The Italian Ministry Council met on March 16th to discuss extraordinary measures aiming to cope with the current emergency related to the spread of COVID-19.
Following the meeting, the new “Cura Italia” Decree was approved, which follows the previous Ministerial Decree dated February 24th and a Law Decree dated February 28th. The Cura Italia Decree deploys additional economic resources amounting to a total of 25 billion euros, therefore mobilizing a total cash flow of 350 billion euros. The Italian Prime Minister Mr. Giuseppe Conte has defined the measures therein provided as a “powerful” intervention which encompasses all sectors affected by the outbreak: health, labor, family aids, business.
We will hereinafter draw attention to the main updates for enterprises.
Firstly, measures to support SMEs are provided, as the Central Guarantee Fund for SMEs will be strengthened and authorized to grant free guarantees of up to EUR 5 million per company. State guarantees (up to 33% of loans disbursed) are also provided, in particular for undrawn credit facilities, which may not be withdrawn until 30th September 2020. Loan installments which will be due before 30th September 2020 may also be suspended until the abovementioned date without any additional charges.
For companies that have suffered turnover losses, operating in the sectors to be identified by a specific decree of the Ministry of Economy and Finance, the Cura Italia Decree provides measures to support liquidity. In particular, the exposures of cash deposits and loans to banks and other authorized entities, which grant liquidity to the aforementioned companies, may be assisted by the state guarantee up to a maximum of eighty percent of the exposure assumed.
These measures go along with those already foreseen in the regulations mentioned in the first paragraph, which include the refinancing of 350 million EUR of the SIMEST Fund, with the aim of supporting the activities of exporting companies by granting low-interest loans.
On the employment front, enterprises, regardless of the number of employees, will not be able to dismiss any worker for “justified objective reasons” (e.g. for reasons including drops in orders, closing of departments for epidemic-related reasons etc.) or to start collective dismissal proceedings for a period of sixty days starting from the entry into force of the decree; pending proceedings started after 23 February 2020 will also suspended for the same period. However, special Wages Guarantee Funds (an exemption from the ordinary Wages Guarantee Funds) are confirmed for all companies, even those having only one employee while, as for the ordinary Wages Guarantee Funds, a simplified path for their issuance will be provided under the new special application purpose called “COVID-19 emergency”.
On the fiscal side, it should be noted that for all persons who have their fiscal domicile, registered office or operating headquarters in Italy, tax obligations are suspended (with some exceptions provided for by Article 62 of the Cura Italia Decree) between March 8th 2020 and May 31st 2020.
With particular respect to entrepreneurs having an annual income/revenue not exceeding 2 million EUR in the 2019 tax period, self-liquidation tax payments due between March 8th and March 31st, relating to withholding taxes on labor-related incomes, VAT, contributions and premiums for compulsory insurance are suspended. Suspended payments will have to be made as a lump sum by 31 May 2020, or by (up to five) monthly instalments of equal amount starting from May 2020.
Further favorable measures are also envisaged for the economic activities most affected by the measures to suspend activities (companies in the tourism sector, the entertainment industry, catering, sport and culture), for which the payment of withholding taxes on labor-related incomes, INAIL contributions and premiums, as well as VAT, will be suspended from March 2nd to April 30th, 2020. Suspended payments must be made by May 31st, 2020 (June 1st as the deadline falls on Sunday), with the right to defer the payment into five monthly instalments.
Further economic measures are expected in April in order to provide further support to businesses to overcome the current emergency.