On 30 January 2020, the World Health Organization (WHO) declared the coronavirus epidemic in China a public health emergency of international impact. The following day, the Italian Government, following the first precautionary measures taken as from 22 January, and considering the particularly widespread nature of the epidemic, declared a state of emergency and implemented the first measures to contain contagion throughout the country. These are some of the initiatives it has launched during the past few weeks:

Suspension of residential mortgages: As a result of the emergency, the operation of the Gasparrini fund has also been extended to employees with reduced or suspended working hours for a period of at least 30 days and to self-employed workers and professionals whose turnover has fallen by more than 33 % compared to the last quarter of 2019.

In addition, for all cases of access to the fund, the presentation of the Equivalent Economic Status Indicator (ISEE) is no longer required. This assistance is also available to those who have already benefited from the benefit in the past (provided that repayment is resumed after three months). It has been established that the fund will support 50% of the interest accrued during the suspension period.

Benefits for companies that want to produce medical and personal protection equipment. #CuraItalia Incentives is the measure that supports the production and supply of medical devices and personal protective equipment (PPE) for the containment and fight against the epidemiological emergency COVID-19. A total of 50 million euros to support Italian companies that expand or convert their business into the production of masks, goggles, safety suits… The incentives are available to companies of all sizes located throughout Italy, which must carry out an investment programme worth between EUR 200,000 and EUR 2 million, with up to 75% provided through a zero-rate loan. Invitalia, the Development Agency which manages the incentives, is implementing the program on behalf of the Extraordinary Commissioner for Emergency Situations, Domenico Arcuri, who opened the application process on 26 March and ensures a fair assessment process.

Suspension of taxes and social security contributions. With the decree law #CuraItalia, the Government has introduced a series of regulations that provide a total allocation of 2.4 billion euros to suspend taxes and contributions. These provide for the postponement of deadlines and the suspension of payments of taxes and contributions (for all small businesses and with no turnover limit for companies operating in the sectors most affected), the collection and forwarding of tax records, assessment and payments due under the various tax amnesty measures. In addition, the decree provides for a tax credit for the tenant engaged in commercial activities who waives part of the March rent. The contribution of the private sector to the financing of the fight against the epidemic and health care has been encouraged through the extension of deductions.

More credit and cash flow for companies. SMEs, professionals and one-person businesses benefit from a moratorium on a total loan volume estimated at around 220 billion euros. Credit lines on current accounts, loans for security advances, short-term loan and instalment payments are frozen until 30 September. 1.5 billion has also been implemented in the Central Guarantee Fund for SMEs, which also includes the renegotiation of existing loans.

The aim is to enable the Fund to guarantee companies more than 100 billion in total funding. The Fund’s own guarantee is 80 % of the amount (and 90 % in the case of reinsurance by Confidi) for all loans up to EUR 1.5 million. On top of this amount (without prejudice to the possibility of continuing to cover up to 80 % and up to 2.5 million under the above rules), the guarantee rate is modulated in accordance with the Fund’s ordinary rules, with the possibility of obtaining an 80 % guarantee (up to 5 million) for all loans which fall within the areas of activity also covered by the special sections.

“Cassa integrazione ordinaria, assegno ordinario e cassa integrazione in deroga”. To strengthen the entire social security system (redundancy fund and wage supplement fund) for the entire national territory and for all productive sectors, including activities with fewer than five employees. With a total allocation of 4 billion euros, this fund fund is extended to the entire national territory, to all employees, in all productive sectors. Employers, even companies with less than 5 employees, who suspend or reduce their activities as a result of the epidemiological emergency can make use of the redundancy fund in derogation with the new COVID-19 cause for a maximum duration of 9 weeks. This possibility is also extended to companies that already benefit from the extraordinary redundancy fund. In the Wage Supplement Fund, which normally covers companies with 5 to 50 employees, it will be possible to take the ordinary allowance in derogation from 5 to 15 employees with the introduction of an exemption from the draft limit.

These days the government is discussing the possibility of approving a new decree called “Rilancio” which provides for a working capital of some 55 billion euros. The main points are:

  • Aid to families in financial difficulty: Emergency income will be paid in two instalments and applications must be submitted to INPS before June. The article provides: “Households in economic need as a result of the Covid-19 epidemiological emergency, and ‘recognized an extraordinary income support called Emergency Income (hereinafter “REM”). Applications for REM may be submitted until the June 2020 deadline and the benefit will be paid in two instalments, each of which is equivalent to the amount mentioned in paragraph 5′ (EUR 400 and 800)’. The REM is not available to “persons who are in a state of imprisonment, for the duration of the sentence, as well as those who are hospitalized in long-term care or other residential facilities at the expense of the State or other public administration”.
  • Credits up to 60% of rents: To contain the negative effects of prevention and containment measures related to the COVID-19 emergency, companies “with revenues or fees not exceeding 5 million euros” that “have suffered a decrease in turnover or fees in April 2020 of at least 50%” are entitled to a tax credit of up to 60% of the rent. In the case of hotels, on the other hand, the credit is granted “irrespective of turnover in the previous tax period”.
  • Cheaper electricity bills for three months (April, May and June) for SMEs.
  • Tax credit for holidays: Holiday tax credit up to EUR 500. The rule, entitled “Measures for the promotion of tourism in Italy – Holiday tax credit”, provides that “for the tax period 2020 and ‘recognized a credit in favor of households with an ISEE income not exceeding 35,000 for payment of services offered nationally by tourist accommodation companies. The credit can be used, from July 1 to December 31, 2020, by a single member of each family unit up to a maximum of 500 euros per family. The measure of the credit is 300 euros for family units consisting of two persons and 150 euros for those consisting of one person. The credit is available at 90% in the form of a discount on the amount owed, anticipated by the suppliers with whom the expense was incurred, and at 10% in the form of a tax deduction at the time of the tax return by the person entitled to receive it”.

The Coronavirus crisis is causing businesses to face huge challenges and, in this context, reliable and up-to-date information is essential. At AUXADI, we are experts in providing accounts, tax compliance and international payroll management to our clients. If you would like us to expand on the above information, please do not hesitate in getting in touch with us.

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Guido D´Antonio

Guido D´Antonio
International Desk

All information contained in this publication is up to date on 2020. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.