Following the Relaunch Decree and the substantial tax measures contained therein, the Revenue Agency has created a Vademecum (text at the bottom) which illustrates, explains and explores the tax benefits provided for by the decree, and the operating procedures, to the audience of the recipients of the measures. The extremely substantial and difficult to read regulatory provision is summarized in summary sheets, to understand not only what benefits are expected, but above all to answer the most frequently asked questions: how does the tax credit work? How do you sell it or transform it? What tax deadlines are suspended? What happens to expiring payment cards? Below we try to explain the content of the clarifications of the Revenue Agency, distinguishing the benefits for businesses from those for individuals.
1. IRAP not due
Only the 2019 IRAP advance will be paid, while the 2019 balance and the first installment of the 2020 advance will not be due. Since the IRAP advance is equal to 100% of the tax due, those who have the most benefit from this measure a tax base in 2019 greater than that of 2018, and which therefore paid the Irap 2019 advance on the tax base of 2018. In fact, they would have had to adjust the actual tax due on the tax base of 2019 with the payment of the balance 2019. But the 2019 balance is not due. The first installment of the Irap of 2020 is not due, and is not simply suspended, but definitively written off, as it is specified that the amount of the aforementioned installment must be excluded from the calculation of the tax that will be paid at the time of the balance. .
Only entrepreneurs and self-employed workers whose revenues and fees have not exceeded the sum of 250 million euros in the previous tax period benefit from this change. On the other hand, insurance, public bodies, financial intermediaries and holding companies are clearly excluded.
They may receive a non-refundable sum business operators and self-employed, with revenues in the previous tax period not exceeding 5 million Euros, as well as holders of agricultural income with VAT number. Those who have ceased their activity, public bodies and financial intermediaries, as well as professionals registered in the compulsory social security schemes of private bodies are excluded from this contribution. Even those who received the 600 Euro bonus in March will not be able to receive the contribution (art. 27 and 38 of the D.L. 18/2020).
The condition for access to the contribution is that the turnover for the month of April 2020 is two thirds lower than the turnover for April 2019.
The sum that will be paid is calculated by applying a percentage on the difference between the turnover of April 2019 and that of April 2020. The percentage is 20% of the difference in turnover, for VAT numbers with revenues of less than 400 thousand Euros in the tax period of 2019; 15% for VAT numbers with revenues between 400 thousand and 1 million Euros; 10% for companies with revenues between 1 million and 5 million Euros.
The Revenue Agency announces that the contribution will be paid with direct credit to the current account bank of the beneficiary, following the submission of an application addressed to the Revenue Agency with telematic procedure which will be specifically outlined in a future provision. The request must be submitted within 60 days from the date on which the procedure will be started.
Businesses, including farms, self-employed workers, and third sector entities (including civilly recognized religious bodies, limited to non-residential properties dedicated to institutional activity) will be able to benefit from an equal tax credit at 60% of the rent actually paid in March April and May 2020, for the properties in which they operate.
Those who, among the subjects indicated above, have suffered, in the reference month of the fee to be deducted, a loss of turnover of less than 50% compared to last year are excluded from the benefit. Furthermore, individuals whose compensation exceeds 5 million euros, with the express exception of hotel companies, which can also “exceed” the aforementioned limit, cannot benefit from the measure.
Tourist structures with seasonal activities will be able to take advantage of the tax credit with reference to each of the months of April May and June 2020.
The operating procedures to assert the aforementioned credit consist in the possibility of compensating the amounts in the F24 model, or even of transferring the tax credit to the lessor, or even to the bank.
Among the measures reserved for individuals, outside the business or profession or art, there is certainly what is known as Eco bonus / Earthquake Bonus. Autonomous Institutes of Public housing, and building cooperatives will also be able to take advantage of the tax credit, limited to properties owned by the cooperatives themselves or assigned for the enjoyment of their members.
A substantial increase is envisaged in the percentage of tax credit already envisaged for energy efficiency interventions, reduction of seismic risk, installation of photovoltaics and columns for charging electric vehicles. The deduction now admissible under the decree is equal to 110% of the expenses incurred in the period 1 July 2020 – 31 December 2021.
The deduction can be divided into five annual installments, or it can be transformed into a tax credit to be transferred to third parties (including credit institutions) or finally it can be used as a discount on the cost of the supplier invoice.
However, it is specified that the deductions for the energy improvement, for the replacement of the air conditioning systems or for the thermal insulation of the building, will not enjoy the benefit if performed on the second houses configured as single-family buildings, while it will be possible to use it for the second condominium or multi-family houses.
The granting of incentives in the form of a tax credit is accompanied by the possibility of being able to to commute certain tax deductions provided for by the decree, in one price reduction due to the supplier, or alternatively transform them into a tax credit transferable to third parties (see par.6).
The interventions for which this possibility is allowed are those of recovery of the building heritage, energy efficiency, anti-seismic measures, interventions on the facades, photovoltaic panels and columns for electric vehicles.
The discount on the cost of these interventions can go up to the total amount due. This limitation means, for example, in relation to the 110% eco-bonus, that the maximum possible discount on the cost of the work will be equal to 100% of the price. The portion of the tax credit not used in the year of the intervention (for example the residual 10% that was not discounted by the work invoice) can be transferred, but not reimbursed and not even enforced in subsequent tax years.
Tax credits for rents, for sanitization of the workplace e for the adaptation of the workplace they can be transferred, even for a part of the credit, to other subjects (including, for example, credit institutions) who can also use the credit transferred in compensation for their taxes.
Indeed the portion of the tax credit due, which is not used in the year, cannot be used in subsequent years nor can a refund be obtained. For this limitation, it appears convenient, especially for those jobs that have a significant cost, well above the taxes that the beneficiary will incur during the year, foresee the possibility of assigning the credit to the supplier or to the company that carries out the works, to the in order to obtain, for example, a reduction in labor costs, or to the credit institution to obtain financing for the work to be performed. The transfer mechanism must therefore be used to avoid losing a part of the credit that cannot be used as compensation for one’s taxes and which cannot be used in the following years.
Another characteristic of the tax incentive mechanism for tax credits is that they cannot be compensated with the debts registered as a role against the taxpayer.
The debts will therefore have to be paid, with the deferral of the deadlines set by the decree, while the credits can be offset against the new taxes paid during the year, or transferred according to the mechanisms described above.
In order to allow a large use of the tax credit, and the possibility of its transfer, the maximum annual ceiling of tax credits that can be offset are eliminated throughout 2020. The aforementioned limit, set at 700 thousand euros, and for subcontractors at 1 million euros, is increased to one million for all taxpayers.
Self-employed workers or companies that carry out business in a place open to the public, will benefit from the deduction of 60% of expenses incurred in this year for the implementation of the adaptation measures to the containment health measures of Covid-19.
The maximum amount of expenses that can be deducted is equal to Euro 80 thousand.
Adjustment interventions include those of refurbishment of canteens and changing rooms, those supported for the expansion or creation of common spaces, entrances and medical spaces. Also considered are the purchases of temperature control equipment, and the purchase of safety furnishings, such as protective devices for cases or for separating shop staff from customers.
The tax credit can be cumulated with other concessions foreseen by the decree for the same expenses, such as for example the deductions for the sanitation costs, or the VAT reduction for the protection devices, within the limit of the expenses actually incurred.
Credit is transferable to third parties, but it is not refundable if it is not used during the year.
Although the Revenue Agency’s Vademecum does not mention it, the text of the decree in paragraph 2 of art. 120 is clear in providing that the aforementioned tax credit can be brought “exclusively in compensation” and can be used only in the tax year 2021.
Companies benefit from the exemption from paying VAT on the purchase of masks and medical devices and personal protection. The exemption is valid for the year 2020, while from 1 January 2021 VAT will be reintroduced but within the limit of 5%.
In order to encourage the resumption of work activities, including most recently those of commercial establishments and tourism and restaurant activities, regional rules and protocols are envisaged which impose the sanitizing the rooms.
In order to meet the aforementioned expenses, businesses, self-employed workers and commercial bodies, as well as civilly recognized religious bodies, are entitled to deduct 60% of the costs incurred for sanitation, for the purchase of the necessary tools, for the purchase of protective devices (masks, protective barriers, gloves etc ..), up to a maximum expenditure of 60 thousand Euros.
The Revenue Agency’s vademecum specifies the operating procedures for benefiting from the tax credit, taking the opportunity to bring the expense to compensation in F24, without limit of amount.
The transfer to third parties is also possible for the credit deriving from sanitation costs, as for that provided for rental fees and for the costs of adapting work environments.
Furthermore, for the same expenses (masks, gloves, protective devices, barriers …) it is possible to combine the tax credit with the credit granted for the adaptation of the workplace.
Finally, the Revenue Agency specifies that this credit will not be considered for the formation of income for personal income tax and IRAP purposes.
Part of the tax due dates falling between March and June are postponed to September 2016, and payable in a single installment or up to a maximum of four monthly installments, provided that the payment of the first installment takes place by the deadline of September 16.
Let’s see what taxes it is.
Meanwhile, it must be said that the decree does not mention the 2020 income models for the taxes due in the year 2019, for which the expiration of the first advance on 30 June seems to remain firm for the moment, except for further future regulatory provisions.
The following reductions are foreseen for subjects engaged in business, art or profession, with rivals of less than 50 million Euros in the tax period of the previous year, provided that they have suffered a 33% reduction in turnover compared to the months of March April May of last year:
- payments of social security contributions and premiums for compulsory insurance.
- withholding taxes on employee earnings
- deductions from the regional and municipal surcharge
- VAT payments.
For those with revenues not exceeding € 400 thousand, withholding taxes on the fees due to the withholding tax remain suspended, provided that in the previous month, however, they did not incur expenses for employee work. The sums due to the substitute will instead be paid directly by the taxpayer, on 16 September.
- The installments due between 9 March and 31 May for the facilitated definitions of the minutes of the dispute, the assessment documents, the definition of the pending disputes, are postponed to 16 September with payment in a single installment or in four monthly installments, without application of penalties or interests. Installments due after May 31, 2020, on the other hand, must be paid at the agreed deadline.
- The installments for the so-called are also extended scrapping “ter” (D.L. 119/2018) and for the balance and excerpt (D.L. 145/2018): payments can be made by December 10th without losing the facilitations provided and without interest or penalties. The date of December 10th is the last date by which to make the payments, with the exclusion also of the tolerance of 5 days for the payment.
- Taxpayers who in 2019 lapsed from the facilitated installment of the Scrapping ter and the Balance and excerpt, for late or non-payment of the expected installments, can submit a new request to agree on an extension plan for the scrapped but unpaid installments.
The foreclosures of pensions and wages, promoted by the Collection Agent or by local authorities, are blocked until August 31, 2020, so that the distrained portion will not be retained by the bank or employer and will instead be fully usable for the economic needs of taxpayers in this time of crisis.
However, the provisions already made before the suspension and not yet collected, or the sums now collected by the Collection Agent, cannot be returned to the taxpayer.
Article. 48 bis of Presidential Decree no. 602 of 1973 provides for the obligation for the Public Administration and for companies with a predominantly public participation, before making payments to a company, or in any case to a subject, for an amount greater than 5 thousand Euros, to check whether it is in default towards the Treasury. The verification is also carried out through an electronic procedure. In the event of the existence of unpaid debts, the public administration and publicly-owned companies cannot make payments.
During this period and until 31 August 2020, the obligation of this prior verification for payment purposes is suspended. The rule is consistent with the previous debt suspension measures with the tax authorities, even if in consideration of the moment of crisis, it seems difficult to speed up and concentrate precisely in these months the payments of the Public Administration to private individuals, whose times already in better times are extremely long.
For the entire period from 8 March to 31 August 2020, the Collection Agent must suspend the notification of:
- payment cards
- INPS debit notices (for example relating to the return of sums for indemnities not due, or incorrectly calculated)
- injunctions or investigations by local authorities (for example relating to Tari or Imu taxes etc …)
The suspension is related to debts accrued before March 8.
For documents already notified before March 8, whose deadlines fall in the suspension period, it is possible defer payment to September 30, 2020.
The deeds of assessment, contestation, sanctions, recoveries of tax credits, the adjustment of the liquidations, which refer to deeds or taxes whose expiry terms for the due date of the same are due in the period 8 March-31 December 2020 will be notified starting January 1, 2021 and until 31 December 2021. So not only will the notifications of the folders arrive after the date of next January, but also the terms of forfeiture to which the tax debts would have been subject, are extended by one year, to allow not only a respite to the citizens , but in return, the bailout of the tax receivables close to expiry.
If an installment request is submitted until 31 August 2020, and for the installments that had been requested before the Covid-19 emergency (going backwards until 1 September 2019) for arrears in tax payables, the expiry of the installment plan in the event of non-payment, is provided only if ten consecutive installments are not paid. The previous limit which caused the installment payment to lapse was set in five consecutive installments. The law takes into account the unexpected and unpredictable economic difficulty facing taxpayers who had recently paid off their debts with the tax authorities, and the uncertainty about the future in which taxpayers who will apply in installments during this period find themselves. The delays therefore, in the payment of the installments, will have a tolerance doubled compared to the previous period.
Penalties do not apply to those who are not yet in compliance with the electronic cash register, whose deadline was set for 1 July 2020. The deadline for adapting the cash register to the electronic sending procedure is extended to 1 January 2021. of the daily fees. The obligation to send the daily fees, every month, with the electronic submission procedure to the Inland Revenue remains unaffected.
Therefore, the start of the “receipt lottery”, ie the prize competition organized by the Inland Revenue, with which for each electronic receipt corresponding to a purchase of more than 1 Euro, it will be possible to show on January 1, 2021 to the shopkeeper his own lottery code generated by the system made available to the Inland Revenue, and to participate in the monthly draw with three prizes per month of 30 thousand Euros each and an annual prize of one million Euros. The lottery, designed to stimulate VAT revenue, requires the full functioning of the electronic cash registers and the issue of electronic receipts.
A further consequence of the extension of the implementation of the electronic cash registers, is the extension to January 1, 2021 of the pre-compilation of VAT reports by the Revenue Agency.
Beyond the title of the rule, it is a small tax benefit intended for businesses holding concessions or authorizations for the occupation of public land.
The measure foresees that for new applications for occupation of public land and for requests for expansion of the same, businesses will not have to pay the stamp duty foreseen, for the entire period from 1 May 2020, to 31 October 2020. The measure , really small compared to the extent of the crisis of bars, restaurants, bathing establishments etc., is however designed with a view to facilitating the expansion of the outdoor spaces of the premises, in order to allow greater influx while maintaining the distance between the people.
Even the “holiday bonus“, Promised to families with low incomes to encourage tourism in Italy, is not properly a bonus, ie a sum paid to the beneficiary, but has the form of a tax credit and is correctly defined in the Revenue Agency’s Vademecum as” tax holiday credit “. The bonus actually consists of one discount applied by the hotelier to the end customer, for the maximum amount of 500 Euros per family. The aforementioned discount will be refunded to the hotelier in the form of a tax credit, to be used without limit of amount in compensation in the F24 model. Alternatively, the hotelier may transfer the accumulated tax credit to the credit institutions.
The tax credit application methods must be defined with special provision of the Director of the Revenue Agencytherefore, despite the fact that the tourist season is just around the corner and reservations must begin to partially recover the lost time, there is still no clarity on how to use the aforementioned tax credit for tourism operators.
The availability of a 500 Euro “bonus” is promised for families with ISEE not exceeding 40 thousand Euro and with more than two family members, while the sum is reduced to 300 Euro for families consisting of only two members, and 150 Euros for singles. But this sum will not be disbursed in cash, but will be enforced for 80% of the amount assigned as a discount to be obtained by the hotelier, (who in turn will be able to transform it into a tax credit, also transferable) and for the remaining 20% will instead be deducted by the bonus holder. Unfortunately, this benefit does not seem to be designed to stimulate tourism, because in the face of a small sum for the holidays of a family, there are too many uncertainties that make it an evanescent measure. Meanwhile, the methods of use of the tax credit by hoteliers are still uncertain, pending the provision of the Revenue Agency, then it is not automatic that hoteliers find availability at the banks to carry out the assignment of credits, and consequently it is not not even ensured that hoteliers eventually decide to apply the 80% discount.
The 2019 Budget Law had established incentives for companies in Southern Italy to invest in industrial research and experimental development in the scientific or technological field. The aforementioned tax credit is expanded up to 45% for small businesses, up to 35% for businesses with up to 50 employees and with a turnover of at least 10 million Euros, and up to 25% for large businesses with at least 250 employees and turnover in excess of 50 million Euros.
REVENUE AGENCY, VADEMECUM ON THE RELAUNCH DECREE >> DOWNLOAD PDF TEXT
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