“Decreto Semplificazioni” (Simplification Decree) and public tenders: the new features regarding the interventions financed by the so-called PNRR.
On May 31, 2021, Decree Law no. 77 (the so-called Decreto semplificazioni 2021) was approved, which is still being converted into law, regarding the “Governance of the National Recovery and Resilience Plan and initial measures to strengthen the administrative structures and speed up and streamline procedures“.
The Decree contains important innovations regarding energy, construction and, above all, public procurement. Concerning those subjects the regulation is focused to assure the realization of the public work as quickly as possible through a simplified procedure defined within the PNRR.
In particular, the “new” legislation on tenders (Chapter IV-public contracts) provides for exceptions and simplifications regarding the regulations included in the Public Procurement Code and the previous Decreto Semplificazioni (Decree Law no. 76/2020).
On closer inspection, pending the announced revision of the Public Procurement Code, the regulations regarding tenders can be divided into three areas:
a) the first is intended for all tenders;
b) the second is reserved for interventions financed by the National Recovery and Resilience Plan (Piano Nazionale di Ripresa e Resilienza the so-called “PNRR”) and the complementary fund (the so-called PNC);
c) and finally the third provides for a faster procedure for the completion of 10 works deemed to be a priority and strategic for the country that are among the projects financed by the PNRR.
The interventions financed by the PNRR are of considerable importance, also in view of the considerable European funds allocated, for which the Decree establishes a very streamlined discipline aimed at ensuring the rapid and certain completion of the works.
By way of example, the most important aspects concern:
i) the reduction in the timeframe for awarding tenders (art. 48);
ii) the possibility for contracting authorities to award contracts for the design and execution of works on the basis of technical and economic feasibility projects (in practice, the public sector prepares an outline design of the project and the private sector contributes to achieving the objectives set out in the PNRR through its technical know-how) (art. 48);
iii) raising the bar of the qualification criteria for Contracting Authorities and Central Purchasing Bodies in order to guarantee high performance standards (art. 111);
iv) finally, the threshold for subcontracting is increased from 40% to 50% of the overall amount of the contract until October 31, 2021 (art. 49). This aspect provided by art. 49, concerns all public contracts, including those that are not financed by the PNRR. In fact, art. 49 of the decree under review introduces a temporary regime that abolishes the one introduced by Law Decree no. 32/2019 (converted with amendments by Law no. 55/2019) according to which subcontracting could not exceed the threshold of 40% of the total value of the contract, leaving it up to the contracting stations to choose the exact percentage. Now, however, and only until October 31, 2021, the subcontracting threshold will be raised to 50%. Thereafter, and therefore from November 1, 2021, the liberalization process aimed at removing any general and predetermined quantitative limits to subcontracting shall commence by means of the amendment of paragraph 2 of art. 105 of Legislative Decree no. 50/2016.
That said, the most relevant provisions relating to the interventions financed by the PNRR and PNC are reviewed below:
– Art. 47 of Legislative Decree no. 77/2021 “Equal opportunities, generational and gender, in PNRR and PNC public contracts “: the regulation provides for a functional measure for the employment of women and young people, providing that if companies that employ a number equal to or greater than fifteen employees, are awarded contracts relating to works that are part of the PNRR, they shall submit a report on the situation of personnel with reference to the inclusion of women in company activities and processes. This report is invited to the company’s trade union representatives;
– Art. 48 Decree Law no. 77/2021 “Simplifications regarding the awarding of PNRR and PNC public contracts“: the provision allows the possibility of using the negotiated procedure without notice pursuant to art. 63 of Legislative Decree no. 50 of 2016 (in both ordinary and special sectors) without limits of amount for reasons of extreme urgency caused by unforeseeable circumstances, when the application of the terms, including reduced deadlines provided by ordinary procedures may compromise the achievement of the objectives or compliance with the implementation timescales set out in the PNRR as well as the PNC and the programs co-financed by the European Union’s structural funds. In addition, the regulation includes an important clause (already seen in previous regulations: for example, for the EXPO 2015 contracts) that in some ways strongly limits the judicial protection of economic operators taking part in tenders. In fact, there is a reference to art. 125 of Legislative Decree no. 104/2004 (the Administrative Procedure Code), which stipulates that the possible acceptance of an appeal does not entail the “cancellation” of the contract already executed with the winner of the tender and the taking over of the plaintiff, but merely compensation for damages in equivalent terms. Lastly, the provision allows the so-called integrated contract pursuant to art. 23, paragraph 5 bis, of Legislative Decree no. 50 of 2016. This shows the collaboration between the public administration (contracting station), which prepares an outline design of the project, and private economic operators, who contribute to the achievement of the objectives indicated in the PNRR through their technical know-how. This type of procedure also makes it possible to optimize the approval times by providing, among other things, that the technical and economic feasibility project on which the call for tenders is based is always convened at the services conference pursuant to art. 14, paragraph 3, of Law no. 241 of August 7, 1990;
– Art. 50 of Decree Law no. 77/2021 “Simplifications regarding the execution of PNRR and PNC public contracts“: the regulation under review provides for a simplified procedure in the event of delays with respect to the deadlines established for both the executing of the contract and the delivery of the works and any other deadline relating to the adoption of decisions regarding the execution of PNRR and PNC public contracts. In these cases, the manager or the organizational unit referred to in art. 2, paragraph 9-bis, of Law no. 241/1990 exercises the power of substitution within a period of time equal to half of that originally established. The contract, moreover, becomes effective with the stipulation since, art. 32, paragraph 12, of Legislative Decree no. 50/2016 – which imposes the condition precedent of the effectiveness of the contract upon the positive outcome of any approval and other controls set forth by the contracting stations’ rules – does not apply. Finally, further and greater penalties are established in the event of delay for non-fulfillment.
– Art. 53 of Legislative Decree no. 77/2021 “Simplification of the purchase of IT goods and services that are instrumental to the implementation of the PNRR and regarding e-procurement procedures and the purchase of IT goods and services“: the article under review provides a simplified procedure for the purchase of IT goods and services that are instrumental to the implementation of the PNRR and regarding e-procurement procedures and the purchase of IT goods and services above the EU threshold (for those below the threshold the simplified provisions of Legislative Decree no. 76/2020, as amended by the Legislative Decree under review, shall apply), contemplating the possibility of using the negotiated procedure without publication of a notice, pursuant to art. Law no. 76/2020, as amended by the Decree under review), contemplating the possibility of using the negotiated procedure without publication of a notice, pursuant to art. 63 of the Code of Public Procurement for ordinary sectors (and the use of the negotiated procedure without prior call for tenders pursuant to art. 125, of the same Code, for special sectors), in relation to contracts relating to the purchase of IT goods and services, in particular based on the cloud technology, as well as connectivity services, financed in whole or in part with the resources provided for the completion of the PNRR projects, whose contractual decision or other deed of initiation of the equivalent procedure is adopted by December 31, 2026, even where there is rapid technological obsolescence of the available solutions such as to not allow recourse to another awarding procedure.
The law for the adoption of the Semplificazioni bis decree, which is in the process of being published, has brought significant innovations regarding the administrative procedure and authorization of plants for the production of electricity from renewable sources.
Finally, in the session of July 28, the Senate of the Republic, renewing their vote in favour of the Government, definitively approved the bill for the conversion of Law Decree no. 77 of May 31, 2021, the so-called Semplificazioni-bis which was published in the Gazzetta Ufficiale no. 181 of 30 July 2021.
Through the parliamentary work in committee, many changes have been made to the original text of the decree. In addition to the provisions regarding the governance of the Piano Nazionale di Ripresa e Resilienza (PNRR), the decree contains simplification measures that affect some of the sectors covered by the PNRR, including the sector of energy production from renewable sources. On this subject, a brief overview of the main interventions is provided below.
The provisions contained under articles 17-29 have two main objectives:
– to integrate the discipline envisaged for the environmental assessment (valutazione ambientale) of projects in the Piano Nazionale Integrato per l’Energia e il Clima (PNIEC) in order to include the assessment of projects for the implementation of the PNRR.
– the simplification of the VIA (Valutazione di Impatto Ambientale) and VAS (Valutazione Ambientale Strategica) regulations provided for in Part Two of the Codice dell’ambiente (Legislative Decree 152/2006). In this respect, Articles 19, 20, 21 and 23 modify the procedure of the procedure of verification of subjectivity to EIA and prior consultation and provide for the acceleration of the procedure through the reduction of the time limits. Articles 22 and 23 provide for a number of amendments to the discipline of the procedure for issuing the PAUR (provvedimento autorizzatorio unico regionale).
Chapter VI (Acceleration of procedures for renewable sources) and Chapter VII (Provisions regarding energy efficiency) have taken steps in particular in the areas of Component 2 of the PNRR (“Energy transition and sustainable mobility”), and with regard to renewable energy sources (“FER“), the aim is to increase the quota of energy produced from FER sources in the system, in line with European and national decarbonisation objectives, the upgrading and digitalization of network infrastructures to accommodate the increase in production from FER and the increase in resilience to extreme climate phenomena.
Article 30 amends the regulation of authorizations for the construction of electricity production plants powered by renewable sources located in neighboring areas, i.e. bordering on areas protected by landscape legislation.
Article 31, which is very substantial and innovative, contains various provisions aimed at simplifying the authorization process – and thus encouraging the development – of storage systems and photovoltaic plants: among the issues addressed, stand-alone electrochemical storage systems are excluded from the need for environmental impact assessment, it is provided that for the construction and operation of photovoltaic plants with a power up to 20 MW located in areas of industrial, productive or commercial use and also in landfills or quarries, the simplified authorization procedure (procedura abilitativa semplificata) applies. Moreover, the installation of solar and thermal photovoltaic panels on the roofs of buildings is permitted without the prior acquisition of administrative acts of consent.
Articles 31-bis and 31-ter deal with the issues of biofuel and biogas plants.
Article 31, paragraph 5, admits to the incentives agricultural solar plants that adopt integrative solutions, continuing the approach of Law Decree no. 76/2020 (so-called “Semplificazioni”) which had granted incentives to plants built on areas declared sites of national interest, landfills and quarries. During the examination in the Camera dei Deputati, the requirement for vertical installation has been eliminated and it has been specified that such solutions must be innovative and that the modules must be elevated from the ground and in such a way as not to compromise the continuity of agricultural activity.
Article 32 modifies and completes the discipline on the autorizzazione unica for FER plants in order to introduce certain simplifications for modification works involving a small increase in power (repowering).
Also of interest is Title VI of the decree at stake, which introduces some amendments to Law No 241 of 7 August 1990, the general rules on administrative proceedings, particularly with regard to the inertia of the administration, the formation of silence assent and the reduction of the time limit for the exercise of the power to cancel ex officio.
In the coming weeks, the Energy Team of our Firm will present you with an analysis of the new legislation.
Mark to market and probabilistic scenarios in interest rate swap contracts: are they essential elements of the cause of contract?
Recently, the courts of first instance issued a number of judgements which, in contrast with the previous approach of the Joint Divisions of the Court of Cassation, have held that the MtM value, pricing models and probabilistic scenarios are not essential elements of the cause of a swap contract (among others, see Court of Bologna, 5 January 2021, no. 24725; Court of Parma, 8 February 2021, no. 293; Court of Milan, 22 March 2021, no. 2399; Court of Milan, 14 April 2021, no. 3055).
Indeed, by decision no. 8770 of 12 May 2020, the Joint Divisions of the Supreme Court, on the basis of a previous approach established by the Court of Appeal of Milan in September 2013 (decision no. 3459 of 18 September 2013), held that the MtM and the probabilistic scenarios are integral part of the contractual cause of OTC derivative contracts. According to this questionable approach, the lack of information about the MtM value and probabilistic scenarios would result in the nullity of the contract due to the lack of cause, since in the absence of such information the counterparty would not be able to assess the risk underlying the derivative contract and only contracts with a risk that may be rationally quantified are allowed by law (the theory of the so-called “rational risk”).
Leaving aside the problems that such an approach may create as it introduces a form of retroactive contractual nullity, in the absence of specific duties of information on the intermediaries (on which please see the previous comments Derivati OTC prima parte and Derivati OTC seconda parte), we instead look favourably on the subsequent interpretation of the courts of first instance that depart from the questionable theory of the “rational risk”.
– Thus, the Court of Bologna (decision of 5 January 2021, no. 24725) defined the “rational risk” as “obsolete and outdated” and recognizes that the MtM intended as an estimate of the present values of the differentials exchanged between the parties at a certain date is not so relevant, but rather the elements for its calculation are important and should be mentioned in the contract (i.e., the notional amount, reference parameter for the calculation of the floating interest rate, the fixed rate, the dates of payment of differentials, duration of the contract and maturity). The mathematical formulae adopted to price the derivative (so-called pricing models) are standard operating practice for OTC derivatives and do not constitute an essential element of the contract, nor have the calculations made on the basis of the pricing model ever been contested by the counterparty in the case at hand.
– The Court of Parma (decision of 8 February 2021, no. 293) held that the principles of rational risk identified by the Joint Divisions in 2020 would be applicable only to contracts entered into with local authorities for specific protection needs that cannot be found in relations between private parties. The court also departed from the principles indicated by the Joint Divisions. The Court believes that the MtM is not an essential element of the contract, since that value constitutes neither the object of the IRS contract nor its cause (which is to be found in “the exchange of differentials calculated on a certain notional amount at a certain date“). The MtM represents the value to replace the derivative at a certain point in time, i.e. the cost at which a party can terminate the contract early so as to become its market value at a certain date.
– According to the Court of Milan (decision of 14 April 2021, no. 3055, and decision of 22 March 2021, no. 2399) the MtM is the value of the contract based on the estimated value of future cash flow trends at a given date. It therefore corresponds to the theoretical market price that a third party would be willing to pay to take over the contract. Consequently, it is not a cost necessarily paid for by the customer, and as a result cannot be qualified as an essential element of the contract within the meaning of articles 1325 and 1418 of the Civil Code, but an element which is only possibly relevant. The detachment from the theory of rational risk is evident in the judgment of 14 April 2021, also on the subject of probabilistic scenarios, where the Court recalls the well-known orientation of the Supreme Court (decision nos. 26724/2007 and 26725/2007) that with fascinating clarity in 2007 excluded the nullity of contracts concerning financial instruments in the event of breach of the rules of conduct by the intermediary in the provision of investment services.
In conclusion, notwithstanding the fact that the Joint Divisions crystallized the “outdated and obsolete” theory of rational risk, there is a significant and subsequent case law approach by the courts of first instance which rule out that the MtM and the probabilistic scenarios are essential elements of the contractual cause.
Can the debtor be released from the obligation to pay double the deposit?
As it is well known, the deposit is one of the contractual clauses which are most commonly used to regulate the effects of non-performance. The mechanism provided for in Article 1385 of the Italian Civil Code is simple: at the time of conclusion of the contract, one party gives the other a sum of money, the amount of which is agreed between the parties. The Court of Cassation overturned the decision of the Court of Appeal, which had held that the mere fact that the promising buyer had accepted the return of the cheque without raising any objection could imply – per se – the termination of the contract and therefore the implicit waiver of the claim of double the deposit.
According to Article 1385 of the Civil Code, in the event of performance, the amount paid by way of deposit must be returned or set off against the performance due; whereas, in the event of non-performance:
– if the party who has given the deposit is in default, the other party may withdraw from the contract, retaining the deposit;
– if the party who has received the deposit is in default, the other party may withdraw from the contract and claim double the deposit.
This straightforward mechanism – adopted mainly in the case of the conclusion of a preliminary contract – has not failed over time to create problems of interpretation and application. Consider the relationship between the exercise of the withdrawal with retention of the deposit and the exercise of the ordinary action for termination with claim for damages (Supreme Court of Cassation, Joint Sections, 14.01.2009 no. 553) or the possibility or not of the judge to reduce the amount of the deposit, by analogy with the provisions of Article 1384 of the Civil Code on the subject of penalty clause (an issue that has even required the intervention of the Constitutional Court, ord. 13.10.2013 no. 284 and ord. 26.03.2014 no. 77).
Now, in a very recent case, the Court of Cassation (Court of Cassation, 12.07.2021 no. 19801) has again dealt with the issue of the application of the deposit.
In a preliminary contract for the sale of a property, the promising seller, only four days after the conclusion of the contract, informed the promising buyer that he no longer wished to sell the property and returned the cheque paid as a deposit. On that occasion, the promising buyer took back the cheque, without making any objection or other claim. Subsequently, however, the promising buyer informed the other party of its withdrawal and demanded payment of double the amount of the deposit and, therefore, of an additional amount (and of equal value) to that of the cheque.
The Court of Appeal of Brescia found in the conduct of the promising buyer (who took back the cheque without raising immediate objections) an implied acceptance of the promising seller’s conduct. Consequently, according to the Court of Appeal, the contract was dissolved by mutual consent, with the consequence that the promising buyer was entitled only to the return of what he had paid.
As mentioned above, in fact, Article 1385 of the Civil Code allows the parties not to exercise the right to withdraw from the contract and to apply the ordinary rules on termination; and in the event of termination the effect is simply the return of the sums received and not the payment of a further amount (except for damages which, however, the Court of Appeal did not recognize in this case).
In conclusion, according to this reasoning, with the return of the cheque the very prerequisite for being able to obtain the deposit had ceased to exist.
The Court of Cassation set aside the second instance decision. It held that the mere fact that the promising buyer had accepted the return of the cheque without raising any objection could not in itself imply a waiver of the claim – based on the clause provided for in the preliminary contract – to obtain double the amount paid.
In order to be able to effectively ascertain such a waiver, a clear and unequivocal manifestation of will to that effect is instead required; which, in the present case, has not been proved or even assessed in court.
In other words, the debtor cannot independently and unilaterally release itself from the obligation imposed by the deposit, even if it changes its will at a very short distance from the conclusion of the preliminary contract and even if there were valid reasons – and no such reasons were established in the present case – for not concluding the final contract.
Is it possible to make an oral complaint about a defective product?
It’s certainly possible and, in fact, it has been already the case for a long time.
First things first. This rule is among the most well-known to give effect to the guarantees arising from the contract of sales: in case of defects in the item purchased (or, lack of conformity, for the Consumers), the action needs to be raised within a specific period of discovery of the defect: eight days, if the agreement is regulated by the Italian Civil Code (article 1495, 1 c.c.), two months if the contract is governed by the Italian Consumer Code (article 132, 1 C.d.C.).
According to established case law, the complaint can be made without particular formality or specific procedure and “… it could be made using any possible means of communication …” (see Court of Rovigo 05.02.2021) without being necessary to formalize the complaint “… with a specific and analytic summary of the defects of the item …”, in fact the buyer is entitled “… to limit the complaint to just a generic and brief communication with the vendor …” (recently see Court Vibo Valentia decision 24.02.2021 – also Court Imperia 03.02.2021). Regarding the timeliness of the complaint, the burden of proof is on the buyer.
Is a telephone call enough?
It would seem so, at least according to an historical and not well-known decision of the United Sections of the Italian Supreme Court, according to which the complaint about the defect can be made by any suitable method of communication “… and so also though a telephone call …”, unless otherwise specified (see United Sections of the Italian Supreme Court 15.01.1991, n. 328 published in Mass. Giur. It. 1991); this decision is in line with jurisprudence from the 1970’s (see Supreme Court 77/2092).
It is important to note that, using this kind of process, some problems may arise in terms of proof of the complaint since, as previously mentioned, the buyer has to demonstrate that, according to the law, the complaint about the defect was made on a particular date and at a particular time; in addition, telephone calls are not always made in the presence of a witness.
So, ok for oral complaints, but it is always better to formalize the process in writing.
Amendments and additions to the Code of Crisis and Insolvency (Part Two).
While we wait to see whether the announced entry into force of the Code of Crisis and Insolvency (“Code”) will actually take place next September, we continue to examine the innovations introduced by Legislative Decree no. 147 of October 26, 2020 (“Decree”).
In particular, in this second part, we will deal with the innovations regarding agreements in execution of certified reorganization plans, restructuring agreements with extended effects, the execution of the, execution of consumer debt restructuring plans and in-court composition with creditors.
In any case it is very likely that the legislator will intervene with new corrective measures, especially with regard to the warning measures and the crisis indicators. Indeed, the newly appointed Minister of Justice has identified a commission of experts to possibly calibrate proposals for amendments to the Code that take into account the impact that Covid-19 has had on the economic performance of companies.
We point out the following changes:
Agreements in execution of certified reorganization plans
As regards the arrangement of a certified plan, the purpose of the plan must be to allow the company to be restructured by rebalancing its economic and financial situation.
The plan must be dated and must indicate: a) the economic, equity and financial situation; b) the main causes of the crisis; c) the strategies of intervention and the timeframes required to ensure the rebalancing of the financial situation; d) the creditors and the amount of the credits for which renegotiation is proposed and the state of any negotiations, as well as the list of other creditors not part of the plan, the resources allocated to satisfy creditors e) the new finance; f) the timescale for implementing the plan and, in the event of a discrepancy between the aims and the current situation, the instruments to be adopted; g) the business plan and its impact on the financial plan.
A professional must certify the truthfulness of the data and the economic feasibility of the plan.
The plan, the certificate and the agreements concluded with creditors may be published in the Companies’ Register at the request of the debtor, whilst the deeds and contracts entered into in implementation of the plan must be proven in writing and must have a certain date.
Restructuring agreements with extended effects
Notwithstanding the non-liquidating nature of said agreements, the possibility that creditors may be satisfied to a significant or prevalent extent by the proceeds of business continuity is no longer envisaged in the current wording.
Execution of consumer debt restructuring plans
The Decree has also affected the methods of executing the plan.
The Organism for the crisis and Indebtedness Composition “OCC” supervises the correct implementation of the plan and resolves any difficulties by submitting them to the judge when necessary.
It is foreseen that the debtor may initiate competitive procedures for the sales foreseen by the plan with methods of publicity such as to ensure the maximum information and participation.
The OCC must prepare a six-monthly report to the judge on the state of execution of the plan.
In addition, payments and acts of disposition of assets carried out in violation of the plan are ineffective in relation to creditors prior to the time of publication of the decree of admission of the proposal and plan in a special area of the website of the court or the Ministry of Justice.
At the end of the execution, the OCC is required to prepare a final report to be submitted to the judge, following which the OCC’s fees are paid.
The judge has the power to indicate the actions necessary for the execution of the plan and a deadline for their completion if the plan has not been fully and correctly executed.
In-court composition with creditors
The corrections introduced by the Decree regarding the in-court composition with creditors are numerous and significant.
It is envisioned that the debtor, in the event of a in court composition with creditors as a going concern, together with the proposal for the composition and together with the documentation envisaged by article 39 of the Code, must also present the business plan with an indication of its effects on the financial plan.
There are also some novelties with reference to the performance of acts in excess of ordinary administration provided for by article 94 of the Code. In this regard, the decree provides that the court, in urgent cases, having heard the court-appointed trustee, may authorize the sale and leasing of the company, company branches without advertising and without competitive procedures when this may irreparably compromise the creditors’ interest.
There are also some changes regarding the discipline of pending contracts.
Firstly, the prohibition of covenants contrary to the provisions of art. 97 of the Code is introduced, which stipulates that contracts that are unexecuted or not fully executed continue during the arrangement. The debtor may request an authorization to stay performance or terminate the contract by submitting a separate application. Between the date of notification of the application and the date of the authorization issued by the court, the other party to the agreement may not request performance nor terminate the contract.
Other innovations regard leasing contracts and bank loans with reference to pending contracts; super priority loans authorized; the operations and report of the court-appointed trustee with the provision that the report has to be sent to the public prosecutor; the revocation of the in-court composition and the opening of the judicial liquidation as well as the provisional admission of disputed credits.
If you are interested in the first part: Amendments and additions to the Code of Crisis and Insolvency (Part One)
The third and last part will deal with the changes regarding: claw back actions, the procedure for ascertaining liabilities, fresh start notion, the register of crisis managers and, finally, the organizational structures of companies.
The Revenue Agency reiterates the restrictive interpretation regarding the tax treatment of employees who returned from abroad due to the pandemic and are remotely working from Italy.
With the reply to a ruling request no. 458 of last July 7, the Revenue Agency again takes a position on the tax treatment of employees remotely working from our country due to the pandemic that under normal conditions would have worked from abroad: according to the Revenue Agency their physical presence in Italy is relevant for the purposes of both the tax residence and the territoriality of the employment income.
The case concerns workers who are ordinarily posted to China but who during the pandemic worked from our country for the Chinese employer.
Their stay in Italy was in some cases longer and in others shorter than 183 days in the tax period.
With respect to those who remained in Italy for less than 183 days (and who are not considered resident for tax purposes in Italy), the Revenue Agency considers the income from employment as Italian-sourced income and subject to tax pursuant to article 23, paragraph 1, lett. c), of the Income Tax Code since the work was carried out in Italy.
The Revenue Agency reiterates what was already expressed during Telefisco 2021 according to which the position of the OECD Secretariat aimed at neutralizing the tax consequences of the restrictions due to the pandemic applies only in case of specific administrative agreements concluded by Italy (such as those with France, Switzerland and Austria).
For those whose presence exceeded 183 days, the Revenue Agency concludes that they are resident for income tax purposes in Italy pursuant to article 2 of the Income Tax Code since for the tax residence in Italy “is irrelevant that the presence of the individual in our country is dictated by reasons related to the pandemic”.
According to the Revenue Agency, the absence of intent to stay in Italy may be evaluated in interpreting the criterion of habitual adobe which is a tie-breaker rule in tax treaties and that in the event of conflict of residence “offers an assessment over a sufficiently long period of time to neutralize the effects of transitory situations”.
With respect to the Italian residents the Revenue Agency confirms the impossibility to apply the so-called conventional remuneration pursuant to article 51, paragraph 8-bis of the Income Tax Code already expressed with the reply dated 17 May 2021 no. 345 since this rule applies in case of work carried out abroad and does not allow to evaluate the reasons why the worker was unable to perform the service from abroad.
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