In recent days, the Italian Government has adopted important measures to cope with the current epidemiological emergency, supporting the productive structure of the country.
In this respect, the so-called Liquity Decree Law (Decree-Law No. 23/2020), published in the Official Gazette on April 8th, is especially worth noting as it introduced urgent measures to favor access to credit and postpone certain fiscal obligations for enterprises. The above provisions focus particularly on (1) providing access to credit and support for companies on liquidity, export, internationalization and investment projects; (2) guaranteeing the continuity of enterprises; (3) strengthening the State’s special powers in sectors of strategic importance and the transparency obligations in financial matters; (4) tax and accounting measures.
On the first aspect, art. 1 of the Liquidity Decree, in order to ensure the necessary liquidity for Italian companies affected by the COVID-19 pandemic, provides that the State, through SACE S.p.A. (Cassa Depositi e Prestiti Group), will guarantee (in favor of banks, national and international financial institutions and other entities authorized to exercise credit in Italy) loans granted to the abovementioned companies, for a maximum amount of 200 billion euro, of which at least 30 billion euro shall be reserved for SMEs. The guarantees shall be issued no later than the 31st of December 2020, for loans not exceeding 6 years, with the possibility for companies to benefit from a grace period of up to 24 months.
The amount of the State’s guarantees varies according to the size of the company, turnover and number of employees and in any case may not exceed 25% of the company’s turnover in 2019 or twice the company’s employment costs in 2019. Enterprises with less than 5,000 employees in Italy and an annual turnover less than 1.5 billion euros may obtain coverage equal to 90% of the amount of financing requested and also benefit from a simplified procedure for its issuance. The coverage drops to 80% for companies with more than 5,000 employees and an annual turnover between 1.5 and 5 billion euro, and 70% for companies with an annual turnover above 5 billion euro. Special attention is paid to SMEs, which can freely access the guarantee with 100% coverage, provided they have exhausted the possibility of referring to the Central Guarantee Fund, which has been further increased.
With regard to the measures aimed at ensuring the continuity of businesses, we should mention in particular the full postponement of the entry into force of the Business Crisis and Insolvency Code until September 1st, 2021 (art. 5); the disapplication, for the cases that occurred during the financial year closing 31st of December 2020, of the obligations to reduce and/or increase the share capital provided for by the Italian Civil Code (art. 2446, 2447 and 2482 bis) in the event of a reduction of the share capital due to losses exceeding one third and/or below the minimum limit provided for by laws (art. 6); the inadmissibility of judicial actions filed in the period between March 9th 2020 and June 30th 2020 for the declaration of bankruptcy, for the declaration of insolvency prior to the compulsory administrative liquidation (liquidazione coatta amministrativa) and to extraordinary administration of large firms in crisis (amministrazione straordinaria delle grandi imprese insolventi) (art. 10).
With regard to the strengthening of the State’s special powers in sectors of strategic importance and of the transparency obligations in financial matters, it should be noted that the scope of application of the so called golden power has been extended considerably, thus allowing the State to exercise a veto power to protect Italian companies from hostile corporate transactions, not only in traditional sectors, but also in the insurance, credit, financial, water, health and safety sectors.
From a fiscal point of view, the Government has intervened by postponing tax and fiscal obligations for self-employed workers and enterprises having their registered or operational headquarters in Italy (Article 18). In particular, the Liquidity Decree provides the suspension of the payment for VAT, withholding tax and contributions for the months of April and May, in addition to those already provided for in the so-called “Cura Italia” Decree.
The suspension has been foreseen to specifically apply to enterprises and self-employed workers that have registered a turnover loss amounting to at least 33% (in case the total turnover is less than 50 million) or 50% (in case the total turnover is more than 50 million). A more favorable policy applies for companies operating in the most badly affected provinces (Bergamo, Brescia, Cremona, Lodi, Piacenza) for which the suspension of VAT payments is granted on the sole condition that there has been a reduction in turnover of at least 33%. Payments must be made from June onwards, but with the possibility to pay within five installments.
It should also be noted that the President of the Council of Ministers issued a new decree on April 10th which extends, until May 3rd, the containment measures already introduced by the Prime Minister’s Decrees dated 9th, 11th and 22nd March and on the 1st of April 2020 respectively, which concern, inter alia, the movement and mobility of persons; restrictions on industrial and commercial production activities, including those open to the public and deemed non-essential (i.e. commercial businesses).