Government measures in key jurisdictions 4th edition - Flipbook - Page 78
Italy
Tax
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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. A tax credit equal to 20% of the rental fees is also
granted to entities exceeding the €5 million threshold (in such case, the tax credit is limited to 10%
in case of going concern lease). The tax credit can be used to set off tax liabilities, can be assigned
to third-parties or can be transferred to the lessor as consideration for the rental fee.
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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.
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Revaluation of real estate assets for hotelier activities: 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.
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IRAP payments: 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.
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Tax credit for capital increase of medium-size enterprises: Taxpayers can benefit from a tax
credit equal to 20% of any capital increase (up to €2 million) in certain qualified Italian-based
companies. In addition to the above, the qualifying Italian-based companies increasing their
capital are also themselves entitled to a tax credit (up to a maximum of 30% of the capital
increase) equal to 50% of the net operating losses exceeding 10% of their net equity. The total
amount of benefits is capped to overall €800,000 per company. The tax credit applies subject to
the following conditions: (i) the capital increase is resolved and fully paid between 20 May 2020
and 31 December 2020, (ii) the companies resolving the capital increase had, in 2019, a turnover
between €5 million and €50 million (on a group consolidated basis) and suffered a turnover
reduction during March and April 2020 of at least 33% compared to the same months of 2019 (on
a group consolidated basis). A recapture mechanism will apply if, before January 2024, one of the
following cases occurs: (i) transfer of the shares or quotas received upon the capital increase, (ii)
distribution of reserves. The implementation of this provision is subject to the authorization of the
European Commission.
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Tax allowance for investment in innovative start-ups: Individuals investing in one or
more innovative start-ups or in innovative small-medium enterprises starting from 19 May 2020
can benefit from an allowance for personal income tax (so-called “IRPEF”) purposes equal to 50%
of the investment made. This benefit is capped at €300,000 for each tax year. The investment is
subject to a lock-up period of 3 years (otherwise a recapture mechanism will apply).
Has any new
legislation been
introduced in light of
Covid-19?
Government measures in key jurisdictions
78