annual and monthly communications.

Liberal payments of companies and tax credit for shops and stores equal to 60% of the monthly rental for real estate properties - Regarding the finalization of the 60 per cent tax credit in reference to the agreed rent for shops and stores, it will accrue provided that the rent has actually been paid. While, with regard to the deductibility of the liberal disbursements from companies, the Revenue specifies that as it is not based on the income achieved, the deduction will also apply in the presence of a tax loss of the firm made during the fiscal period in which the liberal expenditure in question was made.

The Revenue Commitment - The Revenue Commitment in providing clarifications to questions that arrive day after day during the emergency is continuous. To date, the clarifications and responses of the Revenue regarding doubts originating from the COVID emergency are collected in the following documents published and available online on the Revenue Agency website:

• circular no. 4 / E of 20 March 2020
• circular no. 5 / E of 20 March 2020
• circular no. 6 / E of 23 March 2020
• circular n. 7 / E of March 27, 2020
• resolution no. 12 / E of 18 March 2020
• resolution no. 14 / E of 21 March 2020.

Tax payments freeze –

As far as tax payment and compliance deadlines are concerned, the decree suspends, among other fiscal duties, certain payments of withholding tax on wages. At the same time also freezes payments of social security contributions, of mandatory insurance premiums and of related obligations. Furthermore, the value added tax (Vat) payments due for March 2020 are also delayed. About Vat, firstly deferred only for the tourism-hotel sector the decree extends the value added tax disbursements postponement to other subjects operating in different sectors. When the new fiscal deadline? Taxes not levied by withholding agents can be paid directly by the taxpayer in one lumpsum by 31 May 2020 or in a maximum of five equal monthly instalments, starting from May 2020, without penalties or interest for late payment.

Fiscal collection deferred –

The decree also suspends collection payment deadlines related to payment notices, or “cartelle di pagamento”, issued by collection agents and by the social security authorities, as well as tax assessment notices, the so called “avvisi di accertamento”, issued by the tax authorities.

Tax relief and incentives in response to coronavirus, Covid-19 –

Tax incentives provided concern payments of “employee bonuses” and tax credits for the expenses incurred by businesses to sanitize work premises. Besides, donations made by individuals and nonprofit entities during 2020 to the state, regions, local public authorities, other public institutions or legally recognized non-profit organizations to finance investments or expenses aimed at managing the Covid-19 emergency can benefit from a 30% tax deduction subject to a cap of €30.000.

Tax assessment, tax collection and tax litigation –

Finally, the decree provides for a temporary suspension of certain tax agency deadlines. For instance, from 8 March to 31 May 2020, there will be a postponement of the deadlines by which the tax agency must finalize tax audits, issue and serve notices of assessment, request payments and pursue litigation. The same time rescheduling apply either to tax rulings - ordinary rulings, fast-track rulings under the cooperative compliance regime, and substantial investment rulings – or to the admission to the cooperative compliance regime. Answers to applications for international rulings, such as APAs, unilateral corresponding adjustments on transfer pricing, and patent box relief are also freeze.

If you have any questions regarding this or any of the other initiatives offered to those affected by the current disruption, please contact Alberto C. Magri at ac.magri@clarksonhyde.it.