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Italy: Legislation on Economic Growth Enters into Force

(June 12, 2019) On May 1, 2019, a new decree-law with several measures intended to encourage economic growth entered into force in Italy. (Decree-Law No. 34 of April 30, 2019, Urgent Measures for Economic Growth and for the Resolution of Crisis Situations), GAZZETTA UFFICIALE [G.U., OFFICIAL GAZETTE], Apr. 30, 2019, G.U. website (in Italian).)

New Tax Provisions

The new legislation contains multiple provisions on complex tax matters that include, among other things, an amortization surcharge for new capital goods (id. art. 1(1)), deductions on corporate income (id. art. 2(1)) and municipal tax from income tax (id. art. 3(1)), and adjustments to the patent box corporate tax regime (id. art. 4(1)).

Taxation of Income Obtained Overseas by Italians

The Decree-Law includes provisions that impose taxation on Italians for income obtained overseas, which are meant to address the problem of “brain drain,” and are called “return of the brains” (rientro dei cervelli) provisions. (Id. art. 5(1).) Additionally, income from independent work and from autonomous work produced by workers who have transferred their residence back to Italy is considered as taxable income provided certain additional criteria are met. (Id.)

Tax Incentives for Reconstruction Efforts

The legislation establishes new tax incentives to stimulate reconstruction efforts in areas devastated by earthquakes, including the establishment of an earthquake (sisma) bonus. (Id. arts. 7(1), 8(1) & 10(1).)

Reporting and Collection of Taxes for Online Operations

Decree-Law No. 34 imposes tax reporting and collection responsibilities according to procedures established by the Italian Revenue Agency (Agenzia delle entrate) on those who, through the use of electronic interfaces, including virtual markets, platforms, or similar methods, facilitate sales at a distance of imported goods or goods inside the EU. (Id. art. 13(1).)

Guarantees for the Development of Medium-Size Enterprises

The Law allocates extra funds to the Guarantee Fund for Medium-Sized Enterprises, to be granted in accordance with the criteria and modalities established by the Ministry of Economic Development. (Id. art. 17(1).) It also approves similar measures to benefit other small and medium-sized enterprises (piccola e media impresa, PMI) (id. art. 18(1)) and allocates additional funds for the First-Home Guarantee Fund (id. art. 19(1)).

Financial Incentives Throughout the National Territory

The Decree-Law provides for new funds for cities around the country to finance energy efficiency projects and sustainable territorial development. (Id. art. 30(1).)

Historic Brands

The Law protects historic brands (marchi storici) by stating that holders of company brands that are registered in the country for at least 50 years and in continual use, and are connected to a national manufacturing company known for its excellence, are to enjoy additional copyright and other protective measures over their historic brands. (Id. art. 31(1).)

Financial Recovery Measures for Regions

The Law approves new measures for the economic recovery of the regions (id. art. 33(1)), in addition to plans for important investments in special economic zones (id. art. 34(1)).

Peoples’ Bank and the Savers’ Indemnification Fund

The Decree-Law includes several amendments to the Peoples’ Bank and the Savers’ Indemnification Fund, particularly concerning persons entitled to inherit funds belonging to a deceased saver. (Id. art. 36(2)(a).)

Debts of Local Entities

The legislation transfers to the metropolitan city of Capital Rome (Roma Capitale) the existing credits currently under the responsibility of the Management Commission (Gestione Commissariale) to determine the viability of their recovery. (Id. art. 38(1)(b)–(c).)

Areas of Complex Industrial Crises

The Law creates salary substitution measures to assist workers whose employment has ended during the time frames established therein. (Id. art. 41(1).)

Simplification in the Management of Third-Sector Entities

The new Law approves measures aimed at simplifying the administration of nongovernmental organizations called “third-sector” entities, particularly their registration with procurement agencies. (Id. art. 43(3)(a).) (For background see Dante Figueroa, Italy: Code to Regulate Nongovernmental Organizations, GLOBAL LEGAL MONITOR (Oct. 4, 2017).)

Additional Technical Professionals for Public Works 

In order to facilitate more efficient development of public works throughout the country, Decree-Law No. 34 authorizes the hiring of 100 specialized, highly professional staff, including engineers, architects, geologists, and administrative personnel. (Id. art. 47(1).)