Corporate Archives - Aiternalex

ENFORCED SALES AND ANTI-MONEY LAUNDERING: A USEFUL REFORM?

29/11/2023/in Corporate/by Sara Brogioni

The so-called Cartabia Reform sought to innovate the civil process with the aim of simplifying, speeding up and rationalising it.

Months after the entry into force of the reform itself, however, it is possible to make an initial assessment of what is actually simplified and what is actually burdened with new burdens.

With regard to forced execution for those who are awarded a property in individual or bankruptcy execution, a new requirement has been introduced, based on the anti-money laundering rules set forth in Legislative Decree No. 231 of 21 November 2007, making the issuance of the transfer decree subject to the verification of compliance with these obligations.

Legislative Decree No. 149 of 10 October 2022 introduced an additional paragraph to article 585 of the Italian Code of Civil Procedure pursuant to which “within the term set for the payment of the price, the successful bidder, in a written statement made in awareness of the civil and criminal liability provided for false or mendacious statements, shall provide the enforcement judge or the delegated professional with the information prescribed by article 22 of Legislative Decree No. 231 of 21 November 2007. 231” and also amended article 586 of the Code of Civil Procedure by providing that the transfer decree can be pronounced on the twofold condition of the payment of the price and the verified “fulfilment of the obligation placed on the successful bidder by article 585, paragraph four”.

The legislation came into force on 1 March 2023 and is therefore applicable to transfer decrees pronounced at the outcome of real estate execution proceedings commenced with attachment completed as of the aforementioned date.

The legislator’s intention is to prevent forced sales from being instrumental in the reutilisation of illicit proceeds, thus filling the legislative gap that existed: before the reform, in fact, case law had been determined to exclude this requirement in executive proceedings, considering that the checks introduced by the anti-money laundering regulations under legislative decree no. 231/07 could not be carried out. Legislative Decree No. 231/07 could not be applied to the delegated professionals and the judge’s assistants since they could not be defined either as clients or executors of the same, nor finally as actual holders of the bank account opened as an account in the enforcement proceedings.

From a strictly operational point of view, however, the new requirement will translate into the adjudicator’s duty to fill in an interview form for due diligence, administered by the delegated professional in order to provide all the information required by Article 22 of Legislative Decree No. 231/2007, self-declaring that he is the beneficial owner of the acquired account and the provenance of the sums functional thereto.

Once this declaration has been acquired, no other fulfilment is placed upon the auxiliary, who will simply have to collect this declaration and file it with the minute of the transfer decree, no subsequent activity being envisaged, nor any obligation to report any anomalous declarations.

The verification of the exact fulfilment of the disclosure obligations is therefore left to the enforcement judge as a condition for the pronouncement of the transfer decree, but it cannot be excluded that he may proceed with a report to the competent authority if he sees any grounds for doing so.

In the absence of such a declaration, therefore, the transfer decree cannot be issued.

However, it is believed that the transfer of the property can only be “delayed” in the absence of the filing of the form, and that such compliance cannot invalidate the purchase in the same way as the non-payment of the balance of the price, which, as is well known, produces the effect of the loss of the deposit and its forfeiture as a fine.

Article 587 c.1 of the Code of Civil Procedure has in fact not been affected by the reform and no consequences have in fact been envisaged for non-compliance with the anti-money laundering verification.

If the successful bidder refuses in full to fulfil this obligation, then it is obvious that the delegated professional will necessarily have to notify the enforcement judge who may order by non-complaint decree the revocation of the adjudication, the return of the deposit and the continuation of the procedure with a new sale under the same conditions as those for which the adjudication was then revoked.

In order not to incur obstructive delays in the transfer of the property, it would be necessary for the defaulting successful bidder to be ordered to pay the difference between the price he offered and the lower price for which the sale took place.

The new requirement could therefore produce more paralysing effects on the procedure than the requirements of simplification, speed and rationalisation of the civil process, which the legislator dictated in Law No. 206 of 26 November 2021.

A guide to the tax advantages of investing in innovative start-ups in Italy

31/05/2023/in Corporate/by Antonio Ferrara

An innovative startup is a type of enterprise characterised by a high technological component and a scalable business model. They are emerging enterprises that seek to solve problems or satisfy market needs in an innovative way, using advanced technologies or new approaches through the implementation of creative ideas.

Innovative start-ups often operate in high-tech fields such as computer science, artificial intelligence, biotechnology, blockchain and more. They are characterised by a strong appetite for risk and investment in research and development to increase products. Moreover, these new companies̀ aim to expand rapidly nationally or internationally by seeking funding.

They play a predominant role in stimulating innovation, job creation and economic development.

Pursuant to the reference legislation (DL 179/2012, Art. 25, paragraph 2) an innovative start-up is a joint-stock company, also established as a cooperative, that meets the following objective requirements

it is new or has been established for no more than 5 years
it is resident in Italy, or in another country of the European Economic Area, but has its production site or branch in Italy
has an annual turnover of less than EUR 5 million
is not listed on a regulated market or multilateral trading platform
does not and has not distributed profits
has as its exclusive or predominant corporate purpose the development, production and marketing of a high-technology product or service
is not the result of a merger, demerger or sale of a business unit

Finally, a startup is innovative if it meets at least 1 of the following 3 subjective requirements

it incurs R&D expenditure of at least 15% of the higher of cost and total value of production;
it employs highly qualified personnel (at least 1/3 PhD, PhD students or researchers, or at least 2/3 with a master’s degree)
is the owner, custodian or licensee of at least one patent or holder of registered software.

Investing in an innovative startup can offer not only the opportunity to participate in the revolution and growth of promising enterprises, but also to obtain significant tax benefits. In this regard, the Italian government has introduced a series of tax incentives to encourage investments in innovative start-ups, with the aim of fostering the development of the entrepreneurial ecosystem and the creation of jobs in the new technology sector. In this guide, we will explore the main tax advantages offered to investors who decide to support these new Italian companies.

De minimis tax incentive for investing in innovative start-ups and SMEs: The incentive provides a 50% IRPEF deduction intended for individuals investing in the venture capital of innovative startups or innovative SMEs. The incentives are granted under the “de minimis” Regulation (Commission Regulation (EU) No 1407/2013 of 18 December 2013).
Tax credit for investments in innovative startups: One of the key measures is the tax credit for investments made in innovative startups. Investors can benefit from a tax credit of 30 per cent of the amount invested, up to a maximum of EUR 1.8 million per year. This means that a significant reduction in income tax can be obtained, effectively reducing the financial risk of the investment.
Capital Gains Tax Exemption: In the event that a capital gain is realised from the sale of units or shares in an innovative start-up, the investor can benefit from a total exemption from capital gains tax. This exemption is a considerable advantage, as investors can keep the full amount of the gain without having to pay tax on their winnings.
Deduction of losses: Investments in innovative start-ups involve a certain degree of risk, but the Italian government has provided a measure to mitigate any losses. Investors can deduct losses incurred by investing in innovative start-ups from their overall income, thus reducing their income tax. This possibility to deduct losses represents an important financial security for investors and may further stimulate interest in innovative start-ups.
Capital Reinvestment Allowances: To further incentivise the reinvestment of capital in innovative start-ups, the Italian government has introduced a measure that allows investors to benefit from a 50 per cent tax break on reinvested profits. In other words, if one realises a capital gain from a previous investment in an innovative startup and decides to reinvest it in another startup, it will be possible to reduce capital gains tax by 50% of the reinvested amount.
Facilitated tax regime for innovative start-ups: Innovative start-ups can benefit from a favourable tax regime that provides for a reduction of the corporate income tax (IRES) rate to 15 per cent for the first three years of activity and to 20 per cent for the next two years. This advantage translates into greater competitiveness for start-ups and caǹ make investing in innovative start-ups even more attractive to investors.

Investing in innovative start-ups in Italy offers numerous tax advantages that can attract more backers. From the IRPEF deduction of 50 per cent to exemptions on capital gains, via capital reinvestment allowances and the favourable tax regime for start-ups, the Italian government has put in place a number of measures to support and incentivise the innovative start-up sector.

Company Crisis: The importance of data

26/04/2023/in Corporate/by Sara Brogioni

With the entry into force of the Code for Business Crisis and Insolvency, the concept of business crisis has been revolutionised, moving from a previous system hinged essentially on satisfying creditors to a new approach that aims to safeguard business activity and business continuity, to allow all companies that have the capacity and possibility to remain on the market.

The new rules place particular emphasis on the fact that any company should be able to anticipate a possible state of crisis and intervene promptly to reorganise it, leaving de facto judicial liquidation as a last resort.

In new regulatory obligations

Article 3 of Legislative Decree 14/2019 (Adequacy of measures and arrangements in function of the timely detection of business crisis) requires the individual entrepreneur to adopt “appropriate measures to promptly detect the state of crisis and to take without delay the necessary initiatives to cope with it” and the collective entrepreneur to “establish an adequate organisational, administrative and accounting structure in accordance with Article 2086 of the Italian Civil Code, for the purpose of the timely detection of the state of crisis and the taking of appropriate initiatives“.

Article 2086 of the Civil Code has been amended to provide that ‘an entrepreneur operating in a corporate or collective form has the duty to establish an organisational, administrative and accounting structure appropriate to the nature and size of the business, also with a view to the timely detection of the business crisis and the loss of business continuity, and to take action without delay for the adoption and implementation of one of the instruments provided by the law for overcoming the crisis and recovering business continuity‘.

The managing bodies of companies and the entrepreneur in general, must therefore take care of the adequacy of the structures, and in particular, the board of directors is responsible for assessing this adequacy, while the auditors are responsible for supervising it.

According to the Court of Cagliari in its judgment no. 188/2021 of 19 January 2022, in which it sets out important guidelines for the verification of such inadequacy, the absence of an adequate organisational structure constitutes a serious irregularity that must be immediately rectified and may lead to the revocation of the administrative body and the appointment of a judicial administrator.

The aforementioned judgement is important in that it focuses attention on the fact that, since such arrangements are functional to prevent the company from facing a crisis, the breach of this obligation is more serious for a company in a situation of financial equilibrium, since it is precisely in such a physiological state that it is necessary to intervene in order to effectively prepare organisational, accounting and administrative measures aimed at intercepting the signs of crisis in a timely manner, thus enabling the company to take the appropriate initiatives.

It will therefore be necessary for every company to put in place a serious planning, programming and management control activity, as a component of the broader administrative-accounting system to meet this requirement. This activity is represented by a set of tools, processes and roles, aimed at favouring behaviours that are in line with the achievement of corporate objectives, facilitating the production of information necessary to make management choices.

The mere purchase of software and management software, if not updated with data entry in a timely manner, has no effect, nor does it cure any breach.

It will therefore be necessary to proceed with a careful analysis of the company, its structure in concrete terms, and on the basis of the concrete reality of the same, to intervene on the introduction of adequate administrative accounting structures, through the introduction of analytical and managerial accounting with ad hoc budget forecasts, production of interim economic, financial and equity situations, obtained starting from the accounting balances suitably integrated with the adjustment entries, to allow the evaluation of the company’s state of health at a given instant, and to allow the evaluation of the company’s continuity.

The core of this activity obviously lies in the data: the collection and availability of up-to-date data, both accounting and non-accounting, and making them available to an ‘interpreter’ in a timely manner, who can perform useful evaluations, is the true strength of a healthy business.

It is clear, therefore, that the subject of corporate crisis is also part of the so-called integrated compliance necessary for the successful operation of any business.

Integrated compliance is, in fact, the set of rules, procedures and organisational structures aimed at ensuring sound business conduct that is fair and consistent with objectives.

The Business Crisis and Insolvency Code, the Organisational and Management Model pursuant to Legislative Decree 231/2001, the legislation on the processing of personal data (so-called privacy) and the legislation on anti-money laundering, for example, are all disciplines designed with a view to prevention that must not only ‘coexist’ but ‘speak the same language’.

The correct collection of data and its proper management is therefore essential for every company.

Downloading pre-printed templates from the web or purchasing management software that is not maintained by anyone within the company will not prove that the company has adequate organisational arrangements and could lead to convictions, even heavy ones, for personal liability of the entrepreneur and directors, and obviously will not prevent a crisis from emerging.

While for large companies such an activity is economically viable, for small companies or the individual entrepreneur such a challenge proves to be arduous, as such an adjustment could cost in economic terms such outlays as to nullify the effort (and paradoxically trigger a crisis).

For small businesses, it will therefore be necessary to educate the entrepreneur by creating ad hoc measures with the available resources.

Can the use of artificial intelligence make up for the financial shortages of small companies? Is it possible to imagine integrated compliance simplification through blockchain technology?

What is certain, for the time being, is that the legislator does not keep pace with technological development and that the reconciliation of the different disciplines is increasingly left to the interpreters and lawyers, who must accompany the entrepreneur every step of the way.

Legal aspects of digital contracts, E-Commerce (Part Two)

19/04/2023/in Corporate/by Giovanni Gaeta

Last week we briefly framed the eCommerce phenomenon and delved into where, how and when a digital contract is deemed to have been concluded.

Among the legal problems addressed last week in connection with digital contracts, one fairly complex problem was deliberately left out for which a separate discussion was necessary, namely, which law is applicable to digital contracts.

WHAT IS THE LAW APPLICABLE TO DIGITAL CONTRACTS?

On the subject of eCommerce, it is necessary in this respect to refer to a variety of regulatory sources, including the Rome Convention and the Rome I Regulation.

The Rome Convention of 1980 on the law applicable to contractual obligations is a convention of private international law that entered into force in Italy on 1 April 1991, following ratification by Law No. 975 of 18 December 1984.

It is in force in all countries of the European Union but has a universal character, as it applies even when the law to which its principles refer is not the law of a contracting state.

Over the years, the ratification of the Convention was followed by the adoption of Regulation (EC) No. 593/2008, known as the ‘Rome I Regulation’, which had the effect, within the European Union, of disapplying the Convention to contracts entered into on or after 17 December 2009.

THE ROME CONVENTION AND DIGITAL CONTRACTS

Assuming that the eCommerce relationships of which we speak are characterised by an international component of the parties involved, for the purpose of identifying the law applicable to international contracts, the Convention indicates three criteria:

the autonomy of the parties;
that of proximity,
that of conservation

The main criterion, party autonomy

The main connecting factor established by the Convention is certainly the will of the parties 1. The autonomy of the parties in choosing which law is applicable to the contract (“choice of law”) is an absolute principle that may also legitimise the use of systems of law that have no connection with the essential elements of the contract or the application of different systems of law to different parts of the contract (“depecage”).

The choice of law is considered to be a legal transaction and may be either expressly deliberated or tacitly identified through the interpretation of the content of the contract or the circumstances surrounding its conclusion. This choice is always modifiable by agreement of the parties but the modification will not produce effects in relation to the possible invalidity of the contract or in relation to possible prejudice to the acquired rights of third parties.

Very relevant to the application of the convention to eCommerce is the regulation in relation to contracts concluded with consumers 2 who may not be deprived of the protection granted to them by the mandatory provisions of the law of the country in which they habitually reside.

Specifically:

if the conclusion of the contract was preceded in the country of the consumer’s habitual residence by a specific proposal or advertising and if the consumer performed in the same country the acts necessary for the conclusion of the contract, or
if the other party or its representative received the consumer’s order in the country of residence, or
if the contract is a sale of goods and the consumer has travelled from his country of residence to a foreign country and placed the order there, provided that the journey was organised by the seller to induce the consumer to conclude a sale;

the law of the country in which the consumer has his habitual residence shall apply.

This rule does not apply in the case of contracts of carriage and contracts for the provision of services where the services owed to the consumer are to be provided exclusively in a country other than that in which he or she is habitually resident, except in the case of contracts providing for combined transport and accommodation services for an overall price.

The residual criteria

To the extent that the law governing the contract has not been chosen, the contract is governed by the law of the country with which it is most closely connected. However, if a part of the contract is severable from the rest and has a closer connection with another country, the law of that other country may exceptionally apply to that part of the contract.

In this regard, it is presumed that the contract is most closely connected with the country in which the party who is to render the performance characterising the contract has, at the time of the conclusion of the contract, its habitual residence or, in the case of a company, association or legal person, its central administration. In contracts involving consideration for services, the characterising nature of services involving the payment of sums of money is excluded.

Furthermore, where the subject matter of the contract is a right in rem in immovable property or the right to use immovable property, the contract shall be presumed to be most closely connected with the country in which the property is situated and, in the case of a contract for the carriage of goods, it shall be presumed to be most closely connected with the country in which the carrier has its principal place of business at the time of the conclusion of the contract if that country is the same as that in which the place of loading or unloading or the principal place of business of the shipper is situated.

Under the preservation criterion, the contract is to be considered fully valid if it satisfies the formal requirements of the law governing its substance or, alternatively, the law of the place where it was concluded.

DIGITAL CONTRACTS UNDER REGULATION (EC) NO 593/2008

As specified above, the ‘Rome I Regulation’ has had the effect within the European Union of disapplying the Convention to contracts entered into on or after 17 December 2009.

While reaffirming the centrality and priority of the parties’ choice of applicable law 3 , the Regulation determined the merely residual nature of the criterion requiring reference to the law of the country with which the contract is most closely connected, setting specific criteria for the various types of contract identified. Hence:

a contract for the sale of goods is governed by the law of the country in which the seller has his habitual residence;
the contract for the provision of services is governed by the law of the country in which the service provider has his habitual residence;
a contract having as its object a right in rem in immovable property or a lease of immovable property is governed by the law of the country in which the property is situated;
However, the letting of a property concluded for temporary private use for a period of no more than six consecutive months is governed by the law of the country in which the owner has his habitual residence, provided that the tenant is a natural person and has his habitual residence in the same country;
the franchise contract is governed by the law of the country in which the franchisee has its habitual residence;
the distribution contract is governed by the law of the country in which the distributor has his habitual residence;
the contract for the sale of goods at auction is governed by the law of the country in which the auction takes place, if that place can be determined;
a contract concluded in a multilateral system that enables or facilitates the matching of multiple third-party buying and selling interests in financial instruments, as regulated by Directive 2004/39/EC 4.

Very special rules are laid down for contracts of carriage since the parties may choose as the law applicable to the contract of carriage of passengers only the law of the country in which: a) the passenger has his habitual residence; b) or the carrier has his habitual residence; c) or the carrier has its central administration; d) or the place of departure is situated; e) or the place of destination is situated.

Furthermore, to the extent that the law applicable to the contract of carriage has not been chosen:

the law applicable to the contract of carriage of goods is that of the country of habitual residence of the carrier, provided that the place of receipt or delivery or the habitual residence of the sender is also situated in that country;
the law applicable to a contract of carriage of passengers is that of the country of habitual residence of the passenger, provided that the place of departure or destination is situated in that country.

In any event, if these conditions are not met, the law of the country in which the carrier is habitually resident shall apply.

Notes:

Art. 3, Law 18/12/1984 n° 975
Art. 5, Law, 18/12/1984 n° 975
Art. 3, Regulation (EC) No 593/2008
Art. 4, Regulation (EC) No 593/2008

Legal aspects of Digital Contracts, E-commerce (Part One)

12/04/2023/in Corporate, Corporate/by Giovanni Gaeta

ECOMMERCE, A BRIEF INTRODUCTION

eCommerce certainly needs no introduction due to its ever-increasing popularity; in 2022, product eCommerce continued its run, albeit at a slower pace (+8%) than in 2021 (+18% over 2020), reaching EUR 33.2 billion. Online purchases of services, on the other hand, completed their recovery path (+59%) and reached EUR 14.9 billion (1) .

Already in its communication of 15 April 1997, the European Commission had realised its scope and had anticipated the times by attempting to frame it by stating that “electronic commerce has as its object the conduct of business by electronic means. It is based on the electronic processing and transmission of information, including text, sound and video-images. Electronic commerce encompasses many different activities, such as buying and selling goods and services electronically, online distribution of digital content, electronic funds transfer, electronic stock exchange trading, electronic bills of lading, tendering and auctioning, collaborative design and planning, online selection of suppliers, direct marketing of goods and services to consumers, and after-sales service’(2) .

The true innovative scope of eCommerce lies in its enabling technology, the web, which was created with the aim of breaking down barriers between people. Among the barriers that the web has had the merit of breaking down are those related to the nationality of customers for businesses; through eCommerce, it is possible to exponentially expand the potential audience of buyers while continuing to work from one’s desk.

ECOMMERCE, LEGAL FRAMEWORK

It has been evident for a long time that this new technology and the ensuing eCommerce phenomenon needed new rules that could better adapt to the dematerialisation of commerce, which is (more or less rapidly) shifting from physical to virtual spaces.

From a purely legal point of view, the dematerialisation of commercial spaces is relevant for several contractual profiles, including:

consent formation (e.g. fully automated consent acquisition through forms);
performance of the contract (e.g. purchase of computer software via download);
Method of payment of the price (e.g. payment by connection to your third-party payment service account. Entering debit/credit card identification data).

These new paradigms have made it necessary for the legal interpretation of the eCommerce phenomenon to attempt to adapt concepts typical of civil law in the area of contracts

WHERE, HOW AND WHEN IS A DIGITAL CONTRACT CONSIDERED CONCLUDED?

Assuming that a contract is concluded at the time when the offeror has knowledge of the other party’s acceptance; that the acceptance must reach the offeror within the time limit set by the offeror; and that where the offeror requires a particular form for acceptance, the acceptance has no effect if it is given in a different form (3) ; we understand at once that the application of these principles requires certain differentiations.

The first major difference relates to the manner in which the parties decide to enter into the contract, distinguishing it into

sale via eMail;
sale via eShop (eCommerce portal).

In the first case, the typical scheme of the presumption of knowledge is deemed applicable, whereby the proposal, acceptance, revocation thereof and any other statement addressed to a given person for the above-mentioned purposes are deemed to be known by that person at the time they reach the addressee’s address, unless the addressee proves that it was unreasonably impossible for him to have knowledge thereof. From the application of this principle, therefore, the extreme usefulness of PEC (certified electronic mail), the use of which has found its way into the legislation of several states for years, has become evident(4).

In the second case, on the other hand, we may consider applicable the typical scheme of the public offer which, if it contains the essential particulars of the contract for the conclusion of which it is intended, counts as a contractual proposal, unless the circumstances of the case or commercial usage indicate otherwise. According to that scheme, the revocation of the offer, if made in the same or equivalent form as the offer, is effective vis-à-vis all, even those who had not been informed of it (5).

In relation to the place of conclusion of eCommerce contracts, the dematerialisation that characterises this peculiar type of contract produces considerable difficulties of interpretation, so much so that there is no single thesis on the matter

According to a first thesis, the contract would be concluded at the place where the offeror downloaded the e-mail containing the acceptance, but this thesis is strongly criticised because it would generate more doubts than certainties in relation to the extreme portability of the instruments through which the exchange of e-mails is possible.

Criticism of the previous thesis, in order to support regions of legal certainty, has led to a second thesis according to which the place of conclusion of the contract must be identified in the place where the service provider containing the proposer’s mailbox is located. However, even this thesis does not produce results that can be considered decisive since, again by virtue of the dematerialisation of the medium in question and the extreme portability of data that characterises the web, it is quite possible that the ‘region’ where the service is ‘hosted’ is not easily identifiable.

For these reasons, a third thesis has emerged that would solve the problem of the place of conclusion of the eCommerce contract by disassociating itself from the relationship with the medium used for its conclusion in order to refer to parameters whose certainty is decidedly solid. According to this thesis, the place of conclusion of the contract would be the place where the business or professional activity of the recipient of the acceptance is based, regardless of the place where the computer or site used is located.

POSTPONEMENT

In this first part, we briefly framed the eCommerce phenomenon and delved into where, how and when a digital contract is considered concluded. In next week’s in-depth analysis of the legal aspects of digital contracts we will take a closer look at which law is applicable to digital contracts, trying to provide all the necessary coordinates to orient oneself in this dimension.

Notes:

https://www.osservatori.net/it/ricerche/comunicati-stampa/ecommerce-acquisti-online-crescita
Community Communication (European Union) 16-04-1997, No COM(97)157
Art. 1326 C.C.
Art. 1335 C.C.
Art. 1336 C.C.

The Affiliate marketing tax regime

22/03/2023/in Corporate/by Antonio Ferrara

Affiliate marketing is a business model whereby a company pays a commission to an affiliate for each sale or action generated through traffic sent from the affiliate’s own website or marketing channel. To be more clear, this is what happens: the affiliate promotes the company’s products or services through its website or through other channels: social media, email marketing or online advertising. If a user clicks on the affiliate’s link and makes a purchase or performs a specific action such as registration, the affiliate receives a commission on the sale or action performed. Affiliate marketing is, therefore, a business strategy of wide-ranging promotion through collaboration with websites or influencers and, at the same time, represents a profit opportunity for affiliate partners.

How to declare it

Flat-rate/simplified scheme

If you are an affiliate and have been granted access to the flat-rate regime, your taxation will be simplified compared to other forms of taxation. In fact, under the flat-rate scheme, taxable income is calculated on the basis of a flat percentage of turnover, without the need to file ordinary accounts.

As regards affiliate marketing, the income to be declared will consist of commissions received by affiliates. These commissions will be subject to the flat rate of 5 % or 15 % provided for by the aforementioned scheme.

As regards filling in your tax return, you will have to indicate, in the section on self-employment income, the nature of the income and the total amount of commissions received. In addition, you will have to fill in the RS box, which contains information on the tax regime adopted and the income to be declared.

In summary, if you are an affiliate and you are registered under the flat-rate scheme, your taxation will be simplified and the income to be declared will consist of the commissions received and subject to the flat rate of 5% or 15%. It is important to bear in mind that, according to the regulations, you cannot deduct expenses incurred for affiliate marketing activities in this status, but the regime does offer certain tax advantages and the possibility of benefits.

Sole proprietorship or partnership

Sole proprietorships and partnerships are further legal regimes that can be chosen, although they are different. In the former case, the VAT number is individual, whereas in the latter there may be one or more partners.

In terms of taxation, on the other hand, the two regimes are the same and we are talking about IRPEF taxation: as income increases, so does the amount to be paid in taxes. There are four different percentages that apply: 23%, 25%, 35% and 43%.

The first percentage is applied to income below 15,000€, the second for income from 15,001€ to 28,000€, the third from 28,001€ to 50,000€ and the fourth for amounts above 50,001€. However, as taxation is graduated, in the case of income of 30,000€, 15% will be calculated on 15,000€ and 25% on the remaining 15,000€.

Sole proprietorships and partnerships therefore allow tax to be calculated on a real margin, which is why the amount to be taxed is equal to the difference between income and expenses.

Remember, too, that you will have to keep track of the expenses incurred for affiliate marketing activities in order to be able to deduct the expenses incurred from your taxable income and reduce the tax payable.

Incorporated companies

If you own a corporation and engage in affiliate marketing, the applicable tax regime will depend on the legal form of the company.

If the company is an Srl (Limited Liability Company) or a SpA (Joint Stock Company), the income generated by affiliate marketing will be subject to corporate income tax (IRES), which currently has a rate of 24%.

The company will have to file a corporate income tax return (UNICO SC form), which contains all information on the income generated by the affiliate marketing, the expenses incurred and the applicable tax credits. In addition, the company will have to file a VAT return relating to the affiliate marketing operations carried out.

It is important to note that corporations may deduct expenses incurred for affiliate marketing from their taxable income. Such expenses include, for instance, advertising costs, website management costs and commissions paid to affiliates. However, deductible expenses are subject to limitations and restrictions and must be precisely documented.

Moreover, if the company transacts with affiliates located abroad, it may be subject to transfer pricing and cross-border transaction tax rules.

Crypto taxation in Italy: yesterday’s and today’s differences

15/02/2023/in Corporate/by Antonio Ferrara

Until today, cryptocurrencies were understood for tax purposes as ‘foreign currencies’, so the norm was to pay the 26% substitute tax on capital gains only for those who held more than €51,000 on their wallets for more than seven working days. Those, however, who were below this threshold were not subject to tax. Now, with the new rule introduced by the budget law, cryptocurrencies are no longer seen for tax purposes as ‘foreign assets’, but rather, as ‘crypto assets’, retaining the taxation regime that applies to what are called financial assets.

The tax authorities, as a result of the new rule, have been very clear: the exchange of crypto assets with each other (crypto to crypto) are not taxed, but apply the substitute tax of 26% on those capital gains realised, i.e. from a sale, if the latter exceeds the new threshold of €2,000. The term capital gain is a term that among us crypto investors is creating some confusion and needs some order: the capital gain is calculated from the aggregate of all transactions made even on different exchanges and, from 2023, also from income from other activities (such as NFT staking, farming, etc.). In addition, a stamp duty of 0.2 % per year is introduced for all crypto holders compared to the old regulation.

What does “cashout” mean?

Cashout means to collect, so the moment we go to cash euros into our account, we will pay the tax; but there is a novelty: if on the exchanges where we hold crypto at some point we convert them to FIAT ( Euro ) we will pay the tax there as well.

How do I reduce the risk of crypto volatility and not have to pay tax?

The simplest and most effective solution to not converting crypto into FIAT right away and going to pay tax is to stay in crypto assets and, therefore, convert the tokens into stable coins, i.e. coins that have a dollar countervalue. Doing so also mitigates the risk of the high volatility by which the crypto asset market is characterised.

2022 tax return compared to the one to come.

As I said before, crypto used to be considered as foreign currencies and therefore one had to go and fill in the RW panel of PF income, as monitoring was mandatory. Otherwise, the RT panel had to be filled in if one went to make cashouts and paid the 26% tax. With the new regulation, the filling in of the RW panel for the monitoring obligation remains unchanged, but the role of intermediaries is changed. If we hold crypto via Italian exchanges, it will be up to them to fulfil their monitoring obligations in comparison with the tax authorities, but if we hold crypto in foreign exchanges or in DEFI wallets, Ledger, etc., we have to fill out the RW panel.

Are NFTs considered crypto assets?

Yes, they are considered crypto assets and belong to the category we have discussed. We draw attention to the fact that they are crypto assets, but different from cryptocurrencies. Let’s take a practical example: if we buy an NFT with Ethereum and then later sell it and receive Ethereum, it is as if we had made a capital gain or loss, so they will be taxable with 26% tax.

Is there a rule to regularise those who have never declared?

Yes, in fact, a rule already exists in our system and is called ‘ravvedimento operoso’; it consists of paying 0.5% per year of the amount already declared in the RW panel, plus any capital gains tax. If, on the other hand, one were to follow the new rule, it would suffice to always pay 0.5 per cent per year of the amount specified in the RW return and add 3.5 per cent of the amount reported in the RW return if other income were present. Finally, one could also take advantage of the revaluation process, which I will try to explain with an example: if in the past I bought Bitcoin for €5,000 and today it is worth €20,000, it is possible to apply the revaluation by paying 14% of the difference between 5,000 and 20,000. This way our tax position will be in order. In conclusion, therefore, capital gains or losses start to be calculated from 20,000 € and not from 5,000 € which would be our purchase price.

Public Announcements and Tenders in Italy: How to get your bearings?

01/02/2023/in Corporate/by Beatrice Puliti

If, when I first started working with public administrations, someone had come along with an essential guide on how to get around public tenders and contracts, I would have been thrilled. With this I certainly do not want to promote a complete working tool (for that there are manuals to devote time to), but rather to outline a road map for those approaching the complex world of the public market.

The MEPA

Starting from the assumption that the purpose of a P.A. is to pursue interests of public importance, it is easy to understand how the market to which it turns must be transparent and strictly regulated, so as to allow anyone who is interested to collaborate according to the principles of equal competition and non-discrimination. It is from this awareness that MEPA (Mercato Elettronico per le Pubbliche Amministrazioni – Electronic Market for Public Administrations) was born, the digital marketplace where the demand of the P.A. and the supply of qualified companies meet, all under the supervision of Consip, which manages exchanges within the platform on behalf of the Ministry of Economy and Finance. As with all purchases and sales, of course, the rules governing them have been differentiated by the legislator on the basis of the value of the goods being traded, which is why certain purely economic subdivisions have been provided for.

Direct contracting

Let us start with the first subdivision, the simplest, the one with the fewest obligations, which allows the parties to have some discretion to the advantage of greater bureaucratic lightness, which translates into greater efficiency: for purchases less than or equal to EUR 5,000.00, there is no obligation to purchase through the electronic system. This, translated into even more practical terms, means that no calls for tender or market surveys will be necessary to identify the ‘right’ supplier. First element to be clarified: 5,000.00 net of VAT or not? The reference value is to be calculated without VAT, which will therefore only be added to the committed amount at a later stage.

The simplified procedure for direct awards

Having said this, the RUP or the Manager who is about to make a purchase within the indicated threshold may approach the supplier he deems appropriate, observing only the rotation principle for the range between 1,000.00 and 5,000.00, while, if below the lower limit, he may also derogate from this principle by offering only a brief justification in the communication. For its part, the supplier may “win” the contract by signing a self-declaration attesting that as an economic operator it is upright and reliable (it has not been convicted of any criminal offences, is up-to-date with the payment of taxes and contributions, has not committed any infringements with regard to health and safety at work and other requirements under Article 80 of the Public Procurement Code).

Our Manager, at this point, will only have to make sure to consult the ANAC register, to check the existence of the Durc at the time of signing, and to verify the subjective conditions or eligibility to contract with the P.A.. The checks referred to in Article 71 of Presidential Decree 445/2000, concerning the existence of the requirements declared in the self-certifications, are compulsory for the P.A. but can also be carried out on a sample basis, always in proportion to the risk and the extent of the benefit.

Once the verifications have been carried out with a positive outcome, the parties may provide for the drafting of the contract in a simplified form, also “by means of correspondence according to commercial custom consisting in an exchange of letters or by certified electronic mail or similar means” pursuant to Article 32, paragraph 14 of the CAP. The only prescribed obligation consists in the insertion, within the contract, of termination clauses in the event of non-existence of the declared requirements, to which may be added the provision of a withholding of the deposit or the application of a penalty not less than 10% of the value of the contract.

Conclusions

In conclusion, I would like to share just one of my personal recommendations aimed at the maximum protection of the managerial positions that must sign public contracts: for each purchase below the threshold that is the subject of this article, it is recommended, however, the formation of small dossiers within which a number of estimates are inserted (ergo market surveys are carried out) to understand whether the price requested by the supplier from time to time identified is in line with the costs of the sector.

Strongly inadvisable, on the other hand, is the splitting of blatantly one-off assignments in order to remain within the described range free of the compulsory tendering requirement.

This constitutes the crystallisation of the essential points of the first public procurement/sales of goods and services band; by virtue of the smallness of the value this was conceived, as already pointed out, in a very linear and simplified manner. In the next article, we will already see how the steps are more closely articulated in relation to the MEPA, both for the practical management of the portal and for the various technical and regulatory requirements that one must be aware of.

Annual Market and Competition Law

02/11/2022/in Corporate/by Jacopo Maria Orsi

Some novelties on the simplification of administrative regimes for companies.

The Annual Market and Competition Law 2021 (No. 118/2022) entered into force on 27 August. In addition to being enacted in compliance with Article 117, paragraph II, letter e) of the Constitution, it is among the objectives included in the NRP, which considers the protection and promotion of competition as essential factors for fostering efficiency and economic growth, removing regulatory obstacles of a regulatory or administrative nature, and ensuring consumer protection.

There are several regulatory interventions, including the extension of powers in the field of antitrust activities, in particular regarding the investigative capacities of the AGCM , the fight against the abuse of economic dependence with reference to the digital sector , the settlement instrument (so-called settlement ) for the closure of investigative proceedings concerning restrictive practices and abuse of dominant position. In addition to these, the Act also contains several provisions aimed at simplifying the administrative activities of individual companies.

In this regard, Article 26 delegates the Government to adopt legislative decrees (within 24 months) in order to identify new administrative regimes for private activities and to simplify and digitally re-engineer the related administrative procedures. The objective appears to be to identify and typify private activities subject to different regimes to eliminate unnecessary administrative burdens in compliance with the principles of EU law on access to service activities and in such a way as to reduce the administrative burden on businesses. For the implementation of this simplification activity, the regulatory provision identifies a number of criteria and guiding principles, including the possibility of delegating a natural person or a self-employed professional to take care of the fulfilments with the public administration, as well as reducing the time of the authorization procedures for the start-up of the business activity.

Article 29 provides for the regulation of the single communication for the creation of a company , reducing from seven to four days the deadline within which the competent administrations are to communicate, electronically, to the interested party and to the business registry office the further definitive data relating to the registered positions.

Dr. Jacopo Maria Orsi

Consult the vocabulary

¹The AGCM may at any time request undertakings and entities in its possession to provide information and to produce useful documents (also outside investigation proceedings). Such requests must indicate the legal grounds on which they are based, must be proportionate and shall not oblige the addressees to admit to an infringement (Article 35 of Law No. 118/2022).

² In order to avoid abuses of economic dependence in the sector, a relative presumption of economic dependence is introduced in the event that a business uses the intermediation services provided by a digital platform that plays a decisive role in reaching end users or suppliers, including in terms of network effects or data availability (Article 33 of Law No. 118/2022).

³ An instrument that allows companies subject to cartel and abuse of dominance investigations to close the proceedings with a settlement, obtaining a reduction of the fine in exchange for an acknowledgement of participation in the infringement. The Authority may decide at any time to discontinue settlement discussions altogether if it considers that their effectiveness is in any case compromised. (Art. 34 L. No. 18/2022).

⁴ Single communication is an IT practice that simplifies the relationship between businesses and the P.A. By turning to a single telematic pole (the Company Registry) with a single procedure, the interested party can fulfil its obligations vis-à-vis the Chambers of Commerce, the Revenue Agency, INAIL and INPS.