How Italy is Mitigating the Impact of COVID-19 by Embracing Innovative Measures?

A report published by HIS Markit found that the composite measures of private sector activity dropped to 51.6 percent in August compared to 54.9 percent in July. At the same time, the services gauge plunged to just 50.1 percent.

FREMONT, CA: The COVID-19 pandemic outbreak has left all countries scattered in search of a vaccine to cure the virus. The outbreak, which took place in December 2019, spread across the globe within five months and has enforced governments to take strict measures ever since. New norms like social distancing and remote work have become necessary to combat the virus. As Europe continues to battle the pandemic's initial socio-economic impacts, the Euro region economy unexpectedly lost some momentum in August after a sudden resurgence in cases.

A report published by HIS Markit found that the composite measures of private sector activity dropped to 51.6 percent in August compared to 54.9 percent in July. At the same time, the services gauge plunged to just 50.1 percent. The impact of this drop was severely felt in countries like Italy, which was the worst-hit nation in Europe when the first wave of the virus broke out in March. As a result, Italian businesses have sought to introduce new countermeasures to mitigate coronavirus's sustained impact and potentially drive a continued recovery.

Introduction of Law Decree No. 104

One of the primary countermeasures to tackle the virus took the form of Law Decree No. 104, which introduced new tax measures to mitigate the socio-economic impact of the COVID-19 spikes, on August 14. The decree sought to reopen the window for individual and corporate taxpayers to optimize their accounting value or consider the further postponement of specific tax payments.

Overall, the decree allows the Italian corporations and commercial entities to use a bespoke tax regime, based on their current circumstances and the underlying value of their assets. Contrary to previous interpretations of this law, this set of rules will offer far more extraordinary generosity to taxpayers while enabling them more autonomy when accounting for value and extending this to the tax basis.

For instance, the decree adopters can choose to increase the value o any individual business asset, both tangible and intangible, including equity holdings of at least 20 percent coting rights in any ordinary shareholder meeting. This enables companies to make the most of the updated and impermanent tax legislation, although fixed value assets can also be included as part of this process.

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