As the COVID-19 outbreak continues to create deep concerns on its impact on the health of citizens and disruption to businesses, the Italian Government has reacted with a new package of tax measures reflected in two decrees already issued and another one published today in the Italian Official Gazette that will be further commented in a separate Alert.
New measures on tax collection activity
On 20 October 2020 the Italian Government approved the Law Decree No. 129 (“Collection Decree“) which, once again, intervenes on measures on suspension of tax collection activities which were already subject to law intervention back in April, July and October 2020.
The Collection Decree comes into effect as of 21 October 2020 but must be converted into law within 60 days. Therefore, some amendments may intervene.
According to the new measures:
Article 1 of the Collection Decree – Measures concerning tax collection activities
- the deadlines for paying tax amounts indicated in (i) notice of payments issued by the Collector Agent, (ii) tax assessments issued by the Italian Revenue Agency, customs authorities and local authorities that are immediately effective, (iii) debit notices issued by social security institutions, and (iv) injunctions of the local authorities, expiring between 8 March 2020 and 31 December, are automatically suspended and shall be made in full by 31 January 2021. For taxpayers having their fiscal domicile, legal seat or place of business in Bertonico, Casalpusterlengo, Castelgerundo, Castiglione d’Adda, Codogno, Fombio, Maleo, San Fiorano, Somaglia, Terranova dei Passerini and Vo’ reference should be made to the same payments expiring between 21 February 2020 and 31 December 2020;
- taxpayers admitted to pay their pending debts in installments (i) based on installment plans in place as at 8 March 2020 (for taxpayers having their fiscal domicile, legal seat or place of business in Bertonico, Casalpusterlengo, Castelgerundo, Castiglione d’Adda, Codogno, Fombio, Maleo, San Fiorano, Somaglia, Terranova dei Passerini and Vo’ reference should be made to 21 February 2020) or (ii) based on notices for admission to installment plans issued by the collector agents vis-à-vis taxpayer requests filed by 31 December 2020 lose the benefit of admission to payment by installments in case of omitted payments of 10 installments (even non-sequentially);
- for tax debts communicated by the Revenue Agency to the Collector Agent between 8 march 2020 and 31 December 2020 (for taxpayers having their fiscal domicile, legal seat or place of business in Bertonico, Casalpusterlengo, Castelgerundo, Castiglione d’Adda, Codogno, Fombio, Maleo, San Fiorano, Somaglia, Terranova dei Passerini and Vo’ reference should be made to the time frame between 21 February 2020 and 31 December 2020):
- if the Collector Agent serve taxpayers with tax collection notice after 21 months from the communication of the tax debt received by the Revenue Agency and taxpayers do not pay such debts, the same Collector Agent will remain the sole responsible for the debt vis-à-vis the Revenue Agency;
- statute of limitation for the Collector Agent to serve taxpayers with tax collection notice, expiring on 31 December 2020 or on 31 December 2021, is automatically postponed until 31 December 2022. Such automatic postponement does not apply to tax collection notice related to the following:
- higher taxes challenged after the automatic inspections of the 2017 VAT and CIT returns, pursuant to Articles 36-bis of the Presidential Decree 600/73 and Article 54-bis of the Presidential Decree 633/72;
- amounts of severance indemnity or income from retirement resulting from the withholding tax form (so-called 770 Model) filed by withholding agents for FY 2016;
- higher taxes challenged after the formal inspections of the 2016 and 2017 CIT returns, pursuant to Articles 36-ter of the Presidential Decree 600/73.
Tax collection notice listed under letters i), ii) and iii) must be served to the taxpayer within 31 December 2022.
- provisioning obligations arising from third parties seizures, carried out by the Collector Agent or subject entitled to the assessment and collection of taxes on salaries, pensions and similar treatments (such as employer and pension funds), are suspended between 19 May 2020 and 31 December 2020. Therefore, salaries, pensions and similar treatments must be paid even in case an award order of the executing judge occurred before 19 May 2020.
New measures on tax litigation activity
On 28 October 2020 the Law Decree No. 137 (“Reliefs Decree“) has been approved with the aim of supporting companies and individuals, with tax incentives and measures concerning tax litigation activities, deadlines for filing up specific tax returns and making specific payments. The measures concerning litigation activities, tax fulfillments and payments shall be coordinated with the provisions already included in the previous law intervention back in July 2020.
The Reliefs Decree comes into effect as of 29 October 2020 but must be converted into law within 60 days. Therefore, some amendments may intervene.
According to the new measures:
Article 10 of the Reliefs Decree – Postponement of the deadline for the submission of 770 Model
The deadline for filing of the withholding tax reporting form (so-called 770 Model) for FY 2019 has been postponed to 10 December 2020, instead of 31 October 2020.
Article 13 of the Reliefs Decree – Suspension of social security contribution and premium for mandatory insurance payments for employees of business subject to the new restrictive measures
For taxpayers having their place of business in the Italian territory and carrying out activities falling within the sectors most affected by the epidemiological emergency (and detailed in the specific list provided by the Decree of the President of the Council of Ministers dated 24 October 2020, such as tourism, sport, art and culture, catering, transportation, etc.), the following payments are automatically suspended:
- social security contribution due for the month of November 2020;
- premium for mandatory insurance due for the month of November 2020
Such payments are postponed to 16 March 2021, without the application of interests and penalties, or in four installments expiring on 16 March, 16 April, 16 May and 16 June 2021. The benefit of payment by installment will be lost in the event of omitted payment of at least two installments — even non-sequentially.
Article 27 of the Reliefs Decree – Urgent measures for managing tax litigation proceedings
New special rules for managing tax litigation proceedings during the COVID-19 outbreak have been introduced. The following rules remain valid as long as the state of emergency and the relevant precautionary measures have effect.
Specifically, the authority has been given to the president of the competent tax court (depending on the level of the litigation, i.e., first or second level tax court) to decide if the hearing (both public and hearings in chambers) has to take place remotely, provided that tax courts have access to the necessary computer equipment and on condition that necessary technical and financial resources are available. The decision has to be taken through a Presidential Decree to be served to the parties at least five days before the hearing’s date and detailed instructions on how to participate in the remote hearings shall be provided at least three days before the hearing’s date.
As an alternative to the remote hearing, the president of the regional or provincial tax court can cancel public hearings and rule the case based only on the briefs already filed by the parties. In such a case, both parties can serve the counterpart with a request for the discussion of the hearing and file the same request before the competent tax court no later than two days before the hearing’s date. If a request for discussion is filed and the hearing cannot be held remotely, the court will inform the parties about the possibility to file the final brief no later than 10 days before the hearing’s date and to reply to the final brief no later than five days before the hearing’s date. The hearing’s date can be postponed in order to comply with the previous provisions.
It is still possible for the parties to file a request for the hearings to be held remotely together with their appeal briefs (i.e., the main or secondary appeal) or first defensive briefs (such as counter-brief or counterappeal), based on Article 135 of the Law Decree 19 May 2020, No. 34, converted into Law 17 July 2020, No. 77 (“Relaunch Decree“) and the general provision on tax litigation proceedings.