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Daily Tax Report: International

Businesses Get Additional Tax Credits in Italy to Fight Virus

March 18, 2020, 12:39 PM

Italy is giving businesses a 50% tax credit for sanitation expenses, such as daily cleaning services, masks, and other precautions that help stop the spread of new coronavirus.

The tax credits, worth up to 20,000 euros ($22,000) annually, are part of a 25 billion euro relief package taking effect Wednesday. The package is aimed at lessening the Covid-19 outbreak’s damage to Italy’s already fragile economy. The Ministry of Economy and Finance and Ministry for Economic Development will issue a decree with details in the next 30 days about how to apply for and receive the credits.

Many businesses were forced to close for most of March due a nationwide lockdown, but manufacturing and essential services are allowed to continue with certain safety protocols in place.

Other relief measures include suspending withholding tax and Social Security tax payments until June 30 for businesses like gyms and theaters that have been forced to close. Payment suspensions are also in effect until May 31 for companies that manage train stations, bus stations, airports, and car rentals. Tax credits worth 60% of commercial rent due for the month of March will also be available.

In the hardest-hit provinces of Bergamo, Cremona, Piacenza, and Lodi, all withholding tax, Social Security tax, and value-added tax payments will be suspended until March 31 for companies with less than 2 million euros in earnings.

The Italian Revenue Agency previously announced it would temporarily suspend tax audits, verifications, inspections, collections, and disputes. Under the new law, the suspension will continue until May 31. Taxpayer responses to inspections and verifications won’t be due in the meantime.

To contact the reporter on this story: Janna Brancolini in Milan, Italy, at correspondents@bloomberglaw.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Rachael Daigle at rdaigle@bloombergtax.com

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