Faced with the pandemic emergency in progress, the Legislator and the Government have introduced rules aimed at safeguarding jobs, allowing the use of wage supplements and imposing a ban on dismissal for justified objective reasons pursuant to Article 3 L. n. 604/1966 and collective dismissal pursuant to Law no. 223/1991, except for the following hypotheses:
A further hypothesis was also introduced with respect to the prohibition of dismissal. The conversion of the D.L. n. 18/2020, through Law no. 27/2020, has in fact amended Article 46, regarding the suspension of dismissals according to which the suspension of collective procedures for staff reduction and those due to dismissals for justified objective reasons pursuant to art. 3 of the law n. 604/1966, do not apply in the “hypothesis in which the personnel affected by the dismissal, already employed in the contract, are hired following the takeover of a new contractor by virtue of the law, of the national collective labor agreement or clause of the contract“.
Source: Guida al lavoro de Il Sole 24 ore.
On 13 January 2020, on the occasion of the Forum of accountants and accounting experts held in Milan, the Italian Tax Authority responded to some doubts closely related to the concrete application of the Tax Decree.
First of all, it has been affirmed that employment agencies as governed by Chapter I of Title II of Legislative Decree 276/2003 are also covered by the new rules.
It was also noted that the amount of 200,000 Euros is to be understood in reference to the annual amount entrusted to an individual business. If one and the same client has entrusted several works, the totality of the works and services entrusted by it must be added together. If, on an annual basis, the result leads to the threshold under examination being exceeded, a copy of the payment proxies relating to the payment of withholding tax on the salaries of directly employed employees must be requested from the contractors/subcontractors/trusted agents.
In essence, the coordinating rule described applies indiscriminately to all works entrusted by the same client.
Paragraph 5 of art. 4 of the Tax Decree provides for a system of exemption from reporting obligations under certain conditions. These conditions, in the opinion of the Italian Tax Authority, must be met jointly.
In order to verify the fulfilment of the payments made in the tax period to which the tax returns submitted in the last three years refer, account must be taken of payments made for amounts in excess of 10% of the amount of income or remuneration as resulting from the returns.
The Italian Tax Authority also observed that the payments to be taken into account in the tax account, when a company finds itself in a condition of tax loss for which (according to the law) it is not required to pay tax, do not only concern income tax but also VAT.
Finally, the Italian Tax Authority claims that in order to allow the client to verify that the withholding tax has been paid by the contractor/subcontractor/trusted agent, copies of the payment proxies relating to the payment of withholding tax relating to an individual worker may be cumulative. In order to carry out the checks imposed, in fact, it is sufficient to verify the existence of a correlation between the payment proxies, which may therefore concern all the workers employed by the same client, and the list of the names of all the workers sent to it by the contractor or subcontractor.
The above is subsequent to Resolution 108/2019 with which the Italian Tax Authority again has clarified that:
Law 157/2019 converting, with amendments, Decree Law 124/2019 was published in Official Journal 301 dated 24 December 2019. “Tax Decree“). Therefore, as of 1 January 2020, companies that entrust one or more works or one or more services for a total annual amount of more than €200.00 to a company – through “a contract of tender, subcontracting, entrusting to consortium members or negotiating relationships, however denominated, characterised by the prevalent use of labour at the headquarters of the client with the use of capital goods owned by the latter or traceable to it in any form” – must request the same copy of the payment proxies relating to the payment of withholding tax for employees directly employed in the execution of the work/service. The payment of withholding tax is made, with separate powers of attorney for each client, without the possibility of remuneration. In order to allow the client to acknowledge the total amount of the sums paid, the companies, within 5 working days after the due date of payment of the withholding tax, are required to send it: (a) the payment proxies and (b) a list of the employees directly employed in the execution of the work/service in the previous month, identified by means of a Tax Code, with details of the hours worked by each employee involved, the amount of remuneration paid to the same and details of withholding taxes made in the previous month, with a separate indication of those relating to the service entrusted by the client. In the event of non-transfer by the undertakings or if it is established that withholding tax has not been paid or is insufficient, the client shall suspend, for as long as the default persists, the payment of the fees accrued. This is up to 20% of the total value of the work/service or for an amount equal to the withholding tax not paid but resulting from the documentation submitted. The client is also required to notify the relevant Italian Revenue Agency within 90 days. If the client fails to comply with the obligations in question, it shall incur a penalty equal to the penalty imposed upon the contractor/subcontractor. These obligations do not apply if the companies have informed the client, attaching the relevant certification, of the existence, on the last day of the month preceding the expiry date, of the following requirements: (i) that they have been in business for at least 3 years, in compliance with their declaration obligations and that they have made, during the tax periods to which the tax returns submitted in the last three years refer, total payments recorded in the tax account for an amount of no less than 10% of the amount of revenues and income or remuneration resulting from such returns; (ii) that they have no entries or executive assessments or debit notices entrusted to collection agents relating to income tax, IRAP (Corporate Income Tax), withholding tax and social security contributions for amounts in excess of €50,000, for which the payment deadlines have expired and payments are still due or no suspension measures are in place.