The latest Emergency Decree has introduced a series of initiatives of economic nature to deal with the Covid-19 pandemic, including the attempt, perhaps only partially successful, to facilitate, through tax benefits, the collection of goods and funds, to support activities aimed at containing the current epidemiological emergency.
These measures enrich and integrate the fragmented and incoherent outline of tax benefits, introduced in recent years in order to encourage donations, both in cash and in kind, in favor of organisations engaged in activities of social interest.
The most important provision is Article 66 of Cura Italia Decree, which has strengthened the already existing favorable tax regime for contributions to public bodies, volunteer associations, and operators generally involved in natural disasters.
For individuals, Article 66 has introduced a deduction equal to 30% of the amount donated (up to € 30,000), in case of donations made in 2020 in favor – not only of entities legally registered with social purposes, but also – of a series of legally identified entities (such as the State, Regions, local and regional authorities, hospitals, etc.) if aimed at financing interventions in the containment and management of the current emergency situation.
Instead, for holders of business income, the provision has recognized the full deduction (with reference to direct taxes and IRAP) of donations, in cash and in kind, made in 2020 with the specific purpose of facing the epidemiological emergency. The rule operates in accordance with the provisions already applied in cases of public calamities and other extraordinary events (in line with the provisions of Article 27, Law 133/1999), in favor of players called upon to operate in such an emergency situation, including ONLUS and other entities operating in the non-profit sector.
By referring to previous legal parameters (i.e. Articles 3 and 4 of the Decree of the Minister of Labour and Social Policy of 28 November 2019), Article 66 appropriately clarifies which criteria to follow for assessing the value of contributions made in kind, making reference to (i) the normal value of the asset donated pursuant to art. 9 of TUIR; (ii) the residual tax value of the capital goods granted; or, residually (iii) assessment by expertise for donations in kind of more than Euro 30,000 or indeterminate amount.
Donations in kind, regardless of their value, can bring several tax issues for the paying companies. In fact, free transfer of goods related to the business activity are generally relevant both for the purposes of direct taxes (in line with Article 85, paragraph 2 TUIR) and VAT.
Actually, while the problem concerning Ires has been resolved by the legislature by reference to Article 27 of Law No 133/1999, which expressly provides that payments, for Covid purposes, do not form part of the taxable income, instead, no provision has been made for VAT.
For these reasons, donations in kind may be subject to VAT or, alternatively, if they are intended for the entities referred to in Article 10, paragraph 1, no. 12 of Decree 633/1972 (such as ONLUS, public bodies, etc.), they may be exempt from tax, but with the consequence of the non-deductibility input of VAT.
This regime, which is not entirely favorable to the donor, is derogated when donations concern specific categories of goods no longer saleable, which would be subject to destruction, following a procedure, that is not free of formal requirements and burdens for the company (in line with Article 2 of Presidential Decree 441/1997).
As an alternative to disposal, in fact, under the pre-coronavirus rules, companies could proceed ‘to destruction’ by free transfer (irrelevant for the purposes of direct taxes and outside the scope of VAT, with full deductibility of input tax) to certain non-profit bodies, almost exclusively of surplus food and medicines products, no longer suitable for sale (under Article 16 of Law 166/2016 and Article 6(15) of Law 133/1999).
In this context, the emergency legislator has intervened with various and discontinuous provisions, widening considerably the goods categories, always and however characterized by the non-saleability, whose free transfer is equivalent to destruction for VAT purposes.
Now, computers, books, clothing and other categories of goods expressly listed in the first paragraph of Article 16, paragraph 1, Law no. 166/2016, can be disposed of by way of free transfer.
Actually, in this current crisis situation, we cannot endorse the legislator’s choice not to extend, in general terms, at least for 2020 or for donations for Covid purposes only, the possibility of considering destroyed, through way of free transfer of goods (in any case, subject to specific constraints, both subjective, with reference to possible beneficiaries, and procedural), regardless of their saleability.
Fiscal discipline of cash donations is plainer. Likewise all cash donations, benefits under Article 66, are required to be granted by way of traceable payment. For the purpose of tax advantage, the relative donation certificate must be retained.
Above tax benefits have encouraged some companies to promote fundraising aimed at supporting containment measures to face the epidemiological emergency (both directly, by inviting donors to make donations to dedicated bank accounts opened by the Civil Protection pursuant to Article 99 of the Italian Healthcare Decree, and by acting as intermediary collectors of the donation), in spirit of solidarity and for reputational purposes too.
Others, instead, – in particular private citizens – joined in fundraising campaigns through online platforms, so-called crowdfunding platforms. Such a fundraising system is regulated for venture capital only (see Consob Regulation no. 18592/2013), while it still lacks legislative discipline for the others purposes and left to the self-regulation by the platforms themselves.
Although these types of indirect fundraising represent a considerable opportunity for third sector operators and, in general, an easy means of raising capital for solidarity purposes, they present some critical aspects, essentially due to the lack of specific rules.
First of all, it must be assessed whether donations fall within the scope of art. 66 of the Italian Health Care Decree.
Firstly, the Care Italy Decree, where it refers to art. 27 of Law no. 133/1999 (art. 66 of Care Italy Decree), seemed to limit benefits to donations made in favour of or through subjects identified in a specific list, (e.g. Onlus, public bodies, etc.). This interpretation was confirmed by the Tax Authority in Guideline No. 8/2020.
The above mentioned provision made it doubtful whether donations could be facilitated, even if intended to support anti-covid measures, but collected through entities not included among those indicated by the combined provisions of Article 66 of Law Decree 18/2020 and 27 of Law 133/1999 (such as, for example, joint-stock companies).
The above mentioned uncertainty seems overcome by Resolution no. 21/2020 and Guideline no. 11/2020, which endorse pro-covid donations interpretation, by including among the intermediaries through which donations can be facilitated, also third party collectors and, in particular, crowdfunding portals, subject to strict formal constraints (capable of demonstrating the concrete destination of the sums collected) in order to allow donors to benefit from the above mentioned tax benefits (applicable to the amount of the donation net of any commission applied by the intermediary).
Fundraising campaigns through web, as well as through crowdfunding, are attractive both for the organizer of the collection and for the beneficiary, allowing great results in terms of resonance and also in terms of the amount of capital raised, but they must be carried out carefully, also from a formal point of view, in order not to compromise the tax benefits provided by the legislator in favour of the funders.
 Basically, likewise for liberal ETS payments.
 The only exception are medicines for compassionate use which, under Art. 27 of the Liquidity Decree, if supplied free of charge, are considered destroyed for VAT purposes.
 see art.16 Law 166/2016.
Author: Dott. Mario Manfredi – Dott. Paolo Visconti
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