The so-called liquidity decree, in following up on the ‘Cure Italy,’ allocates 400 billion euros in total to businesses and professionals. As well as introducing a series of measures to mitigate the impact of Covid-19 on the country’s economy. (1)
State guarantees for access to credit for businesses and professionals, support for export and internationalization, Golden Power, suspension of tax and contribution payments and deadlines for civil and criminal proceedings.
The amount is split into a series of measures aimed at facilitating and ensuring access to credit for said entities, as well as supporting export and internationalization and business continuity.
State-guaranteed loans
All companies based in Italy, until Dec. 31.20, can apply for financing in any form, with a term not exceeding 6 years, with the option of pre-amortization up to 24 months. Of the 200 billion made available by the state for loan guarantees, 30 billion is exclusively for SMEs, self-employed and self-employed VAT-registered professionals who have fully utilized their ability to access the Central Guarantee Fund.
The state guarantee-explicit, unconditional and irrevocable-is issued by Dec. 31, 20, through SACE S.p.A., an investee company of Cassa Depositi e Prestiti. Covers all financing granted to the enterprise following the enactment of the decree. For principal, interest and incidental charges, up to the maximum guaranteed amount.
However, guarantees are excluded for firms registered as distressed, as of 12/31/19, as well as for impaired exposures.
Guarantee coverage, which varies between 70 and 90 percent, is broken down as follows:
– 90 percent of the loan amount requested from companies <5,000 employees in Italy and turnover <1.5 billion. By simplified procedure,
– 80% for companies with >5,000 employees and turnover in the € 1.5-5 billion range,
– 70% for enterprises with turnover above 5 billion.
The direct guarantee also receives maximum coverage (90 percent) in the case of financial transactions with a duration of up to 72 months, provided that the total amount of transactions does not exceed the ceiling set in the liquidity decree.
Constraints. The financing covered by the state guarantee is tied to purposes of allocation to personnel costs, investments and working capital on production plants and business activities located in Italy.
SME Fund
SMEs (<500 employees), the self-employed and freelancers who are VAT-registered – following the exhaustion of resources allocated to them by the SME Central Guarantee Fund – can also access coverage through SACE. The procedure for accessing the Fund is facilitated, as a temporary exception to some existing provisions. Thus, until 31.12.20:
– SME guarantee is granted free of charge,
– the maximum guaranteed amount for each enterprise is raised to 5 million euros.
The SME Fund is allocated €1.729 billion for the year 2020. Added to this is 100 million euros made available to ISMEA to cover guarantees provided to the agricultural sector.
Other measures
A miscellany of forecasts is then added, ranging in the various areas of:
- support for the export of Italian products and the internationalization of enterprises (see next paragraph),
- Tax and tax compliance , judicial and administrative proceedings. Suspensions and extensions of terms,
Golden Power
. Extension of state prerogatives on mergers and acquisitions of enterprises operating in sectors of strategic importance.
Export and internationalization
The insurances and guarantees so far offered by SACE – Foreign Trade Insurance Services – to promote theexport of Italian products and the internationalization of enterprises are strengthened as follows:
– State intervention on each commitment. To the substantial extent of 90 percent, on principal and interest, leaving SACE with the remaining 10 percent share and no solidarity bond,
– derogation from the previous provisions on insurance and guarantee on risks other than market risks.
Committee on public financial support for export
The Committee for Public Financial Support for Export is established at the Ministry of Economy and Finance (MEF). Among the functions entrusted to it are:
– evaluation on the operations to be secured or subject to prior authorization by the MEF,
– Examination of transactions that may result in high concentration risks,
– Report to the government on financial risks, management procedures, programmatic proposals.
Tax compliance
Tax payments (VAT and other self-assessment payments) due in April and May 2020 are suspended in favor of certain enterprises and individuals engaged in the arts or professions, with tax domicile or registered office or place of business in Italy, upon the occurrence of the following conditions:
– reduction >33% of turnover or fees (in March and April 2020 compared with the same months of 2019), in case of revenues or fees <50 million in the previous tax period, i.e.
– decrease >50% in turnover or fees (in March and April 2020, compared to the same months in 2019), for individuals with revenues or fees >50 million.
The suspension also applies to those who undertook the activity after 3/31/19.
Social security and welfare contributions
Social security and welfare contributions and premiums related to compulsory insurance are likewise suspended.
The suspension also applies to noncommercial entities carrying out institutional activities of general interest outside the business regime.
Suspended payments must still be paid by 6/30/20. Payment can be made by that date, without applying penalties and interest, in one lump sum. That is, by installment, up to a maximum of 5 equal monthly installments, starting from June 2020.
Withholding tax. Individuals with tax domicile (i.e., registered or operating office) in Italy and revenue or compensation <400 thousand euros in the tax period prior to the current one as of 3/17/20 are not subject to withholding tax for income and compensation received between 3/17/20 and 5/31/20, provided that they have not incurred expenses for employee or assimilated labor services in the previous months.
2020 Unified Certification, remote tax assistance, DURF
Unified Certification 2020.The deadline for the electronic submission of the Unified Certification to the Internal Revenue Service is extended to 4/30/20.
Remote tax assistance. The possibility of telematic submission of the 730 tax return referring to the 2019 tax period is provided.
Procurement and DURF. The validity of fiscal regularity documents (Durf) issued in February 2020 is extended until 6/30/20.
Protective and safety equipment, sanitation
An additional tax credit in the amount of 50 percent of expenses incurred until Dec. 31.20 is established for:
– Purchase of personal protective equipment (e.g., surgical masks, FFP2 and FFP3, gloves, protective visors and goggles, protective coveralls and footwear) and safety equipment for the workplace,
– Sanitization activities of working environments and tools for the purpose of prevention from COVID-19 infection. (2)
The maximum amount that can be given to each beneficiary is €20,000, within a total availability ceiling of €50 million.
First home bonus
The requirements necessary for the use of the so-called ‘first home bonus’ are relaxed. By suspending, for the period from 23.2.20 to 31.12.20, certain preconditions already established under penalty of forfeiture:
– Moving residence within 18 months,
– repurchase within one year if sold before 5 years from the first purchase.
Justice, administrative acts and procedures
Justice. All court deadlines slip from 4/15/20 to May 11.
Administrative acts and procedures. With regard to expiring administrative acts and proceedings, the deadline of April 15, 2020 was extended to May 15, 2020.
Golden power
Golden power – a regulatory shield designed to maintain control over even partial takeovers of Italian companies by foreign companies and investors – is being extended to additional economic sectors than hitherto. (3) To enable the government to exercise special prerogatives of market intervention. In relation to companies, both public and private, that carry out activities of strategic importance.
The areas affected by the government’s exercise of these special powers:
- defense, national security, transportation, energy and communications (since 2012),
- Broadband electronic telecommunication networks with 5G technology (from 2019),
- food and health, insurance and finance (with the ‘liquidity decree,’ DL 8.4.20 No. 23).
This measure aims to safeguard Italian companies against the risk that investors may take advantage of the current vulnerability of Italian companies, which are particularly affected by the effects of the spread of COVID-19, by making proposals to buy or sell off business units.
Selena Travaglio and Dario Dongo
Notes
(1) Liquidity Decree. DL 8.4.20 no. 23. Urgent measures on access to credit and tax compliance for businesses, special powers in strategic sectors, as well as health and labor interventions, extension of administrative and procedural deadlines. In OJ General Series no. 94, 8.4.20 https://www.gazzettaufficiale.it/eli/id/2020/04/08/20G00043/s)
(2)
Protocol 14.3.20 for the containment of Covid-19 in the workplace.
. V. https://www.greatitalianfoodtrade.it/sicurezza/coronavirus-misure-di-contenimento-negli-ambienti-di-lavoro-protocollo-14-3-20
Workers’ safety and employers’ responsibility.
SEE https://www.greatitalianfoodtrade .it/sicurezza/covid-19-sicurezza-dei-lavoratori-e-responsabilità
FFP2, FFP3 (N95) masks and respirators, insights.
SEE https://www.greatitalianfoodtrade .it/salute/covid-19-mascherine-chirurgiche-e-respiratori-ffp3-n95-e-ffp2-approfondimento
(3)
Golden Power
. D.L. 15.3.12 no. 21, converted into law 11.5.12 no. 56 (as amended), reg. EU 2019/452. V. http://www.governo.it/it/dipartimenti/dip-il-coordinamento-amministrativo/dica-att-goldenpower/9296
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Lawyer, specializing in intellectual property rights. LL.M. in agri-food law.
