The European Commission has approved under state aid rules Italy’s plans to partially waive its regional corporate tax for the year and provide tax credits for businesses and self-employed workers, totaling €7.6 billion in aid.
The commission said in a June 26 release that the measures are “necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State.” The approved tax measures aim to provide liquidity to businesses and self-employed workers while encouraging the implementation of new sanitary requirements in the workplace amid the COVID-19 pandemic.
Italy plans to provide businesses and self-employed workers with tax credits to support the adaptation of production processes and work environments to the sanitary requirements. It will also provide them with tax credits for rents and leases relating to commercial properties for the period between March and June 2020, depending on revenue levels.
The aid measures also include an exemption from the municipal property tax for touristic properties and from the regional corporation tax for businesses and self-employed workers with annual sales below €250 million for 2019.
According to the release, the four aid measures are part of Italy’s broader €55 billion stimulus package that was announced May 14 to offset the economic effects of the pandemic. Italy, which experienced the first major outbreak of COVID-19 in Europe, has been one of the continent’s hardest-hit countries. The government also extended the due date for some tax payments to September 16.
The commission recently supplemented the state aid rules with the adoption of a temporary framework for providing various types of aid to businesses and industries in the EU affected by the pandemic. The framework was adopted by the commission March 19 and will be in place through December unless the commission determines that an extension is needed.
The state aid temporary framework allows member states to provide companies with direct grants, select tax advantages, and advance payments of up to €800,000 to address urgent liquidity needs. The commission is also allowing aid in the forms of guarantee schemes to support bank loans taken out by businesses; subsidized interest rates for private and public loans to companies; safeguards for banks; and short-term export credit insurance.