The recent Italian Tax Decree 2020 (Decree-Law no. 124 of 26 October, 2019, converted into Law no. 157 of 9 December, 2019, containing "Urgent provisions on tax matters and for undeferrable needs", published in the Official Journal no. 301 of 24 December 2019) has introduced interesting and important innovations in the field of supply service agreements and management of the employment relationships of employees involved in the execution of the agreements themselves.
The impact of the new legislation on employment relationships has already been the subject of clarification by the Italian Revenue Agency, which, by means of Resolution no. 108 of 23 December, 2019, provided clarification on the procedure for applying the new rules.
Among the main innovations, Article 4, paragraph 1, of the Tax Decree, after Article 17 of Legislative Decree no. 241 of 9 July, 1997, inserts Article 17-bis (Withholding taxes and compensation in supply service agreements and subcontracts and extension of the reverse charge regime to combat illegal staff leasing), also establishing, in paragraph 2, that the provisions of paragraph 1 "shall apply from 1 January, 2020."
Article 17-bis introduces for principals of works or services for a total annual amount of more than 200,000, "by means of agreements for the supply of services, subcontracting, entrusting to consortia or negotiating relationships however denominated, characterized by the prevalent use of labour at the principal's places of business with the use of capital goods owned by the latter or attributable to it in any form", the obligation to request a copy of the payment delegation relating to the payment of withholding taxes "withheld by the contractors (i.e. "appaltatrice" o "affidataria") and subcontractors from the workers directly employed in the execution of the work or service. The payment of the withholding tax referred to above shall be made by the contractor and the subcontractor, with separate delegations for each principal, without any possibility of compensation."
In order to allow the principal to verify the total amounts paid by the companies, paragraph 2 also provides that "within five working days after the expiry of the payment referred to in Article 18, paragraph 1, the contractor and the subcontractors shall send to the principal and, for subcontractors, also to the contractor the delegations referred to in paragraph 1 of this Article and a list of all workers, identified by means of the...