Among the various forms of support for companies introduced in 2020, those relevant to liquidity and capitalisation are the most significant. The 2021 Budget Law includes, with amendments, some of the temporary provisions introduced with the so-called “Relaunch” Decree aimed at supporting the recapitalisation of joint-stock companies, as well as those introduced with the so-called “Liquidity” Decree aimed at suspending the obligations provided under the Italian Civil Code for joint-stock companies with reference to share capital losses and the relevant causes of dissolution due to share capital reductions below the minimum threshold provided by law.
Again, with reference to the recapitalisation of companies, it is also worth mentioning the extension provided under Budget Law for 2021 as concerns the application of the revaluation and realignment provisions, allowing - through the application of the norms introduced by Law Decree no. 104/2020 - to intervene also on goodwill and on other intangible assets posted in the Financial Statements at 31 December 2019.
Talking about the measures supporting the recapitalisation of joint-stock companies, para. 263, art. 1 of the Budget Law includes the incentives already contained in art. 26 of the “Relaunch” Decree. In particular, the following provisions have been extended:
Financial instruments are refunded after six years from the subscription. The issuing company commits itself not to resolve until the distributions of reserves and the purchase of own shares have been refunded, and not to proceed with the refund of shareholders’ loans.
As far as the suspension of the provisions of the Italian Civil Code regulating share capital reductions is concerned, art. 1, para. 266 of the 2021 Budget Law includes a new version of art. 6 of the so-called “Liquidity” Decree, with a wider scope of application.
In this case, the new provision is confirmed, according to which the requirements under the Italian Civil Code for companies with liability limited by shares (Italian S.p.A) (articles 2446 and 2447) and for limited liability companies (Italian S.r.l.) with reference to losses recorded in the FY underway at 31 December 2020 (i.e. 2020 losses for entities with a FY corresponding to the calendar year), besides the cancellation of the causes of dissolution due to losses.
Aim of the provision is thus to avoid situations in which directors of joint-stock companies are compelled - further to the recording of losses due to the pandemic - to wind-up the company to avoid being deemed liable of a management not complying with the going concern principle and, therefore, to avoid that losses accrued in this extraordinary period might lead to the dissolution of companies still able to generate profits but which - in the short term - cannot overcome their difficulties. The norm also provides for longer terms for the recapitalisation and specifies that:
The losses accrued in the FY underway at 31 December 2020 will have to be distinctly indicated in the notes to the financial statements, specifying in dedicated tables their origin and the changes occurred in the FY. This means that losses possibly accrued during the 5-year period of suspension of the norm, if autonomously relevant, should be subject to the ordinary provisions.
In order to improve the assets situation of companies and to allow them to face losses which might arise due to the pandemic, art. 1, para. 83 of Budget Law for 2021 introduced para. 8-bis into art. 110 of Law Decree no. 104/2020 (revaluation of corporate assets and participating interests and realignment), which provides for that provisions under art. 14 of Law no. 342/2000 apply also to the goodwill and to the other intangibles which are not legally protected as resulting from the financial statements of the FY underway at 31 December 2019.
This norm thus extends the possibility to revaluate or realign the values of corporate assets, including goodwill as well as other intangibles.
Since - in practice - it is complex from a statutory point of view to revaluate assets such as goodwill or other intangibles, it would be more convenient to apply the abovementioned art. 14 concerning realignment.
If we consider goodwill, the realignment of values included in the financial statements further to an extraordinary operation through the payment of a 3% substitute tax instead of IRES and IRAP implies, first of all, an economic benefit compared to the provision normally applicable lacking the new norms being analysed. With reference to this point it is worth reminding that:
By comparing the substitute tax rate applied in the two cases (the emergency provision introduced with the 2021 Budget Law and the T.U.I.R. provision), the greater economic benefit is clear. The realignment to the 3% cost thus represents a valid alternative to be carefully considered both from a tax point of view (for the deductibility of the relevant amortisations and depreciations) and from an administrative one (as it represent an administrative simplification, overcoming the difference between accounting value and tax value).
