The so-called ‘relaunch decree’, after a long gestation, has finally landed in the Official Gazette. (1) Focus on the main measures to support businesses and those aimed at agribusiness operators, for at least partial compensation for losses incurred due to the Covid-19 health emergency.
Relaunch decree, brief introduction
The revitalization decree, DL 19.5.20 no. 34, consists of 266 articles and 7 annexes. Its extensive scope is divided into 9 Titles:
– health and safety (Title I),
– business and economic support (II),
– workers (III),
– disability and family (IV),
– Territorial entities and commercial debts of territorial entities (V),
– fiscal measures (VI),
– Protection of savings in the credit sector (VII),
– sector measures (VIII),
– further provisions (IX).
BUSINESS SUPPORT (Title II)
Enterprise support includes a number of interventions, in line with the European Commission Communication 19.3.20 ‘Temporary Framework for State Aid Measures to Support the Economy in the Current COVID-19 Emergency‘. Brief notes to follow.
IRAP payments, facilities for entities with 2019 revenues <250 million (with various exceptions for insurance companies, etc. Art. 24). The payment of the balance of the regional business tax for the tax period in progress as of 12/31/19 is not due (subject to the payment of the advance for the same tax period). Nor is the payment of the first installment of IRAP advance payment for the tax period after Dec. 31, 19 due.
Non-repayable grants to those engaged in business, self-employment and agrarian income (with 2019 revenues <5 million), holders of VAT registration (Art. 25). Provided that turnover in April 2020 is <66.6 percent compared to April 2019. As well as regardless of this condition for activities started after 1.1.19 or located in ‘red zone’ areas as of 31.1.20. The contribution is equal to a share of the difference between April 2020 and April 2019 turnover. This share varies from 20% (in case of 2019 revenues <400 thousand euros), 15% (revenues <1 million euros), 10% (revenues <5 million euros). In any case due, in a minimum amount of 1000 euros for individuals, 2000 for other entities. Telematic application to be submitted to the Internal Revenue Service within 60 days from the start date of the procedure.
Tax credit for non-housing property rentals and business rentals (Art. 28). For enterprises, professionals and noncommercial entities (including third sector entities) with revenues or compensation <5 million in 2019 (and regardless of the volume of business, for hotels and agrotourism), the credit is 60 percent on rentals, leases or concessions of real estate for nonresidential use intended for industrial, commercial, artisanal, agricultural, and tourism-related activities. Or to the habitual and professional pursuit of self-employment. In the case of complex performance service contracts or business leases–including at least one building for nonresidential use intended for the performance of the aforementioned activities–the credit is 30 percent of the fees. The facility is valid for the months of March, April and May 2020 (April, May, June for tourist accommodation facilities with only seasonal activity). (2)
Work environment retrofitting, tax credit
The adoption of measures related to the need to adapt production processes and work environments to the standards of containment of new coronavirus infection is supported and incentivized through a tax credit equal to 60 percent of the expenses incurred in 2020, up to a maximum of 80 thousand euros work (3,4,5).
The measure applies to entities engaged in business, art or profession in places open to the public, associations, foundations and other private entities, including those in the Third Sector’ (Article 120, Annex 1).
The interventions include construction activities needed to redo locker rooms and canteens, build medical spaces, entrances and common areas. Purchase of safety furniture and ‘investment in innovative activities, including those necessary for (…) development or purchase of tools and technologies necessary for the performance of work and for the purchase of equipment for temperature control of employees and users.’
The tax credit can be combined with other benefits for the same expenses, up to the limit of the costs incurred, and can be used for offsetting in 2021 (Art. 120).
Other state measures
Electricity bills, reduction of charges (Article 30). ARERA (Regulatory Authority for Energy Networks and Environment) – for the months of May, June, July 2020 – provides for the reduction of the expenditure incurred by electric utilities connected to low voltage other than domestic uses, with reference to the items of the bill identified as ‘transport and meter management’ and ‘general system charges’, within an expenditure ceiling of 600 million euros.
Capital strengthening of medium-sized enterprises (turnover >5 million. Art. 26).
Fund for the preservation of employment levels and the continuation of the business of enterprises holding historical brands of national interest and corporations with >250 employees (Art. 43).
Assets earmarked at Cassa Depositi e Prestiti SpA for non-banking, financial and insurance companies with turnover >50 million euros (Art. 27).
Regional and autonomous provinces aid
Regions and Autonomous Provinces – including through promotion of coordinated initiatives with the Conference of Regions and Autonomous Provinces, other territorial authorities, and Chambers of Commerce – may adopt additional aid, from their own resources. Such aid is subject to green light from the European Commission and can come in the form of:
– Direct subsidies (including for wage payments, within 80 percent of wages and for 12 months),
– tax and payment facilities,
– other instruments (e.g., repayable advances, loan guarantees, loans, and equity investments).
In any case, the aforementioned aid is subject to a limit per beneficiary, which must be calculated ‘taking into account any other aid, from whatever source, even if granted by different entities.’ The thresholds are:
– 100 thousand euros for each enterprise active in primary agricultural production,
– 120 thousand euros for each fishing and aquaculture enterprise,
– 800 thousand euros for other enterprises (Articles 54-65).
MEASURES FOR AGRICULTURE, FISHING AND AQUACULTURE (Title VIII, Chapter VI)
Emergency fund to protect supply chains in crisis
The ‘Emergency Fund protecting supply chains in crisis‘ is established at MiPAAF, with an allocation of € 500 million for 2020, in order to implement ‘Restorative interventions for damages suffered by the agricultural, fishing and aquaculture sector.‘ According to procedures to be defined within 20 days by special decrees of the Minister of Agriculture, Food and Forestry, in agreement with the State-Regions Conference (Art. 222).
The wine sector is allocated € 100 million of the prefect fund, for 2020. For the support of wineries that commit to the voluntary reduction of grape production for wines with designation of origin and geographical indication through the practice of ‘partial green harvesting’ to be carried out in the current marketing year. The reduction in production of grapes for winemaking must be at least 15 percent of the average value of the quantities produced in the last 5 years, excluding campaigns with maximum and minimum production. Based on data from harvest and production declarations, to be compared with those for the 2020/21 harvest year referred to in telematics register (Art. 223).
Advances on CAP (Common Agricultural Policy) subsidies-at the rate of 70 percent-are provided for enterprises that due to measures to contain the Covid-19 contagion could not fill out applications in time, even under the simplified scheme provided on an exceptional basis. Referring, in such cases, to the value of the 2019 securities portfolio. Advances are also granted to those who have submitted the ordinary application for support under the CAP 2020 scheme.
In the dairy sector, the agronomic use of raw materials, including pure whey, is equated with the regulatory use of livestock manure.
Hydroponics and aquaponics crops must come under a specific commodity classification–within 90 days, by Istat– ‘for thepurpose of ATECO code assignment.’
The business continuity of agricultural enterprises is ensured by granting them the right to renegotiate loans and other financing- granted before 1.3.20 by banks and other entities authorized to exercise credit- ‘intended to meet the needs of running or improving production facilities.’ ‘Taking into account the economic and financial needs of agricultural enterprises and ensuring improved conditions‘ on amortization schedules and interest rates. Renegotiation transactions are exempt from application fees, taxes and any other charges borne by enterprises (Art. 224).
Loans to reclamation consortia. Cassa Depositi e Prestiti or other qualified financial institutions may provide loans to land reclamation consortia to carry out their institutional tasks, with the exclusion of hiring personnel, for a maximum total amount of € 500 million, with principal to be repaid in equal annual installments over 5 years. Interest borne by the state, up to an overall limit of € 10 million/year (Art. 225).
Emergency Food Fund
The ‘emergency food fund‘ is established to complement COVID-19 emergency food distribution initiatives. An appropriation of € 250 million is dedicated to this fund, which is in addition to the European Aid for the Needy Fund. (4) The Agricultural Disbursement Agency shall disburse the relevant resources (Art. 226).
Dario Dongo
Notes
(1) Decree-Law 19.5.20, no. 34. Urgent measures on health, labor and economic support, and social policies related to the epidemiological emergency from COVID-19. (20G00052) In Official Gazette General Series 19.5.20 no. 128
(2) Dario Dongo, Francesca Agostini. Coronavirus, contracts and concessions, vending machines. Few solutions in Cure Italy and liquidity decree. FARE(Food & Agriculture Requirements). 5.5.20, https://www.foodagriculturerequirements.com/archivio-notizie/coronavirus-contratti-e-concessioni-distributori-automatici-poche-soluzioni-in-cura-italia-e-decreto-liquidità
(3) Dario Dongo. Phase 2, Guideline Conference Regions for the reopening of activities. Penalties and controls. GIFT (Great Italian Food Trade). 18.5.20, https://www.greatitalianfoodtrade.it/sicurezza/fase-2-linee-d-indirizzo-conferenza-regioni-per-la-riapertura-delle-attività-sanzioni-e-controlli
(4) Amaranta Traversa, Sarah Lanzilli, Claudio Biglia, Dario Dongo.
Covid-19 and occupational safety, Protocol 24.4.20.
GIFT(Great Italian Food Trade). 1.5.20, https://www.greatitalianfoodtrade.it/sicurezza/covid-19-e-sicurezza-sul-lavoro-protocollo-24-4-20-l-abc
(5) Dario Dongo, Andrea Gazzetta, Fabrizio De Stefani. Covid-19 and food safety, preventive and corrective actions. GIFT(Great Italian Food Trade). 6.5.20, https://www.greatitalianfoodtrade.it/sicurezza/covid-19-e-sicurezza-alimentare-azioni-preventive-e-correttive
(6) European Aid for the Needy Fund (FEAD) 2014/2020, established by reg. EU 223/2014. Law 7.8.12 no. 34, Article 58.1
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
