On 4 May 2017, the General Manager of Assonime sent some observations on the bill AC4444 to the Budget Commission of the Senate of the Republic, to the Budget, Treasury and Planning Commission of the Chamber of Deputies and for information to the Chief Cabinet of the Ministry of Finance " Conversion into law of the decree-law of 24 April 2017, n. 50, containing urgent provisions on financial matters, initiatives in favor of local authorities, further interventions for areas affected by seismic events and development measures".
The letter highlights the most relevant problems, which arose following the entry into force of the decree-law of 24 April 2017, n. 50, concerning, in particular, the provisions relating to the expansion of the scope of application of the split payment and those which have reduced the term for deducting VAT.
The application, from 1 July next, of the split payment to transactions carried out with all entities and subjects belonging to the Public Administration, of all the companies controlled by central and local Public Administrations and of the listed companies included in the FTSE index MIB of the Italian Stock Exchange creates considerable uncertainties for the supplier companies with regard to the correct identification of these subjects. The situation is aggravated by the very limited period of time required by the regulation (published on 24 April last) to comply with it (from 1 July next).
The application of the split payment, requiring the modification of the management and accounting systems currently used by the supplier companies of the aforementioned subjects, involves, among other things, high costs of adapting these systems.
Finally, the provisions on split payments create considerable financial problems for supplier companies - due to the lack of liquidity ordinarily connected to the collection of VAT charged to customers - and an even more critical credit position with the Treasury, due to the considerable increase in the amount of VAT credits, credits whose reimbursement is often obtained over a long period of time and whose compensation has many limits.
Further concerns have arisen in companies following the entry into force of the provisions which significantly limit the current term within which it is possible to exercise the right to deduct VAT: the new term, which is too narrow, could in many cases lead to the inability to make the deduction.
