On 26 October 2019, Official
Journal no. 252 published Legislative Decree 124/2019 containing “Urgent measures in the field of taxation and
for non-deferrable requirements” (i.e., the Tax Decree). The Decree, which is linked to the 2020 Budget Law,
contains, among other things, major innovations for customers in the field of
procurement and in terms of the administrative liability of entities.
Let’s go into detail
Contracts
Article 4 of the Tax Decree
provides that, as of 1 January 2020
, companies commissioning service or work contracts will be required to pay withholding taxes made by contractors
and subcontractors, during the term of the contract, on the salaries paid to
staff directly employed under the contract.
To this end:
- each customer must
have a dedicated current account and
must be responsible for disclosing the details of said account to the
contractors and subcontractors;
- each contractor and
subcontractor will be obliged, no later than 5 days before the payment
deadline, to: (i) inform each customer of the list of names of employees employed under the contract,
specifying their tax codes; (ii) the salary
data and working hours of all employees employed under the contract; (iii)
the details for filling in the payment instructions; (iv) the details of the
payment made;
- each customer must make the payment under the legal terms
and must inform, by certified email, each
contractor and subcontractor, that the payment
has been made.
The customer shall therefore
be held liable for the payment of withholdings made by contractors and
subcontractors within the limit of the sum of the amount of transfers received,
unless the latter have failed to disclose the details of the bank or postal
account to which payments must be made. In this case, the decree provides for
the full and absolute liability of
the customer.
Only contractors and
subcontractors with the following requirements (to be certified by the Italian
Revenue Agency and to be communicated to the customer) may pay withholding
taxes directly:
- having
been in business for at least five years or having made total payments, within
the previous two years, for an amount exceeding €2 million;
- not
having any official registration or enforceable investigations relating to
taxes or social security contributions for amounts exceeding €50,000.00.
The scope of application of
the provision is not limited to tenders, given that, as stated in the
Explanatory Report, “contracts that
have not been appointed or combined contracts, as well as subcontracts,
logistics, shipping and transport contracts, in which the purpose of the
contract is, in any case, the undertaking of an obligation by the contractor,
are also understood to be included in the expression used”.
Administrative
liability of entities
Article 39 of the Tax Decree
introduces into the list of offences underlying the administrative liability of
entities pursuant to Legislative Decree
231/2001 “the crime of
fraudulent tax returns through the use of invoices or other documents for
non-existent transactions” (i.e., tax
offence, Article 25-quinquedecies), previously subject to increased
penalties for individuals. Specifically, it has been provided that, in the
event of the commission, in the interest or to the advantage of the entity, of
this type of offence by a senior management representative or submitted to it,
a financial penalty is applied to said entity, which may amount to up to 500 shares, corresponding to
€774,500. This is unless the entity is able to prove that it has adopted and
effectively implemented an Organisation, Management and Control Model. This new
legislation is expected to apply as of the date of publication of the
conversion law in the Official Journal.
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The Tax Decree is now being
examined by Parliament for its conversion into law, where corrections may be
made to the relevant text.