Government measures in key jurisdictions 3rd edition final - Flipbook - Page 76
Italy
Tax
Has any new
legislation been
introduced in light of
Covid-19?
76
•
Tax payment deferral: Payments of VAT, payroll withholding taxes and social security and
compulsory insurance contributions due in March 2020 are suspended for companies (i) operating
in sectors most affected by Covid-19, or (ii) not exceeding certain turnover thresholds, or (iii)
operating in areas most affected by Covid-19. Suspended payments may be executed in one
payment by 16 September 2020, or in four instalments from 16 September 2020 onwards.
•
Tax payment deferral: Payment of VAT, payroll withholding taxes, and social security and
compulsory insurance contributions due in April and May 2020 are suspended for
companies that (i) incurred, respectively, a 33% or 50% reduction in monthly turnover in
March and April 2020 compared with March and April 2019, taking into account an
annual turnover up to or exceeding €50 million, or (ii) are active in sectors most affected
by Covid-19, or (iii) started their activity after 31 March 2019. Suspended payments may be
executed in one payment by 16 September 2020, or in four instalments from 16 September 2020
onwards.
•
Tax credit for COVID-19 related adaptation of work environment: A tax credit for 60% of
expenses (i) relating to the sanitation of offices and purchase of individual protection devices and
(ii) for adapting work environments to tackle the spread of the COVID-19 pandemic up to a
maximum of €60,000 (or € 80,000, depending on the beneficiary) is granted. The overall available
benefit budget is capped at €200 million for 2020. The tax credit can be used to set off tax
liabilities or can be assigned to third-parties.
•
Tax credit for rental fees: A tax credit equal to 60% of monthly rental fees paid in March,
April and May 2020 is granted to enterprises and self-employed workers in connection with
rental of real estate assets. This tax credit is available subject to the following conditions: (i)
the taxpayer had a total turnover in 2019 not higher than €5 million, (ii) the taxpayer
suffered a turnover reduction of at least 50% compared to the relevant months in 2019, (iii)
such monthly fees have been fully paid in 2020. This tax credit is limited to 30% if the real
estate is available by means of a going concern lease agreement or similar mixed contracts.
The tax credit can be used to set off tax liabilities or can be assigned to third-parties.
•
Conversion in Tax Credits of Deferred Tax Assets (DTA): Upon transfer of non-performing
receivables carried out until 31 December 2020, companies can opt for the conversion in tax
credits of DTAs generated by tax losses and surplus of notional interest deduction. The
conversion applies for an amount equal to 20% of the nominal value of the transferred
receivables. A 1.5% annual fee shall apply, until 2030, on the difference between converted
DTAs and corporate income tax due for the previous tax year.
•
: taxpayers that carry out
hotelier activities can step-up to the fair market value the tax costs of real estate assets used in
their business activity. No substitutive tax is due. This measure allows to minimize the taxable
capital gain upon disposal of the above assets.
•
: the balance for the regional tax on productive activities (so-called “IRAP”) for
2019 and the IRAP advance payment for 2020 (equal to 40% of total IRAP due for 2019) are no
longer due under certain conditions, while the IRAP advance payments for 2019 remain due.
Both the above cuts on IRAP payments are definitive, thus entailing a reduced tax burden on
taxpayers in respect of IRAP for tax year 2020. The benefit applies to taxpayers (other than
banks, other financial institutions and insurance companies) with total revenues not exceeding
€250 million in the last tax year.
Government measures in key jurisdictions