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17.012020

New Italian Law Provision applicable to the service contracts

We would like to inform you that as from January 1st, 2020 new tax obligations have been introduced on companies involved in procurement – services contract and subcontracting contracts.

In detail, on the basis of the aforementioned law provision, the Principal of such contracts shall:

  • require to each supplier and sub-supplier the delivery of the so called F24 proving the payment of the taxes and social security contributions due for all the employees involved into the service contract;
  • require to each supplier and sub-supplier to be provided with a file summarizing all the information necessary to carry out the verification of the correctness of the payment made;
  • verify the correctness of the calculation made by each supplier and sub-supplier of the taxes and social security contributions due for all the employees involved into the service contract.

On the other hand, each supplier or sub-supplier shall:

  • make the payment of the taxes and social security contributions due for all the employees involved into the service contract;
  • within 5 working days from the payment, provide the Principal with a file summarizing all the information necessary to carry out the verification of the correctness of the payment made and with the so called F24 proving the payment of the taxes and social security contributions due for all the employees involved into the service contract.

The client companies, on the other hand, will have to:

  • request the contracting company for a copy of the payment proxies relating to the payment of the withholding taxes made on the remuneration of the workers directly employed in the contract or labor intensive contractual relationship;
  • suspend the payment of the fees accrued in the event of non-transmission or for omitted or insufficient payments up to 20% of the total value of the work or for an amount equal to the amount of unpaid withholding taxes, notifying the Revenue Agency by 90 day deadline.

However, companies in possession of a specific certification issued by the Italian Revenue Agency may be exempted from the aforementioned obligations. In order to obtain such certification, a company should:

  • be in business from at least 3 years;
  • be compliant with all the fulfilments and declarations provided by Italian law (e.g. IRAP, VAT, withholding taxes);
  • have made, in the last three years, payments of taxes equal to an amount of at least the 10% of the volume of revenues resulting from the tax declarations;
  • have no ongoing executive assessments or debit notices in relation to taxes, IRAP and social security contributions exceeding EUR 50.000,00.

We remain, as usual, at your complete disposal for any further clarifications you may need.