COVID-19 | Clarifications on the suspension of terms provided by the Cura Italia decree for advance tax agreements and patent box

With the publication of circular No. 7/E of 27 March 2020, the Revenue Agency provides clarifications and operational indications on the handling of requests for advance tax agreement for enterprises with international activities as well as on the determination of the taxable income for the purposes of the patent box, concurrently with the COVID-19 epidemic. For operators wishing to initiate these procedures, it is possible to send the related requests electronically, using only the certified e-mail.

With the circular No. 7/E, the Revenue Agency takes up the innovations introduced by Art.67 of Decree-law No.18 of 17 March 2020 ("Cura Italia" decree) which orders the suspension from 8 March to 31 May of 2020 of the terms of articles 31-ter and 31-quater of Presidential Decree 600/1973 as well as of the rulings for the patent box pursuant to law 190/2014. The circular provides clarifications on the effects of the suspension deriving from Article 67 and operational indications on the continuation of the activities during the period of suspension.

The Decree suspends the terms provided for by the provisions governing: - advance tax agreements for enterprises with international activities; - the decrease in income adjustments in application of transfer pricing regulation; - the advance tax agreement procedure connected to the use of certain intangible assets (so-called “patent box”).

Therefore, for these procedures in progress on March 8, 2020, the terms are suspended until May 31 and will start again from June 1.

During the period of suspension, requests for prior agreement can be sent electronically only through the use of certified e-mail. The deadlines for the notification of replies by the Revenue Agency, as provided for by the relevant provisions, begin to run from 1 June 2020.

If a taxpayer has the exercise at the turn of the year, and the closure of the tax period occurs during the suspension period in question, it will be possible to obtain recognition of the effects of the unilateral or bilateral agreement referred to in article 31 – ter of the Presidential Decree n. 600 of 1973 for said closing tax period, even if the application was filed after the end of the year but in compliance with the suspension period provided for by the same article 67.

In relation to the patent box, similarly to the advance tax agreements, it is possible to submit the related requests exclusively electronically by using the certified e-mail of the Central, Regional or Provincial Directorate territorially competent by reason of the taxpayer's domicile.

For the related ruling procedures, the circular clarifies how the terms of the suspension provided by the “Cura Italia” decree also apply in the case of the 120-day deadline for presenting or supplementing the documentation relating to the application for initiating the procedure.

Moreover, the circular indicates how, despite the emergency period, application processing activities can continue, without renouncing the benefits of the suspension, following the completion of the procedure documents. The contradictory is managed remotely, with specific indications to protect the health of taxpayers and employees and without accessing the corporate offices.             

These emergency measures contained in the “Cura Italia” decree and resumed in circular No. 7/E, aim to achieve a balance between public health and economic interests, public and private, trying to encourage as much as possible the recovery of normal functioning of the procedures involved once the stalemate generated with the spread of the epidemic has ended.

Matteo Coppola  
Transfer Pricing Manager – Milano

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