WHAT ARE THE MEASURES TAKEN BY THE ITALIAN GOVERNMENT? WHAT ARE THE CHANGES ON THE COMMERCIAL APPLICATIONS WITH ITALY? 23 March 2020

1.1.Tax measures

Four decrees (Decree of Minister of Economy and Finance dated February 24th, law decree n° 9/2020, law decree n° 11/2020 and law decree n° 16/2020) enacted emergency measures. Decree of Minister of Economy and Finance dated February 24th enacted measures that only apply to affected territories on the date it was published.

• Rules resulting from law decrees n° 9/2020 et n°16/2020
  • suspension, without limitation of turnover, for the sectors most concerned[1], of payments of withholding tax, social security and compulsory insurance contributions for the months of March and April, and of the payment of VAT for the month of March;
  • suspension of the payment of taxes and contributions for taxpayers whose turnover does not exceed 2 million euros (payment of VAT, withholding taxes and contributions for March);
  • for economic operators to whom the suspension does not apply, the deadline for payments due to public administrations, including those relating to social security and compulsory insurance contributions, is extended from March 16^th to March 20^th;
  • suspension until May 31^st 2020 of the deadlines for clearance, control, verification, recovery and litigation activities by the tax administration;
  • shops and boutiques benefit from a tax credit equal to 60% of their rent for the month of March;
  • the changes to the tax calendar introduced by Decree-Law n° 124 were brought forward to January 1^st, 2020 instead of January 1^st, 2021;
  • the deadline for providing the Italian tax authorities with the form for each employee indicating remuneration, withholding tax and tax deductions applied (certificazione unica) is extended until March 31^st, 2020;
  • the deadline for third parties (e.g. banks, insurance companies, social security institutions and universities) to provide the Italian tax authorities with the data to be included in taxpayers' pre-filled tax returns is extended until March 31^st, 2020;
  • pre-filled tax returns:
    • will be made available to taxpayers on the website of the Italian tax administration on May 5^th, 2020;
    • must be filed with the Italian tax authorities before September 30^th, 2020.
• Rules applicable to procedural matters (law decree n° 11/2020)
  • hearings regarding tax proceedings pending as of March 9^th, 2020 before all judicial offices are postponed to March 22^nd, 2020;
  • deadlines to complete any steps concerning pending tax proceedings are suspended until March 22^nd, 2020.

1.2.Social measures (law decree n° 16/2020)

• The redundancy fund shall, by way of derogation, be extended to the entire national territory, to all employees in all sectors of production;

Employers, including companies with less than 5 employees, who suspend or reduce their activity because of the epidemiological emergency, may use the redundancy fund by derogation to the new cause "COVID-19" for a maximum period of 9 weeks;

• the number of days of paid monthly leave covered by the notional contribution in the event of serious disability is increased by 12 additional days;
• prohibition of dismissals for the next two months;
• extension of technical unemployment to all workers;
• facilitation of short-term contracts;
• creation of a € 100 premium for workers earning less than € 40,000 per year.

1.3.Financial measures (law decree n° 16/2020)

• granting five-year loans (interest-free) to cover liquidity needs;
• moratorium on lending to micro, small and medium-sized enterprises (covering mortgages, leasing, credit facilities and short-term loans);
• strengthening of the central guarantee fund for small and medium-sized enterprises, including the renegotiation of existing loans;
• strengthening of the Confidi[2] for micro-enterprises, through simplification measures;

introduction of a counter-guarantee mechanism for banks, by Cassa Depositi e Prestiti (Italian public body), making it possible to extend credit also to medium and large enterprises affected by the crisis.