The following is a selection and summary of the provisions which we deem of interest for our clients, as per D.L. n. 23 of April 8, 2020 (so called Decreto Liquidità), enacted by the Italian Government with the purpose of supporting businesses continuity and the Italian economic system, put at risk by the pandemic and the consequent lockdown.
Each measure shall have the duration specifically stated therein (some up to December 31, 2020).
To the extent possible, this summary includes also some subsequent official clarifications/ applications.
Moreover, Prime Minister Decree (DPCM) of 26 April 2020 enlarged the list of business activities allowed to operate from May 4, 2020 (from April 27 activities preparing such openings are also authorized); under EMPLOYMENT you will find some relevant information in this respect.
Upon request, we are available to provide more detailed information and to assist in applying those measures.
Contents
EMPLOYMENT
FINANCIAL SUPPORT TO BUSINESSES
BUSINESS CONTINUITY
CONTROL OF ACQUISITIONS
DELAY OF PROCEDURAL TERMS AND HEARINGS
EXTENSION OF TERMS IN TAX MATTERS AND OTHER TAX PROVISIONS
EMPLOYMENT
Admission to ordinary and special CIG (section 41 – confirmation and enhancement of section 19 and following of DL 18/2020)
The ordinary Wage Supplement Fund (CIG) and the Special Wage Supplement Fund (CIG in deroga) are extended to employees hired from February 24, 2020 to March 17, 2020.
New Work Safety and Health Protocols
All business activities whose operations are allowed (including those recently authorized pursuant to DPCM 26.04.2020) are subject to the general obligation of assuring workers’ safety and health provided for by general law 81/2008, as specifically adapted to the pandemic situation by the new Protocol agreed upon between the Government and the employers/employees associations on April 24, 2020 as well as, for the construction sites the specific Protocol of April 24, 2020 and for transportation and logistics the Protocol of March 20, 2020.
Failure to comply with those protective measures would cause the closing of the operations as well as, in case of personal damages to the employees, civil and criminal liability for the employer.
FINANCIAL SUPPORT TO BUSINESSES
Support to small and medium size businesses – PMI Fund (section 13)
The existing PMI Fund (State guaranteed loans), already enlarged by previous emergency provisions, up to December 31,2020, is made accessible also to enterprises with up to 499 employees and to professionals and is available for a maximum guaranteed amount of Euro 5 million for each enterprise; with no preliminary evaluation of the beneficiary standing ( only requirements checked) and at no guarantee cost.
Main requirements and conditions to access this financing (loan) are the following[1]:
| Revenues of the beneficiary (limit) |
Duration of the financing |
Interest- only period |
Maximum amount financed |
Direct guarantee amount |
Counter-guarantee amount |
Evaluation of the beneficiary |
| No limit |
Up to 72 months |
At least 24 months |
25% of revenues (as per last b/s or last tax return) within the amount of Euro 25,000.00 |
100% |
|
None |
| Up to Euro 3,200,000.00 |
|
|
25% of revenues within the amount of Euro 800,000.00 |
90% (100% with CONFIDI counter-guarantee) |
|
None |
| None |
Up to 72 months |
|
Either one of the following:
* 200% of the personnel cost of the last FY
* 25% of last FY turnover
*working capital and investment needed for carrying out the business over the subsequent 18 /12 months |
90% |
100% |
None |
Under certain conditions the guarantee is granted also to beneficiaries being in default under other financing positions or having in place insolvency procedures such as, by way of example, a “concordato” with continuation of the business.
The guarantee applies to new financing; however, an already existing loan may be extinguished by the new guaranteed one, provided that as a result the amount of credit allowed by the concerned bank is higher than the previous one.
General support through SACE guarantee to enterprises (section 1)
Another set of guarantees up to an amount of 200 billion Euro is granted up to December 31, 2020 by SACE spa, a State controlled financial company.
These SACE guarantees are aimed to support the financing of all enterprises (including small and medium size enterprises and professionals, to the extent they exhausted already the PMI Fund provisions) with registered office in Italy, irrespective of their field of activity, except for bank and other financial institutions.
These guaranteed loans
- must be destined to cover the costs of personnel, investments and working capital in production sites and activities located in Italy, as certified by the beneficiary’s legal representative
- are subject to the beneficiary’s undertaking that no resolution to distribute dividends will be taken in 2020 by the beneficiary and by any other entity with registered office in Italy, belonging to the same group
- are subject to the beneficiary’s undertaking that its employment levels will be managed in agreement with the employees’ unions.
The beneficiary must be in bonis as of December 2019, i.e. not falling under the definitions of enterprises in need pursuant to EU Regulations 651/2014, 702/201, and 1388/2014, and must not have deteriorated debts towards the financing bank as of February 29, 2020.
Guarantees are available as follows[2]:
| Turnover of the beneficiary/ employee (limit) |
Duration of the financing |
Interest- only period |
Maximum
guarantee amount |
Direct guarantee amount |
Application Procedure |
| Up to Euro 1,500 million
and up to 5,000 employees in Italy (consolidated data to be provided) |
Up to 6 years |
Up to 24 months |
The higher between
* 25% of the 2019 turnover as per the b/s or the tax return
and
*200% of the personnel cost in 2019 as per the b/s or the tax return |
90% |
Application processes by the financing bank and by SACE |
| Between Euro 1,500 million and Euro 5,000 million
and above 5,000 employees in Italy (consolidated data to be provided) |
Up to 6 years |
Up to 24 months |
Same as above |
70% |
As above + resolution of the Ministry of the Economy and Finance, upon opinion of the Ministry of the Economic Development, taking into account the role of the applicant enterprise in respect to the following: 1) contribution to technological development, 2) logistics and supply, 3) impact on critical and strategical structures, 4) impact on employment levels |
This SACE guarantee applies to new financing; however, an already existing loan may be extinguished by the new guaranteed one, provided that as a result the amount of credit allowed by the concerned bank is higher than the previous one.
Support to export and internationalization (section 3)
The Decree n. 23 introduced a co-insurance system according to which 90% of the insurance activity of SACE is undertaken by the state administration; as a consequence, SACE has more resources available to support the internationalization of Italian enterprises and the export.
In granting the above state insurance guarantee, those sectors deemed to be strategical as to employment levels and effects on the national economic system shall be privileged.
BUSINESS CONTINUITY
Financial losses and re-capitalization (section 6)
Up to December 31, 2020, financial losses exceeding 1/3rd of the corporate capital shall not cause the mandatory reduction of the capital nor, if impairing the minimum corporate capital and not covered, they shall cause the mandatory winding up of an Italian limited liability, joint stock or cooperative company (pursuant to sections 2446, 2447, 2482 tr. 2484, 2445 duodecies of the Civil Code); as a consequence, directors are exempted from the obligation to manage the company on a purely conservative basis when the company would otherwise be in a winding up status because of losses.
Company accounts (section 7)
Balance sheets for the fiscal year ending within December 31, 2020 (as well as those closed as of February 23, 2020 but not yet approved) can be drafted applying evaluation criteria based on business continuity perspective; in other words, the directors, in evaluating certain items of the accounts, are exempted from taking into account the effects of the emergency financial crisis (which would make mandatory the evaluation of said items in a liquidation-not continuity- perspective), provided that this is noticed in the accompanying documents.
Shareholders loans (section 8)
Shareholders’ loans granted to limited liability and joint stock companies from April 9, 2020 up to December 31, 2020 are exempted from the subordination rules of section 2467 of the Civil Code (i.e. their repayment is not conditioned upon the prior payment of the other creditors, even if granted where the financial situation of the company would make advisable an equity contribution).
Temporary suspension of insolvency procedure applications (section 10)
Applications for bankruptcy or for extraordinary administration for large enterprises (pursuant to D.Lgs 270/1999) filed between March 9, 2020 and June 30, 2020 are inadmissible.
The above mentioned period of time is not accounted for the purpose of the one year term for application for bankruptcy of a company cancelled from the Companies’ Registry and for the purpose of the statute of limitation term for revocation claims concerning payments and transactions affecting the creditors’ interests (”azioni revocatorie”- section 69 bis of Bankruptcy Law); however, the relevant period- prior to the insolvency declaration- in which the suspect payment /transaction occurred, remains unchanged.
Postponements of terms are also provided for in the matter of “concordato preventivo” (composition with creditor insolvency procedure- section 9)
Expiry terms of instruments postponed (section 11)
Terms (including for payments) relating to checks, promissory notes and similar instruments are suspended between March 9 and April 30, 2020; as consequence, terms originally expiring on a date within said period will expire on May 1.
CONTROL OF ACQUISITIONS
Acquisition Control-Golden Powers (and the like) enhanced (section 15, 16 and 17)
In order to avoid that Italian companies operating in sectors deemed strategical or of national interest, due to their loss of value as a consequence of the COVID-19 crisis, become the target of foreign investments resulting in a damage to the Italian economy, the Italian government enhanced the scope of its control (“Golden Powers”, as already provided by D.L. 15 March 2012, n. 21 converted into Law 56/2012)
– to include, among the target companies, those operating in all the sectors identified by article 4.1 of EU Regulation 452/2019, and namely:
(a) critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure;
(b) critical technologies and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009, including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies;
(c) supply of critical inputs, including energy or raw materials, as well as food security;
(d) access to sensitive information, including personal data, or the ability to control such information;
(e) the freedom and pluralism of the media.
Credit, bank and insurance sectors are expressly mentioned as critical financial sectors;
– to include, up to December 31, 2020, among the transactions requiring prior notification to the Prime Minister, the acquisition of controlling share-ownership in companies operating in the mentioned sectors, as well as the resolutions causing changes in the ownership, control and availability of assets in same sectors (that, in addition to the transactions already subject to notification pursuant to Law 56/2012);
– to include, up to December 31, 2020, among those by which notification is due, the EU entities/individuals undertaking control of a company operating in the concerned sectors and the non EU entities/individuals acquiring voting rights or capital shares of 10% or above or getting a subsequent share of 15%, 20%, 25% or 50% of the target company. Clearly, in order to preserve the free circulation of capitals and investments within the European Union, any limitation to intra-EU transactions shall be applied only to the extent necessary for public order and safety purposes;
– (as allowed by Regulation 452/2019, but not provided for, originally, by Law 56/2012), to include the possibility of an ex officio control of the government in same sectors/transactions which are the object of the “Golden Powers”, where due notification is lacking or defective; in that respect, the government may get information and documents from the concerned companies, entities and public administrations;
– (as allowed by Regulation 452/2019, but not previously provided for by TUF – the Italian main consolidated law in the matter of finance), to include the possibility for CONSOB (the Italian Companies and Exchange Commission) to control the transactions concerning small and medium size public companies (PMI), for a limited period of time, and also below the thresholds of 3% and 5% provided by article 120 par. 2 bis TUF, as well as to request to purchasers of shares below 5% clarifications about their objectives over the 6 month period following said acquisition.
Actually, CONSOB, with resolutions of April 9, 2020, applied the above new controls, to 104 identified public companies.
The above described measures are compliant with the suggestions in that respect issued in March 2020 by the European Commission.
DELAY OF PROCEDURAL TERMS AND HEARINGS
Suspension of the judicial terms and postponement of hearings in civil and tax proceedings (section 36)
Any procedural term in civil proceedings already suspended from March 9 to April 15, 2020 continues to be suspended up to May 11, 2020 included.
Same suspension continues to apply to the challenge of orders/resolution of the tax authorities before the Tax Commissions.
Exception is made for civil proceedings concerning the urgent protection of personal rights of individuals (e.g. in the matter of alimony, children of minor age, etc), for terms and hearings related to the withholding of enforceability of judgements and, in general, all proceedings where the delay might cause severe damages to the parties (in this case the urgency is declared by the Judge).
Due to strict limitations to the activities of the judicial offices up to June 30, 2020, hearings, if at all urgent, are dealt with in writing or by video-conference.
Statute of limitation and expiry terms, where they need to be interrupted by a writ of summons or the like which is prevented by the above limitations, do not apply.
Suspension of the judicial terms and postponement of hearings in administrative judicial proceedings (section 37)
Any procedural term in administrative judicial proceedings proceedings already suspended from March 9 to April 15, 2020 continues to be suspended up to May 15, 2020 included.
Notwithstanding the above, decisions in urgent proceedings are taken.
Oral discussions are limited up to June 30, 2020 and there continue to be strict limitations of the activities of the judicial offices up to June 30, 2020.
Suspension of the judicial terms and postponement of hearings – Criminal Proceedings (section 36)
The general suspension of terms and hearings is extended up to May 11, 2020 included also in criminal proceedings.
(more information available upon request by our criminal law department).
EXTENSION OF TERMS IN TAX MATTERS AND OTHER TAX PROVISIONS
(please refer to your tax advisor for a more detailed and complete information)
The Decree n. 23 provides for several extensions of terms for tax payments, aimed at supporting self employed individuals, professional and businesses. Here are some:
No sanctions and interests for payments to public agencies with deadlines on March 16, 2020 – extended to April 16, 2020.
All payments due to public agencies, including taxes social security contributions, expiring on March 16 (term already extended to March 20, 2020) will not accrue any sanction or delay interest up April 16, 2020.
Extension of payments terms for VAT, withholdings and other taxes (sections 18)
VAT for March and April 2020, withholding taxes relating to subordinate employees and similar and social security contributions for the months of March and April can be paid in one installment within June 30, 2020 or in five monthly installments from June, 2020.
The extension is available to
- enterprises, self-employed individuals and professionals located in Italy with revenues not higher than Euro 50 million in 2019 which had in March and April 2020 a reduction of at least 33% of their turnover with respect to March and April 2019 ( each month should be autonomously considered)
- enterprises, self-employed individuals and professionals located in Italy with revenues higher than Euro 50 million in 2019 which had in March and April 2020 a reduction of at least 50% of their turnover with respect to March and April 2019 ( each month should be autonomously considered)
- enterprises, self-employed individuals and professionals located in Italy which started their operations after March 31, 2019 (irrespective of any reference to previous revenues/turnover)
- enterprises, self-employed individuals and professionals located in the provinces of Bergamo, Brescia, Cremona, Lodi e Piacenza, irrespective of their revenues in 2019, which had in March and April 2020 a reduction of at least 50% of their turnover with respect to March and April 2019 (each month should be autonomously considered).
No withholding taxes for certain tax payers-revenues (Section 19 – amending section 62 par. 7 of DL n. 18/2020)
Tax-payers with revenues not exceeding Euro 400,000 in calendar year 2019 can avoid to have their revenues obtained from March 17 to May 31, 2020 made subject to the withholding tax applicable to self- employement revenues or to sale representative or intermediation commissions, provided that they did not incur in costs for employees or the like in the preceding month; the option shall be exercised by way of an appropriate notice; the unpaid withholdings shall be paid directly by the tax-payer in one installment within July 31, 2020 or in 5 monthly installments from the month of July, 2020.
Calculation of tax advance payments with provisional method (section 20)
All tax payers may estimate the reduction of their revenues in current fiscal year with respect to the previous fiscal year and pay the respective IRPEF, IRES and IRAP advances based on said estimates; should the tax advances so evaluated and paid not be lower than 80% of the tax advance actually due, no interests or sanctions will apply.
Tax credit for workplace sanification costs (section 30 – confirming and amending section 64 DL 18/2020)
Anyone carrying out a business or profession is entitled to a tax credit up to Euro 10,000.00 for 50% of the evidenced costs incurred for the sanification of the workplaces and work instruments up to Euro 20,000.00. The criteria for said tax credit will be determined by subsequent Ministry Decrees.
Delay of Certificazioni Uniche
No sanctions shall apply to the delay up to April 30, 2020 in forwarding to the Tax authority (Agenzia delle Entrate) and to employees and self- employers the Certificazioni Uniche (due within March 31, 2020).
[1] Additional details of conditions and requirements to be checked case by case
[2] Additional details to be checked case by case
