Italy: Government Decrees Further Measures to Fight the Covid-19 Pandemic

(Dec. 30, 2020) On November 30, 2020, Italy’s government issued Decree-Law No. 157, which includes further measures to tackle the Covid-19 pandemic.

Extension of Terms for the Payment of Certain Taxes

The new legislation extends, until December 10, 2020, the term for the payment of income taxes and IRAP (a regional tax for productive activities) affecting entrepreneurs or other individuals domiciled or registered in Italy who carry out business, art, or professional activities. (D.L. No. 157, art. 1(1).)

The legislation also extends the term for the payment of income taxes and IRAP until April 2021 for taxpayers with revenues or fees not exceeding €50 million (about US$60.5 million) in the tax period prior to the one in progress at the date the new legislation enters into force, and who have suffered a decrease in revenues or fees by at least 33 percent in the first half of the year 2020 compared to the same period of the previous year. (D.L. No. 157, arts. 1(3), 2(1).)

Taxpayers carrying out business, art, or professional activities in economic sectors that have undergone challenges of a “maximum severity,” and who are exposed to high levels of risk as defined by the applicable regulations, are exempt from the minimum requirements to benefit from the extension of tax terms. (D.L. No. 157, art. 1(4).)

Other designated taxpayers affected by similar adverse situations are also granted extensions for the payment of withholding taxes, value added tax (VAT), and social security and welfare contributions. (D.L. No. 157, art. 2(1)(a)—(c).)

Emergency Compensation for Workers

A monetary allowance of €1,000 euros (about US$1,210) is created for seasonal employees in the tourism and thermal sectors and for administrative workers in companies operating in the tourism and spas sectors who have been involuntarily dismissed from employment between January 2019 and November 2020. (D.L. No. 157, art. 9(2).)

The same allowance is granted to workers—whether dependent or self-employed—other than those described above who, as a result of the epidemiological emergency from COVID-19, have ceased, reduced or suspended their activities or employment relationships, in particular, seasonal dependent workers, intermittent workers, autonomous workers, and several categories of gig workers. (D.L. No. 157, art. 9(3).)

Additionally, significant funds are allocated for national organizations in the sports sector who, as a consequence of the epidemiological emergency from COVID-19, have ceased, reduced or suspended their work activities. (D.L. No. 157, art. 11(1).)

Additional Measures to Tackle the Financial Crisis

The legislation postpones to March 31, 2021, the supplementary elections for the seats of the Chamber of Deputies and the Senate that, under current legislation, have been declared vacant as of December 31, 2020. (D.L. No. 157, art. 14(1).)

The legislation increases the budget of the Single Fund for the Support of Sports Associations and Amateur Sports Clubs for year 2020 by €92 million (about US$112.6 million). (D.L. No. 157, art. 10(1).)

Fresh funds are appropriated for the police at both the national and local levels in order to guarantee the financing and effectiveness of public safety measures aimed at containing the spread of the COVID-19 contagion until December 31, 2020, and also to finance the carrying out of major tasks connected with the ongoing epidemiological emergency. (D.L. No. 157, art. 20(1).)

Finally, for year 2021, the legislation also allocates additional monies to the Equalization Fund (Fondo Perequativo)—within the Ministry of Economy and Finance—in an amount of €5,300 million (about US$6.42 billion) for the balancing of the deficit generated by recent tax and relief legislation benefitting individuals who have received total or partial exemption from tax and social security payments. (D.L. No. 157, art. 23(1).)

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