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COVID-19 | Urgent measures for business, strategic sectors and justice

Further to President Giuseppe Conte and Minister of Economy and Finance Roberto Gualtieri proposal, the Council of Ministers has approved a Decree Law introducing urgent measures regarding access to credit and deferral of obligations for businesses, as well as special powers in legal and strategically important sectors.

The above mentioned Decree Law provides support to businesses in difficulty with specific measures in five main sectors.

In advance of the publication of the official text of the Decree, A summary of the measures adopted as presented to the press is provided below.

1. Access to credit, liquidity, export, internationalisation and investment support

State guarantees amounting to EUR 200 billion issued through the company SACE Simest in favour of banks providing companies with any kind of loans. Such a guarantee will cover the amount financed in a range between 70% and 90%, depending on the size of the company and it is subject to several conditions (the failure to distribute dividends for the following 12 months and the necessary allocation of the financing to support expenses for productive activities located in Italy).

The following coverage is provided:

  • 90% of the amount of financing required for companies with less than 5,000 employees in Italy and a turnover of less than 1.5 billion euros (simplified procedure);
  • 80% for companies with more than 5,000 employees and a turnover between 1.5 and 5 billion euros
  • 70% for companies with a turnover of more than 5 billion.

The amount of the guarantee may not exceed 25% of the turnover recorded in 2019 or twice the personnel costs incurred by the company;

30 billion are allocated to small and medium enterprises, including entrepreneurs and professionals (registered for VAT purposes). The access to the guarantee issued by SACE will be free of charge but subject to the condition that the categories mentioned above have exhausted their capacity to use the credit issued by the Central Guarantee Fund (i.e. Fondo Centrale di Garanzia) (which is further enhanced).

Moreover, a significant simplification of bureaucratic procedures for accessing the guarantees granted by the Fund is provided.

The Decree Law strengthens support to public export, in order to improve the incisiveness and timeliness of government intervention. The measure introduces a co-insurance system according to which the 90% of the commitments deriving from SACE's insurance activity are undertaken by the Government and the remaining 10% by the company itself, thus releasing up to a further 200 billion resources to be allocated to strengthen the export sector.

All the above will enable SACE to meet the increasing request for insuring operations deemed to be of strategic interest for national economy and that couldn’t have been financially covered by the company.

2.    Measures to ensure the continuity of companies

The Decree Law provides measures aimed at ensuring the continuity of companies in this emergency stage, with particular focus on those companies that were stable before the crisis and in a situation of business continuity. Both the rules of the financial statement preparation and the reasons for the dissolution of the company are taken into account. In addition to these measures aimed to protect the company there  is the suspension of the deferral of shareholders' loans, overshadowed by third-party creditors.

Additional measures are introduced to regulate bankruptcy in order to prevent companies from opening bankruptcy and other insolvency proceedings protecting them from the actions of creditors for the entire duration of the emergency.

3. Strengthening of special powers in areas of strategic importance and financial transparency obligations

In the current situation of epidemiological emergency, the approved regulations aim at strengthening the discipline of special powers in the sectors of strategic importance anticipating

with immediate effect - and pending the adoption of the implementing decree - the extension of the field of objective intervention of the golden power discipline to the sectors of strategic importance identified by the European Regulation n. 452/2019. This will enable to submit to prior authorisation relevant operations relating, inter alia, to the financial, credit and insurance sectors, crucial infrastructure and technologies, including energy, transport, water and health, food safety, access to sensitive information, including personal data, artificial intelligence, robotics, semiconductors, cybersecurity, as well as nanotechnology and biotechnology.

4. Tax and accounting measures

In addition to the provisions introduced by the Decree Law so-called "Cura Italia", urgent measures are taken to postpone tax and fiscal obligations for workers and companies. In particular, the suspension of VAT payments, withholding tax and social security contributions for April and May.

More in detail:

  • Suspension of VAT, withholdings and social security contributions for subjects with a
  • decrease in turnover of at least 33% in revenues/compensation under 50 million and at least 50% above this threshold;
  • in any case, these payments are suspended for individuals who started operating on 1st  April 2019;
  • for residents in the 5 provinces most affected (Bergamo, Brescia, Cremona, Lodi, Piacenza), suspension of VAT payments if turnover drops by  at least 33% regardless of the turnover threshold of 50 million;
  • recovery of payments in June, with the possibility of instalments in 5 tranches

The suspension of withholding tax on income from self-employment introduced by the Decree Law so-called "Cura Italia" is extended to deadlines in April and May.

The deadline for payments due on 20 March is extended to 16 April and the deadline for submitting the WHT returns (Certificazione Unica) has been extended from 31 March to 30 April.

In addition, a tax credit to the extent of 50% of the costs of sanitization of environments is extended to the purchase of personal protective equipment, masks and glasses.

Inps (national social welfare institution) is allowed to issue a simplified Pin, by means of telematic identification of the applicant and postponing verification with direct recognition at the end of the emergency.

Rules are introduced on "compassionate medicines" (medicines not yet authorized), which provide for the exclusion from the application of taxes in case of free transfer.

5. Further provisions

The decree law provides further measures aimed at postponing all procedural deadline for the hearings of civil and criminal proceedings in all judicial offices and aimed at suspending the expiration of the deadlines for the completion of any act in civil and criminal proceedings. The suspension also includes the terms for the notification proceedings at first instance before the tax commissions.

SOURCE: Council of Ministers press release no. 39 (6 April 2020)

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