Containment measures taken by the Italian government in order to curb the Coronavirus spread (such as restrictions to people’s movement, border and non essential activities closures), are causing an unprecedented crisis for Italian and foreign companies operating in our country.
In order to support the businesses that find themselves in this serious situation, the Italian government has adopted several regulations in which are laid down different protective measures and incentives for enterprises such as DPCM No. 18 dated March 17th, 2020 (so called “Cura Italia” decree) and Law Decree No. 23 dated April 8th, 2020 (so called “Liquidità” decree).
In this paper, the most relevant supportive measures for enterprises are going to be analyzed.
1. Ordinary Wages Guarantee Fund (CIGO), Special Wages Guarantee Fund (CIGD), ordinary allowance
As mentioned above, the “Cura Italia” decree and the Ordinance No. 4/2020 published in the Official Journal on March 24th, 2020, provide for supportive and protective measures to enterprises.
Among these measures, the DPCM has foreseen some wages guarantee instruments, in particular by extraordinarily extending the Ordinary Wages Guarantee Fund (CIGO) and the Special Wages Guarantee Fund (CIGS).
Some clarifications about the aforementioned instruments are provided here below.
1.1 Ordinary Wages Guarantee Fund (CIGO) with reason “COVID-19 nazionale”
With regard to CIGO, a dedicated single reason (COVID-19 nazionale) has been set up. With this reason, the CIGO can be activated with a simplified procedure, and there will no longer be access limits (even the employees that have been working for less than 90 days can now access to CIGO).
Who can apply?
As clarified by INPS (the National Social Welfare Institution), with its message No. 1287 dated March 20th, 2020, the vast majority of the enterprises operating in our country can apply to the CIGO as outlined above.
Furthermore the request for the new short-time allowance can be done even if the employer has previously applied to CIGO with a different reason than “Covid-19 nazionale”. The reason “Covid-19 nazionale” in fact will prevail, for the period granted, over the previous application.
INPS has furthermore clarified that the enterprises which, at the date of February 23rd, 2020, are under an Extraordinary Wages Guarantee Fund (CIGS) program, could suspend the CIGS program and could access to the new CIGO (obviously only if they have the requirements necessaries to access to CIGO).
Instead, the enterprises that do not have the requirements necessaries to access to CIGO, could apply for the Special Wages Guarantee Fund (CIGD), as outlined in paragraph 1.3 of this paper.
1.2 The ordinary allowance
The ordinary allowance is an employment allowance which is paid, in case of suspension or reduction of working activity, to employees with employers enrolled with the Solidarity Funds or with Wage Integration Fund (FIS).
This institution has been simplified, in order to make it accessible to the vast majority of workers. Furthermore, with regard to FIS, the ordinary allowance will be granted even to the small and medium size enterprises (i.e. to the enterprises having from 5 to 15 employees).
– Employees, including those hired with an apprenticeship contract and with the exclusion of the managers and home workers, with employers having more than 5 employees;
– Employers having an ongoing solidarity allowance program could apply to the ordinary allowance even for those workers who are already beneficiaries of the solidarity allowance, in order to fully cover the working hours that cannot be worked due to the suspension of working activity.
– Solidarity funds
– Employees, including those hired with an apprenticeship contract and with the exclusion of managers, unless otherwise provided by the different funds regulations.
1.3 Special Wages Guarantee Fund (CIGD)
The CIGD is a wages guarantee instrument directed to employers which have no right to be granted with the above listed instruments.
The “Cura Italia” decree provides for Special Wages Guarantee Fund programs which are granted:
– for a period not exceeding nine weeks;
– to private sector employers, including agricultural, fisheries and third sector employers, and to civil religious entities
– employers granted with CIGO, FIS or Solidarity funds;
– employees hired after February 23rd, 2020.
2. Incentives to enterprises that decide to extent or convert their activities in order to produce medical tools and personal protective equipments
The “Cura Italia” decree and the Ordinance No. 4/2020 provides for facilities to enterprises that wants to extent or convert their activity in order to produce and supply medical tools and personal protective equipments, with the aim to contain and prevent the spread of COVID-19.
All the enterprises which have the legal status of a company, including partnerships, could access to such facilities, with the only exclusion of sole proprietorships and of self-employed workers.
It is granted, for the enterprises, an interest-free loan with 75% coverage of the spending program, repayable in a 7 years period, with a maximum facilitation of Euro 800.000,00. Even the expenses incurred before the application, but after the publication of the “Cura Italia” decree, are covered by this measure.
The interest-free loan could be converted, on the basis of the enterprise’s responsiveness, in a full non-repayable funding:
– to the extent of 100% if the investment will be finalized within 15 days;
– to the extent of 50% if the investment will be finalized within 30 days;
– to the extent of 25 % if the investment will be finalized within 60 days.
3. 50% bonus granted to employers for workplaces sanitation and purchase of personal protective equipments
Another interesting provision related to the personal protective equipments is enshrined in the “Liquidità” decree dated April 8th, 2020. The aforementioned decree provides for a 50% bonus granted to the employers who are purchasing personal protective equipments (such as Ffp2 and Ffp3 medical masks, gloves and shield visors) and for those employers who wants to purchase and set-up safety devices aimed to protect workers and ensure the safety distance. The aforementioned bonus covers even the purchasing of hand soap and disinfectant cleaners.
The aforementioned bonus (that consists in covering the 50% of the aforesaid expenses incurred up to December 31st, 2020) is granted to each beneficiary until the maximum amount of Euro 20.000,00.
4. Commercial leases: 60% tax credit
The “Cura Italia” decree grants a tax credit for an amount equal to 60% of the rental fees, related to the month of March 2020, and referred to real estate included in the cadastral category C/1 (e.g., workshops and shops) regardless of the size of the property itself.
5. Public credit guarantees for businesses – “Liquidità” Decree
In order to ensure enterprises’ liquidity, the “Liquidità” decree establishes state guarantees on bank loans, both for large companies and small and medium-size enterprises (the so called SME).
Such guarantees will have two different access channels:
– the public company SACE S.p.A. (which is headed to “Cassa Depositi e Prestiti” group) which is the channel dedicated to large enterprises;
– the Guarantee Fund for Small and Medium-size Enterprises (SME Guarantee Fund) which is the channel dedicated to enterprises with less than 499 workers.
5.1 Guarantees for large enterprises – the SACE S.p.A. channel (article 1 “Liquidità” Decree)
According to Article 1 of the “Liquidità” decree, SACE S.p.A. will issue – until December 31st, 2020 – public guarantees in favor of banks, national and international financial institutions and other entities authorized to deliver credit, for financing in every form to enterprises.
Under certain conditions, the “Liquidità” decree provides for the following guarantees:
– 90% guarantee for companies who employ in Italy less than 5.000 workers and who have an annual turnover not exceeding Euro 1.5 billion;
– 80% guarantee for companies who employ in Italy more than 5.000 workers who have an annual turnover ranging from Euro 1.5 billion to Euro 5 billion;
– 70% guarantee for the enterprises with an annual turnover exceeding Euro 5 billion.
5.2 Guarantees reserved to enterprises that employ up to 499 workers – the SME Fund channel (article 13 of “Liquidità” decree)
The “Liquidità” decree establishes specific measures for enterprises with a registered office in Italy that employs up to 499 workers. For the aforementioned businesses, under certain conditions, the SME fund guarantee:
– is granted for free and can be accessed without using the Fund Assessment Forms;
– amounts to 90% of the financing until the maximum amount of Euro 5 millions.
5.3 Enhanced measures for particular enterprises
For the smaller SME and for the individual companies who self-certify to have been damaged by the Covid-19 outbreak and who demand new financing the SME fund will issue a guarantee of 100% of the financing. The aforesaid guarantee would be issued automatically and for free. In this way, the financier will lend the amount requested (that cannot exceed Euro 25.000) without waiting for the outcome of the SME fund investigation.
For the businesses that employ up to 499 workers and whose incomes are lower than Euro 3,2 millions, the SME fund will provide a 90% guarantee (the amount of the funding cannot exceed Euro 800.000) that can be increased up to 100% whenever the further 10% could be granted by the consortium “Consorzi fidi” (Confidi).
6. Suspension of the deadlines related to bills of credit (article 11 “Liquidità” Decree)
The aforementioned decree provides for a suspension, from March 9th, 2020 to April 30th, 2020, of the deadlines related to:
– money orders, promissory notes and other bills of credit issued before the effective date of the aforementioned decree;
– every other enforceable act who can be enforced from the effective date of the aforementioned decree.
7. Insolvency Law provisions – “Liquidità” Decree
The “Liquidità” Decree includes a number of provisions that significantly affect the application of Italian Insolvency Law for the period of Covid-19 emergency, which can be summarized as follows:
– the entry into force of the new Italian Code of Corporate Crisis and Insolvency (“CCI”), originally scheduled for August 15th, 2020, has been postponed until September 1st, 2021;
– Extension of the deadlines related to the arrangement with creditors procedures (so called “concordati preventivi”) and debt restructuring agreements (so called accordi di ristrutturazione del debito) proceedings;
– unprosecutability of bankruptcy petition
8. Suspension of tax fulfillments, withholding tax, social security and welfare contributions deadlines
From a tax and social security point of view, the “Cura Italia” decree and the “Liquidità” decree have suspended several deadlines.
In particular the “Liquidità” decree – under certain conditions and for taxpayers carrying out a business, art or professional activity in Italy – provides for the suspension of the payments in expirations during April and May 2020 related to:
– the withholding taxes pursuant to articles 23 and 24 of the Presidential Decree n. 600/1973 (employment incomes or corresponding incomes), also relating to the regional and municipal charges, in relation to which the aforementioned subjects operate as a withholding agent;
– valued added tax (VAT);
– social security and welfare contributions and premiums for compulsory insurance.
The suspended payments shall be made – without the application of penalties and interests- in a single solution by June 30th, 2020 or split in five equal monthly payments starting from the months of June.
The foregoing applies without prejudice to the provisions of the “Cura Italia” decree related to specific categories of taxpayers (i.e. those carrying out the activities mainly affected by the emergency).
For those taxpayers, expressly listed in the decree, the “Cura Italia” decree provides for the suspension from March 2nd, 2020 to April 30th, 2020 of the payments related to:
– the withholding taxes pursuant to articles 23 and 24 of the Presidential Decree n. 600/1973 (employment incomes or corresponding incomes) , also relating to the regional and municipal charges, in relation to which the aforementioned subjects operate as a withholding agent;
– valued added tax (VAT) expiring on March 2020;
– social security and welfare contributions and premiums for compulsory insurance.
The suspended payments shall be made – without the application of penalties and interests- in a single solution by May 31st, 2020 or split in five equal monthly payments starting from the months of May.
9. Suspension of the activities of the Italian Tax Authority
The Decree provides for the suspension, from March 8th, 2020 to May 31st 2020, of the terms by which the Tax Authority has to fulfill certain kind of activities (such us finalize tax audits, issue and serve notices of assessment, request payments and pursue litigation).
Furthermore, the decree provides for the suspension of the payment deadlines expiring between March 8th, 2020 and May 31st 2020 related to certain kind of notices. This suspension applies to:
– assessment notices related to income taxes, VAT and IRAP
– payment orders related to local taxes;
– tax records;
– payment notices served by the National Social Security Institute (INPS).
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