Rilancio Decree - Measures related to tax assessment, collection and tax litigation

Prepared by Carlo Romano and Daniele Conti

On19 May 2020 the Law Decree no. 34 has beenpublished in the Official Gazette (“Rilancio Decree“). The new emergency decree is in line with the previous Cura Italia and Liquidità Decrees, introducing inter alia measures to support the liquidity the capitalisation of enterprises, incentives and tax credits as well as measures in the context of indirect taxation, tax assessment and tax litigation.

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A) Measures to support the liquidity and the capitalisation of enterprises

B) Further postponement of suspended payments

C) Incentives and tax credits

D) Simplifying measures

E) Measures related to VAT and other indirect taxes

F) Measures related to tax assessment, collection and tax litigation

G) Measures to enhance the recovery of companies in crisis

H) Measures to support the business liquidity of the enterprises and the credit sector

I) Internationalization Measures

F) Measures related to tax assessment, collection and tax litigation

Tax justice – Article 135

Pursuant to the Rilancio Decree, deadlines for demands of tax court fees, in the event of fully or partly delayed payment, are suspended from 8 March to 31 May 2020.

With reference to the tax hearings at distance, pending the adoption of the technical and detailed measures by the General Director of Finance, the Rilancio Decree amends Article 16, paragraph 4, of the decree-law no. 119 of 23 October 2018, inter alia, allowing judges and staff of the Tax Courts as well to benefit from the hearings at distance (where previously only parties could be not physically present in the courtroom).

New deadlines and suspension of payments based on automated and formal checks of tax returns – Article 144

Amounts due by March 8 through May 31 on the basis of the communications of the results of automated checks (Article 36-bis of Presidential Decree no. 600 of 29 September 1973, and Article 54-bis of Presidential Decree no. 633 of 26 October 1972) and formal controls (article 36-ter of Presidential Decree no. 600 of 29 September 1973) on tax returns, and of quantification of taxes on income under separate taxation scheme, even when they are paid into instalments, may be paid by 16 September 2020.

In addition to the ordinary rules on instalments for the payments at hand, Rilancio Decree also allows for further split into installments.

Suspension of the offsetting between tax credits and debts to be collected – Article 145

Pursuant to Article 28-ter of Presidential Decree no 602 of 29 September 1973, any sums refundable to taxpayers may be offset against other debts already included in the tax collection registry. In pursuance of the Rilancio Decree, such offsetting is not applicable in 2020, in order to allow all taxpayers to receive immediate liquidity.

Suspension of payments of sums due as a result of settlements, adjustments and liquidations and recovery of tax credits – Article 149

Rilancio Decree provides for the extension to 16 September 2020 of the deadlines for payments falling between 9 March and 31 May 2020, with respect to the following:

deeds of settlement;
out-of-court or in-court settlement agreement
mediation agreement for disputes of less than Euro 50,000 in value;
deeds of liquidation following the attribution of the cadastral rent;
deeds of liquidation for failure to register contracts (eg, leases);
deeds of recovery of tax credits;
deeds of liquidation following failed, deficient or late payment of registration tax, stamp duties and mortgage taxes relating to inherited real estate properties, of gift tax, of substitute tax on medium / long-term loans and of insurance tax.

In addition to the ordinary rules on instalments for the payments at hand, Rilancio Decree also allows for further split into installments.

Specific measures regarding litigation

Pursuant to paragraph 3 of this Article, the deadline for notification of the first appeal against the deeds listed above and those that could be settled without appealing is extended to 16 September 2020, provided that the related payment (also in installments) expires between 9 March and 31 May 2020.

Such measure, undoubtedly aimed at leveling the deadlines for appeal with those of the suspended payments, should be read jointly with the inherent character of some of the deeds referred to, as non-challengeable (such as, for instance, the out-of-court or in-court settlement agreements, which are finalized, respectively, with the the signing of the agreement or the drafting of the minutes at the hearing).

Suspension of the “tax peace” installments

The same suspension of payments (ie. due between 9 March and 31 May 2020 and consequently due by 16 September 2020) is also concerned with installments due on the basis of previous “tax peace” mechanisms, such as settlement of the final tax audit reports, of the deeds within tax assessment procedures, and of pending tax disputes (Articles 1, 2, 6 and 7 of decree-law no. 119 of 23 October 2018).

Return of undue payments on social security benefits and wages subject to withholding taxes – Article 150

Pursuant to Article 10 of the TUIR, the sums returned by the individual taxpayer and subject to taxation in previous years are normally deductible against the income of the same individuals.

Pursuant to Rilancio Decree, starting from January 1, 2020 (except for already final or settled cases), amounts previously subject to withholding tax are returned net of the borne withholding tax and are not deductible. Furthermore, employers (including some constitutional bodies) are entitled to a tax credit of 30%.

This rule, as clarified in the explanatory report, aims at lower civil and administrative disputes concerned with the employer’s right to be refunded amounts that were unduly paid to employees, gross or net of withholding taxes, by upholding the case-law of the Supreme Court and of the State Council.

Extension of the suspension period for deeds and measures of suspension of licenses and administrative authorizations for the exercise of business or of suspension of the business itself or of registration in professional registers and associations – Article 151

The suspension period for deeds and measures against the repeated failure to issue receipts, tax receipts, certification of fees or regularization of the purchase of technical means for telecommunications (such as SIM for prepaid subscriptions) is extended to 31 January 2021. More specifically, the suspension is concerned with the following measures and, in particular:

suspension of licenses and administrative authorization to carry out business,
suspension of the exercise of business itself,
suspension of registration in professional registers and associations.

The said extension of the suspension period is not applicable to taxpayers who, after 19 May, commit even one of the violations mentioned above.

Suspensions of collection agents’ foreclosures on salaries and pensions – Article 152

Between 19 May and 31 August 2020, effects of foreclosures on salaries, employment-related indemnities (including those relating to employment termination), pensions, payments of similar nature and retirement allowances, thus allowing the payer to make those amounts available to the debtor (even in the event of an execution order issued by the enforcement court).

Any provision or crediting made before 19 May remain, respectively, effective and non-refundable.

Suspension of checks on payments by public bodies – Article 153

Pursuant to Article 48-bis of Presidential Decree no. 602 of 29 September 1973, public bodies and companies with a predominant public participation carry out checks on the beneficiaries of amounts exceeding Eur 5,000, with reference to the existence of one or more served notices of tax collection, equal to at least the same amounts, which the taxpayer has not fulfilled. In such a case, the checks led to the freezing of the payment and to the reporting to the local collection agent.

Under the Rilancio Decree, the debtor in breach of notices of tax collection may still receive the amounts due by the mentioned entities.

Extension of the suspension of collection agent’s activities – Article 154

From the collection agent’s standpoint, the Rilancio Decree makes a number of amendments to the Cura Italia Decree.

More specifically:

the collection agent’s activities are suspended until 31 August 2020 (in lieu of 31 May 2020);
for the installment plans still in place on 8 March 2020 and with reference to the accepted requests submitted until 31 August 2020, the installment plans are cancelled if the debtor fails to pay at least ten (instead of five) installments, even if not consecutive;
all installments of the third collection settlement program and of the “saldo e stralcio” due in the current year can be paid by 10 December 2020, without however the five-day allowance (so that, as expressed in the explanatory note, the safe acquisition of the amounts for 2020 to the State’s and creditor bodies’ budget is ensured);
the prohibition to request instalment payments for debts that were first included in the third collection settlement or “saldo e stralcio” statements, and for which the applicant has not made payments then, is repealed.

Extension of statutes of limitations for tax deeds in order to foster the gradual recovery of economic and social activities – Article 157

In order to avoid tax notifications to taxpayers in the period following the end of the crisis period, the tax deeds whose statute of limitations (without considering the suspension period provided for by the Cura Italia Decree) expires between 8 March 2020 and 31 December 2020, are issued by the end of the year, but are served to taxpayers in 2021.

The relevant tax deeds are:

deeds of tax assessment,
deeds of challenge and of imposition of penalties,
deeds of recovery of tax credits,
deeds of tax quantification and of adjustment and quantification.

For the fulfillment those, no interest is due for delayed payment and for late enrollment with tax collection registry between 1 January 2021 and the date of service of the deed.

Similar rules affect centrally processed deeds with massive methods (such as, for instance, communications relating to the outcome of automated and formal checks of tax returns).

In all cases, the Rilancio Decree sets out an exception for non-deferrable and urgent tax notifications, as in the case of challenges to tax fraud, tax deeds leading to the delivery of a criminal notice pursuant to the Criminal Procedure Code or those relating to precautionary measures. Another exception is stated for tax notifications functionally linked to the fulfillment of a simultaneous payment of taxes, as in the case of registration of judicial documents.

Lastly, the statute of limitations for certain notices of tax collection (such as those for amounts deriving from automated checks of tax returns on fiscal year 2018 and from formal checks of the tax returns on fiscal years 2017-2018) are extended by one year.

Combination of the suspension of court procedure deadlines and of the suspension of the deadline to lodge an appeal pending the settlement procedure – Article 158

By means of a rule expressly regarded as having interpretative nature, the Rilancio Decree clarifies that the suspension of the court procedure terms set forth by the Cura Italia Decree can be combined with the 90-day suspension of the appeal deadline pending a settlement procedure on a served deed of assessment.

This rule therefore formalizes the interpretative position expressed by the Revenue Agency in the circular letters no. 6/E of 23 March 2020, no. 8/E of 3 April 2020, and no. 11/E of 6 May 2020.

Let’s Talk

For a depeer discussion please contact:

Carlo Romano
PwC TLS Avvocati e Commercialisti
Partner

Daniele Conti
PwC TLS Avvocati e Commercialisti
Manager

On19 May 2020 the Law Decree no. 34 has beenpublished in the Official Gazette (“Rilancio Decree“).

The new emergency decree is in line with the previous Cura Italia and Liquidità Decrees, introducing inter alia measures to support the liquidity the capitalisation of enterprises, incentives and tax credits as well as measures in the context of indirect taxation, tax assessment and tax litigation. It has been entered into force on 19 May 2020.