instructions on the calculation to verify compliance with the limits and any exceeding

Covid State Aid: instructions on the calculation to verify compliance with the limits and on the consequences in the event of any exceeding in the MEF decree which establishes the rules for submitting the self-declaration. The text was signed last December, and is arriving in the Official Gazette at the beginning of the year.

Covid State Aid: arriving le official instructions on the verification of compliance with limits and conditions provided for the disbursement of concessions and on the modalities of drafting of the self-declaration, based on the provisions of the first Support Decree.

After a long gestation, the Implementing decree of the Ministry of Economy and Finance is coming to the Official Gazette and the MEF announces it with the news published on January 13, 2022.

In the text and in the explanatory report the rules on how make the calculation and check the exceeding the set thresholds and how remedy.

The detailed indications onself-declaration must then be defined by theRevenue Agency.

Covid state aid: instructions on respecting the limits

A draft of the implementing provision of the provisions of article 1, paragraphs 13 to 17, of the decree-law of 22 March 2021, n. 41, on Covid state aid.

The text was then signed on 11 December by Minister Daniele Franco and now, after a long wait, it’s about to arrive Official Gazette, as stated in the announcement published by the Department of Finance on January 13.

They define themselves State aid the transfers of public resources in favor of certain companies or productions which, by attributing a selective economic advantage, distort or threaten to distort competition. They usually are prohibited by European legislation, but to cope with the economic effects of pandemic, was approved on “Temporary framework for state aid measures to support the economy in the current Covid-19 emergency”.

Expected until December 31, 2021, it was extended until the deadline of 30 June 2022.

During 2020 and 2021 a series of concessions, non-repayable contributions and bonuses that fall within this framework.

Since the beneficiaries of emergency measures are required to comply precise conditions and specific limits changed over time, the Sostegni Decree defined the application methods for verifying compliance with the limits and conditions set out in Sections 3.1 and 3.12 and for monitoring and controlling the State Aid recognized from the Relaunch Decree to the Sostegni bis Decree.

Covid State Aid Normative requirements
Cancellation of the IRAP deposit; Non-repayable grants, Tax credit for the adaptation of work environments; Provisions on direct taxes and excise duties in the Municipality of Campione d’Italia; Exemptions from the own-IMU municipal tax for the tourism sector articles 24, 25, 120, 129-bis and 177 of the Relaunch Decree
Exemptions from the municipal tax for the tourism and entertainment sectors article 78, of the August decree
Non-repayable grant to be allocated to VAT operators in the economic sectors affected by the new restrictive measures; Tax credit for rents for non-residential properties and business leases; Cancellation of the second IMU installment concerning the buildings and related appurtenances in which the activities related to specific ATECO codes are carried out articles 1, 1-bis, 1-ter, 8, 8-bis, 9 and 9-bis of the Refreshments Decree
Non-repayable grant to be allocated to the catering services business article 2 of the Christmas decree
Exemption from the first installment of effects related to the IMU 2021 emergency of properties for specific activities in the tourism and hospitality sectors; tax credit for rents for non-residential properties Article 1, paragraphs 599 and 602, of the 2021 Budget Law
Non-repayable contributions; non-repayable grants for start-ups; Further tax relief and rationalization interventions connected to the COVID-19 emergency; Exemption from the payment of the first installment of the municipal tax; articles 1, articles 1-ter, 5 and 6-sexies of the Support Decree
Non-repayable contributions; Tax credit for rents

of non-residential properties and business leases
articles 1 and 4 of the Sostegni bis decree

Covid State Aid: instructions on the calculation to verify compliance with the limits

In the time frame taken into consideration by the MEF Decree on monitoring of State Aid beneficiaries must comply with i limits that follow.

Aid of limited amount – Section 3.1 of the Temporary Framework for State Aid Measures to Support the Economy in the Current Covid-19 Emergency
Type of business Amount Period
Unique enterprise 800,000 euros From 19 March 2020 to 27 January 2021
1,800,000 euros From January 28, 2021 to December 31, 2021
Companies operating in the fishing and aquaculture sector 120,000 euros From 19 March 2020 to 27 January 2021
270,000 euros From January 28, 2021 to December 31, 2021
Companies operating in the sector of primary production of agricultural products 100,000 euros From 19 March 2020 to 27 January 2021
225,000 euros From January 28, 2021 to December 31, 2021
Aid in the form of non-covered fixed cost support – Section 3.12 of the Temporary Framework for State Aid Measures to Support the Economy in the Current Covid-19 Emergency
Type of business Amount Period
Unique enterprise 3,000,000 euros From 13 October 2020 to 27 January 2021
10,000,000 euros From January 28, 2021 to December 31, 2021

These thresholds have been further raised with the extension of the Temporary Framework for State Aid to 30 June 2022.

Aid of limited amount – Section 3.1 of the Temporary Framework for State Aid Measures to Support the Economy in the Current Covid-19 Emergency
Type of business Amount from 31 December to 30 June 2022
Unique enterprise 2,300,000 euros
Companies operating in the fishing and aquaculture sector 345,000 euros
Companies operating in the sector of primary production of agricultural products 290,000 euros
Aid in the form of non-covered fixed cost support – Section 3.12 of the Temporary Framework for State Aid Measures to Support the Economy in the Current Covid-19 Emergency
Type of business Amount from 31 December to 30 June 2022
Unique enterprise 12,000,000 euros

It is essential to have one overview of the limits to be respected in the different periods since it is precisely based on the date on which the tax credit, the non-repayable grant or any other facilitation a more or less high threshold has been made available to the beneficiary.

All ‘Article 2, paragraph 3, of the MEF Decree expected in the Official Gazette, in fact, we read:

“For the purposes of compliance with the different ceilings referred to in paragraphs 1 and 2, the date was made available to the beneficiary, as identified in point 95, second point, of the European Commission decision C (2021) 7521 final of 15 October 2021 “.

And the illustrative report specifies the rules to follow for correctly identify the reference day and verify compliance with the limits of State Aid.

It is necessary to consider:

  • the date of approval of the aid application, if the granting of the aid is subject to such application and approval;
  • the date of presentation of the tax return o the date of approval of the offsetting in relation to tax credits;
  • there date of entry into force of the legislation reference in other cases.

As for the Aid in the form of uncovered fixed cost support it is good to specify that the beneficiary companies in theself-declaration they must indicate not only compliance with the ceilings, but also with following conditions:

  • a decrease of at least 30 per cent the total amount of turnover and fees recorded in the relevant reference period to benefit from the measure compared to the corresponding period of 2019;
  • L’amount of the subsidy required under Section 3.12 must not be greater than 70 percent of fixed costs not covered incurred in the period in which the benefit is due, the percentage reaches 90 percent for micro and small enterprises.

Covid State Aid: instructions on payment in case the limits are exceeded

But what if the exceeding the limits of Covid State Aid foreseen?

The detailed instructions, once again, will have to come fromRevenue Agency. But a first answer to this question is already contained in the MEF decree to be published.

There are three possible roads in the event of non-compliance with the established thresholds:

  • the beneficiary company proceeds to the voluntary return of the excess amount;
  • if that doesn’t happen, there are two alternatives:
    • the amount, to which interest is added, is subtracted from the state aid subsequently received;
    • in the absence of new aid, or in the event that the amount of the new aid is not sufficient to guarantee recovery, the amount must actually be repaid.

In any case, there don’t seem to be any sanctions.

Ministry of Economy and Finance – Ministerial Decree of 11 December 2021
Decree of the Ministry of Economy and Finance laying down procedures for monitoring and control of aid recognized pursuant to Sections 3.1 and 3.12 of the Communication of the European Commission of 19 March 2020 C (2020) 1863 final “Temporary framework for State aid measures in support of the economy in the current emergency from COVID-19 “and subsequent amendments, in implementation of the provisions referred to in article 1, paragraphs 13 to 17, of the decree-law 22 March 2021, n. 41, converted, with modifications, by law 21 May 2021, n. 69.

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