Italy enacts tax relief to cushion Coronavirus emergency

By Francesca Amaddeo, Researcher, Tax Law Competence Centre (SUPSI), Manno, Switzerland

Last night, Italy’s Council of Ministers, in press release n. 33, announced extraordinary measures aimed at reducing the economic harm caused by the Coronavirus emergency affecting Italy, especially regions from the North.

The law decree adopted provides tax relief to help both individuals and businesses.

Deadlines extended

Tax deadlines have been extended for residents or entities having their place of effective management in the so called “red areas” of Beronico, Casalpusterlengo, Castelgerundo, Castiglione d’Adda Codogno, Fombio, Maleo, San Fiorano, Somaglia, Terranova dei Passerini, in Lombardy, and Vò Euganeo, in Veneto.

Indeed, as stated in a 24 February Economy Minister Decree, for those taxpayers, the payment of taxes is now deferred.

Also, all tax payments due in the period between 23 February and 30 April related to assessment agents’ decisions, social security contributions, customs agency decisions, local tax authority decisions’ concerning income and wealth are extended until 31 May 2020. The decree also suspends water, gas and electricity bills until 30 April, with the possibility to opt for monthly payments.

Further, the payment of preferential loans granted to businesses by Invitalia is suspended.

Moreover, the suspension of these deadlines is extended to all taxpayers who, even if resident in other areas, rely on intermediaries resident in the red zones.

Finally, deadlines for data communication aiming to fulfill tax return requirements are postponed to give tax advisors and consultants – wherever located – time be compliant.

Tax credits

Italy’s Economy Minister, Roberto Gualtieri, announced that the government will adopt measures costing EUR 3.6 billion (USD 4 billion) to help the economy. Specifically, a tax credit will be granted to companies that suffer a 25% fall in revenues. Additional funds are also provided to Italy’s health service.

Indeed, the decree provides, among other measures, to increase the guarantee fund for small and medium businesses with a priority, for 12 months, to grant a credit to businesses operating in red zones, encompassing the agri-food sector.

Moreover, the fund for helping exporting companies will be increased by 350 billion euros (USD 391 billion) and a revolving fund to grant loans at a zero rate to agricultural enterprises has been instituted. In addition, deadlines for reporting obligations by auditors and internal control bodies will be extended until 15 February 2021.

The government has granted employers “emergency provisions” for workers, aiming to support salaries.

The European Commission, aware of the impact upon the European economy, in particular on transportation and tourism, announced an aid package worth EUR 232 billion (USD 259) to help Member States during the COVID-19 emergency. Part of these funds will be allocated immediately. Italy will receive this European Union support.

In the meantime, a new Italian decree, with more tax measures, will be published in the next days and all hope the emergency will quickly pass over.

Francesca Amaddeo

Francesca Amaddeo

Researcher at Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI)
Dr. Francesca Amaddeo, PhD in European law and national legal systems, is an Italian lawyer that works as Researcher at the Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI).

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