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How to prepare for CSRD and the new reporting obligation

by Alessandro Malerba

The preparation of a sustainability report presupposes that the organisation, a company but also a non-commercial entity (public or private), has already undertaken a process of adopting a sustainable business system or model - even if this often happens unconsciously.

The process that leads to being able to report on the objectives and intermediate goals already achieved by the Organization is the result of activities and methodologies, sometimes complex, to be applied in a similar way to what we have been used to doing with financial reports for years. The application of these methodologies and activities requires, however, to immediately pay attention to some mandatory steps:

• the identification of the objectives for which the company can define itself as sustainable in relation to its industry and the SDGs (the 17 Sustainable Development Goals of the United Nations);
• the definition of its business model from a sustainable perspective, functional to pursuing the SDGs;
• the implementation of the connected operational strategies which must permeate governance of the Organization;
• the lines of action, activities and intermediate goals necessary to achieve a real cultural change within the company in the medium term.

Today, talking about these methodologies and activities is particularly important given the attention paid to these issues: not only an increasingly pressing demand from the market (financial institutions, large corporations and stakeholders) but also the adoption of specific regulations. At a European level, for example, the EU Council CSRD directive relating to corporate communication on sustainability was adopted on 28 November 2022. According to the statements of the EU Minister of Industry and Trade Jozef Síkela "the new rules will make a greater number of companies responsible for their impact on society and will guide them towards an economy that benefits people and the environment". What does this mean for organizations? In practical terms, they will have to communicate information on the ways in which their business model impacts on sustainability, also considering external factors such as, for example, climate change or human rights issues that influence their activities.

Entrepreneurs and administrators, that is, can no longer ignore sustainability and underestimate the importance of a timely mapping of risks and opportunities connected to ESG issues, since this short-sightedness will have negative effects on the Organization's positioning within the reference market (for example, relationships with customers, suppliers and relations with the credit market) and on its own business continuity.

 CSRD - organizations involved and implementation times

The European Financial Reporting Advisory Group (EFRAG “European Financial Reporting Advisory Group” – body responsible for providing technical advice to the European Commission in the drafting of the ESRS “European Sustainability Reporting Standards”) is responsible for developing European standards (ESRS regulation-standards), subject to the technical opinion of various European agencies.

The new rules on sustainability communication will apply to large public interest companies with more than 500 employees, to alllarge companies with more than 250 employees and a turnover of 40 million euros (the threshold for defining a company as "large" is that set by Accounting Directive no. 34/2013) and to all companies listedon regulated markets, with the exception of micro-companies. These companies are also responsible for the evaluation of information applicable to subsidiary companies.

But what will be the path (indicated in the Directive) for the application of these rules?

• 2025: communication on the financial year 2024 for companies already subject to the Directive on the disclosure of non-financial information (DNF-2016);
• 2026: communication on the financial year 2025 for companies currently not subject to the Directive on the disclosure of non-financial information financial year;
• 2027: communication on the financial year 2026 for listed SMEs, small and non-complex credit institutions and captive insurance companies;
• 2029: communication on the financial year 2028 for third country companies.

As can be seen, the Directive will be a complex process that will extend over the medium-long term, progressively expanding the list of organizations impacted by these innovations. For this reason, beyond the application roadmap, it is essential that companies immediately start a sustainability path, to avoid the risk of arriving unprepared for the regulatory obligation. sustainability reporting must be implemented today, even if for the moment only on a voluntary basis, to give a signal of openness to the market, of reliability and above all the ability to look to the future (which presupposes the desire for continuous growth).

Reporting standards

Today, officially, the European ESRS regulatory standard cannot yet be adopted (but it will be adoptable in time for the entry into force of the effects of the CSRD directive, i.e. 1 January 2024).

Currently, among the internationally recognized and most widespread standards for the preparation of the sustainability report (or sustainability reporting), there are the GRI (Global Reporting Initiative standards), recently revisited and expanded in 2021 and which will be adopted compulsorily from 1 January 2023. Therefore, an SME that on a voluntary basis wishes to report its sustainability, already for the 2022 financial year, will be able adopt the GRI standard.

It should be considered that the current EFRAG draft of the ESRS, compared to the GRI  2021, in fact expands the reporting requirements and introduces more stringent and complex concepts (such as, for example, double materiality) with the aim of creating standardized and comparable sustainability information, raising its quality. In this way, information sets will be created with a more rigid structure and with mandatory minimum requirements

It is clear that this will result in a significant effort for the companies involved who will in the future have to equip themselves with processes and a reporting system adequate to publish an integrated document within the time required in order to obtain the certification required by the Directive.

We are not going into, here, the discussion currently underway among those involved in ESG reporting (Standard setters, consultants, large companies, other stakeholders): the main theme of this discussion is the danger - for some it exists, for others it does not - of harnessing thecounting of sustainability in too rigid schemes and boundaries, albeit in favor of comparability, both over time and between the various industries. This, according to some, would place limits to the variety and breadth of information (which the matter itself imposes)

It is sufficient to read some 2021 sustainability reports to understand how the approach taken by organizations up to now, although adopting the same standards (GRI mostly in core mode), is to produce documents with a strong identity, extensive descriptions and insights aimed at highlighting their mission, often not easily comparable to other reports.

A sustainability path for SMEs

To outline a path suitable for SMEs, we can draw inspiration from the methodology adopted by our Partner, EFTILIA Srl STP Benefit, one of the main advisory companies on a national basis, on the subject of sustainability.

The declination of the so-called EFTILIA method for SMEs places the task of undertaking a path aimed at sustainability reporting on the highest governing body of the Organization. It is a method, a roadmap, which includes some steps.

1. Understand the degree of attention and awareness of the SME, through:

• analysis of the current business model with a comparison between the Entrepreneur/Management and the consultants, to arrive at abusiness modeloriented towards ESG sustainability;
• analysis of business processes and collection of existing data regarding risk analysis (preliminary assessment);
• Identification, examination and analysis of the needs of present and future stakeholders (stakeholders engagement) such as workers and collaborators, customers and suppliers and impact on the territory.

1. Definition of the sustainability policy and adaptation of the business model from an ESG perspective

• adoption of ethical principles to guarantee business continuity;
• planning of training and communication for the diffusion of the culture of ESG sustainability, through the training of governance but also of workers and collaborators and effective communication to customers, suppliers, territory and responsible marketing;
• assessment of environmental impacts on the SME's ecosystem;
• risk mapping (risk assessment) in the ESG;
• definition of material topics;
• measurement of impacts with reference to the identified topics (material assessment);
• definition of an ESG Action Plan, which determines, by functional operational steps, the paths aimed at pursuing the ESG objectives inherent in the business model adopted;

1. Reporting sustainability

• inform stakeholders, in compliance with the chosen standard, about its ESG mission and the results achieved;
• explain the objectives and activities undertaken and to be undertaken to achieve the subsequent goals.

What is mentioned in this article is a first analysis of a topic that deserves to be studied in depth, technically studying the regulatory changes that will have the greatest impact on the future of our businesses.

On the blog of our partner EFTILIA we will publish many contributions in this regard, delving into the Method and the applicable roadmap: from the definition of the material ESG topics to be reported to the reporting perimeter up to the actual drafting of the reportort.

However, it is worth anticipating one question right now: it is not necessary to be a large company to undertake a path aimed at bringing out sustainability and your own business model in an ESG perspective. To do this you need to be great entrepreneurs, that is, people capable of grasping and anticipating what will inevitably affect everyone.

Starting a sustainability path today will allow you to implement the regulatory obligation prepared and with a competitive advantage compared to other less sensitive players on the market; by doing so, you will be able to implement those policies sooner and more effectively that will guarantee the continuity and growth of your business over time.

Our little forest is expanding.

This year, as in 2021, the entire Malerba&Partners team chooses Treedom to give a strong acceleration to a path towards sustainability that began some time ago.

Treedom is the first site that allows everyone, not only people but also companies, to plant trees and follow their history over time, to give life to a long project for the benefit of the planet, but not only. Each tree is planted, photographed and geolocated to share with everyone the commitment and beauty of this little treasure.

The Malerba forest&Partners

This year we decided to do even more. To our small forest created over time, we have added 50 new trees, each of which is personalized with the name of a customer, to thank them for the work done together and to wish them a merry, sustainable Christmas.

It is a small concrete gesture capable of spreading a message that is close to our hearts: a sustainable choice is possible, indeed, it is necessary because a simple and effective gesture like ours brings a benefit not only to the environment but to everyone.

It is not only an extraordinary act for the planet but also brings economic and social benefits to the rural communities located in the very areas where the trees are planted. Just like sustainability that follows the ESG (Environment, Social, Governance) criteria and the SDGs (the 17 United Nations Sustainable Development Goals) on which we also work together with our customers and our partner EFTILIA.

For us, it is the best way to say that every person counts and that together businesses and professionals can do a lot for everyone's future.

What can you do

To date, more than 2,500,000 trees have been planted by Treedom and thanks to this, more than 690,000 tons of CO2 have been absorbed and over 147,000 agricultural workers have been involved who have been able to work with Treedom and all the people and companies that participate.

In our small way, we at Malerba&Partners are also part of those numbers with our 65 total trees, 8.75 tons of CO2 absorbed in 5 countries.

You can do it too, not just at Christmas.

What's new in the 2023 Budget Law - Part I

Art. 1 paragraphs from 153 to 159 and from 166 to 251 of the new Financial Law are dedicated to the regularization of violations of various kinds, closure of pending disputes and scrapping or removal of files. In non-technical jargon, the provisions that deal with these issues are called "tax truce", the focal point of which lies in the resolution of non-regular positions in a facilitated manner.

The main measures of the tax truce contained in the Budget are of a different nature, namely:

1. Automated control of declarations
2. Regularization
3. Special revision

   AUTOMATED CONTROL OF DECLARATIONS

   The Financial Law confirms the possibility of defining the sums due following the automated control of the declarations relating to the current tax periodssee. articles 36-bis, Presidential Decree n. 600/73 and 54-bis, Presidential Decree n. 633/72, art. 2, paragraph 2, Legislative Decree. n. 462/97

   Why do we talk about facilitated definition? Because it facilitates the taxpayer in a non-regular positionwithin 30 days

   What happens, however, to the sums resulting from the notifications of irregularities whose installment payment is still in progress as of 1.1.2023? In these cases, if the installment has not already lapsed, the sums can be defined with the payment of the residual debt for various reasons (taxes, social security contributions, interest, additional sums) as well as a 3% reduction of the fine. And this relief is valid for all the sums involved, regardless of the tax period to which they refer (see art. 3-bis, Legislative Decree no. 462/97) but it must be kept in mind that all the sums paid on definable debts are not refundable.

   Payment of sums due in installments

   In addition to what has already been mentioned, the 2023 Budget confirms what has already been foreseen, i.e. the possibility of paying in installments for a maximum of 20 quarterly installments the sums emerging following an automated check of the declarations and formal control (pursuant to art. 36 bis, ter, Presidential Decree no. 600/73 and 54 bis Presidential Decree 633/72) regardless of the contested amounts: previously, in fact, for amounts lower than €5,000 a shorter installment was permitted, a maximum of 8 quarterly instalments.

   Extension of notification of tax bills payment

   For the notification of payment orders relating to the sums due for the automated control for 2019, the one-year deferral of the deadline is confirmed (art. 25, paragraph 1, letter a), Presidential Decree no. 602/73. Consequently, the notice can be notified within the fourth year following the year in which the return was submitted (rather than within the third year). Reference is therefore made to the fourth year following the deadline for payment of the single or last instalment, provided that the deadline for payment of the sums resulting from the declaration expires after 12/31 of the year in which the declaration is presented.

   REGULARIZATION OF FORMAL IRREGULARITIES

   In addition to automated control, as mentioned, the 2023 Budget also touches on the issue of formal regularization of irregularities. In particular, the possibility of regularizing the position with respect to irregularities, infringements or failure to comply with formal obligations committed until 31 October 2022 is confirmed

   To complete this regularization, the Legislator requires not only the removal of the irregularity and/or omission but also the payment of €200 for each tax period in which violations occurred. However, it is not always possible to regularize situations arising from formal irregularities. This is in fact excluded for:

   • acts of contestation or imposition of sanctions issued as part of the voluntary collaboration procedure (art. 5-quater, Legislative Decree no. 167/90);
   • emergence of financial and patrimonial assets established or held abroad;
   • violations already contested with acts that have become definitive to 1.1.2023.

   Another significant point is worth mentioning: for the violations covered by the PVC

   When it has emerged so far it is already present in our legal system, but it is important to remember that we are awaiting the intervention of the Revenue Agency

   SPECIAL REVIEW FOR TAX VIOLATIONS

   The last of the big news for the tax truce foreseen by the The 2023 budget that we see in this article is that of the so-called special repentance. When we talk about special forgiveness for tax violations we are referring to the taxes administered by the Revenue Agency whose regularization is different from that seen previously (i.e. the violations resulting from irregularities or formal violations in paragraphs 153 to 159 and from 166 to 173).

   When is special forgiveness permitted?

   • for violations not yet contested on the date of payment of the amount due or of the first installment with act of liquidation, assessment or recovery, dispute or imposition of sanctions, including friendly warnings (ex art. 36-ter, Presidential Decree no. 600/73);
   • for violations referring to validly submitted declarations.

   While the following are excluded:

   • for the emergence of financial and property assets established or held abroad while
   • for violations omitted, or presented more than 90 days after the deadline, as specified at the time of approval.

   To regularize the position, simply pay 1/18 of the minimum fine, in addition to tax and interest. This payment can be made in a single payment or in 8 quarterly installments of the same amount, with the first installment due on 31.3.2023. How is regularization perfected? In two alternative ways, with the removal of the irregularity or omission or with the payment of the first installment or the entire sum due by March 31st of this year. Added to this is the express confirmation of the validity of the amendments already made as of 1 January 2023.

   As also mentioned on formal irregularities, the issuing of the implementing provisions of these innovations is delegated to the Revenue Agency; therefore, it will soon be possible to have a more precise overall vision of these news.

   In the next article dedicated to the tax truce, we will instead deal with assessment notices, tax disputes and regularization of the failure to pay the installments due following the definitive institutions.

   Our tax team is always ready to answer any questions, contact us.

News from the defining institutes

Why is it so important to deal with tax relief in the current regulatory environment? The answer appears rather simple: our country is currently serving an amount equal to 1,100 billion not recovered, a huge hole that puts Italy's economic resistance to the test.

It is therefore also on collection or compulsory recovery that the Government first and foremost but also Parliament will demonstrate their efficiency and the change of pace compared to the previous situation. This is why it is important in this second part of our journey on the fiscal truce to understand well what is new about the defining institutions, the ones through which we will be able to recover at least part of that billion hole in our taxes.

In particular, we will deal here with:

1. Facilitated acceptance and settlement of assessment documents
2. Facilitated settlement of pending tax disputes
3. Facilitated conciliation of pending tax disputes
4. Facilitated waiver of tax judgments
5. Regularization of omitted payments of installments in settlement institutions

1. MEMBERSHIP AND FACILITATED DEFINITION OF ASSESSMENT DOCUMENTS

Starting from the taxes administered by the Revenue Agency, the 2023 Budget Law confirms the possibility of defining the assessment documents. But this is possible, as highlighted in the Explanatory Report, provided that such acts have not been challenged, the appeal deadlines have not already expired or they are not notified by the Agency by 31 March 2023.

In two different cases the sanction reduced to 1/18 of the minimum is applied, and in particular in the case of:

• Assessments with acceptance: for PVCs delivered by 31 March of this year, notices not contested and still contestable as of 1 January 2023 and notified after by 31 March 2023. Or for assessments with acceptance relating to mandatory invitations notified by 31 March (pursuant to art. 5-ter, Legislative Decree no. 218/97);
• Definition in acquiescence: for notices not contested and still contestable as of 1 January 2023, those notified to the Revenue Agency as well as a definition that requires the payment of the fine imposed reduced to 1/18 and the interest applied, within the deadline for submitting the appeal.

The Legislator also focused on the sums owed which cannot be compensated with credits available to the debtor: these, in fact, can be paid in installments in a maximum of 20 installments/quarter. The only limits are the amount - always equal, not variable - and the payment deadline, set for the last day of each quarter following the payment of the first instalment.

As in other cases, here too we await the issuance of the implementing provisions by the Revenue Agency.

2. FACILITATED SETTLEMENT OF PENDING TAX DISPUTES

In this case the reference is to tax disputes in which the Revenue or Customs Agency is also a party with the object of tax actions such as notices of assessment, acts of imposition of sanctions and others. Disputes fall within this definition:

• still pending as of 1 January 2023, in every state and level of judgment;
• with first instance appeal notified to the other party by 1 January 2023 with trial not yet concluded.

However, disputes concerning traditional own resources or sums due to recover state aid are not included (art. 16, EU Regulation no. 2015/1589). Even iIn this case, the implementing provisions from the Revenue Agency are awaited.

Benefits

First of all, the benefit of this type of means lies precisely in the closure of the dispute - on the one hand, therefore, the end of the debtor's obligation, on the other the recovery of at least part of the sums owed by the State. For this to happen, the payment of a sum equal to the value of the dispute is required; in other words, the amount of the tax due net of interest and any other sanctions (art. 12, paragraph 2, Legislative Decree no. 546/92).

But what happens when the Agency succumbs or loses the dispute? In this case, the payment of a percentage of the value of the dispute is sufficient, but this varies according to the level of judgment:

• if it occurs in the first degree, 40% of the value of the dispute is required;
• if it occurs in the second degree, 15% is required.

However, the circumstance is different in which the appeal is only partially accepted and therefore both the Agency and the taxpayer lose: in this case the entire sum relating to the part of the act confirmed by the ruling is claimed (i.e. the part of the ruling which agrees with the Agency) or a sum between 40% and 15% for the part of the act annulled (for the part which instead agrees with the taxpayer).

The last case worthy of note are disputes before the Court of Cassation: if in these cases the Agency loses at any previous level of judgement, the payment of 5% of the value of the dispute is requested for its settlement.

How to submit the application

The person who proposed the introductory document or took over from it or is entitled to do so can submit a request. The deadline for submission is June 30, 2023.

What happens after the facilitated definition?

Once the application has been submitted, the dispute is suspended until 10 July 2023. The person who made the request must deposit a copy of the application for facilitated settlement (and a copy of the payment of the amount due). At this point, the judicial body suspends activities until the response, positive or negative, to the request for facilitated settlement is received.

What happens in case of refusal?

The taxpayer who has been denied this option can appeal the denial before the judicial body within 60 days.

3. FACILITATED CONCILIATION OF PENDING TAX DISPUTES

The facilitated definition is not the only tool made available to the taxpayer: in the 2023 Budget Law, in fact, the facilitated conciliation of disputes before the Courts of Tax Justice of which the Revenue Agency is a part is confirmed.

It is in fact possible to resort to a conciliatory agreement which provides for the reduction of the fine to 1/18 of the minimum together with interest and accessories. However, it is not possible to resort to facilitated conciliation for disputes concerning traditional own resources and sums due to recover state aid. The advantage of conciliation lies, obviously, in the possibility of not having to resort to a judicial body but reaching an agreement between the parties. In fact, it is sufficient to pay the sums due (in a single payment or in installments) within twenty days of signing the agreement: once this duty has been fulfilled, the conciliation is completed.

4. FACILITATED WAIVER OF TAX JUDGMENTS

It is also possible that the taxpayer does not wish to continue with the dispute and therefore chooses to interrupt the disputeversia. In this case the Legislator of the 2023 Budget Law allows waivers in specific cases. This can happen following the settlement definition of the counterparty in cases where the dispute has reached the Court of Cassation, has as its object tax actions and sees the Revenue Agency as the counterparty.

For this waiver to be completed, the signing of the agreement between the parties is necessary and the payment of the sums due (taxes, penalties reduced to 1/18 of the minimum, interest and any accessories) within twenty days of signing the agreement. Once the waiver has taken place, the subject obviously can no longer claim rights to the sums (he cannot request their repayment).

Even in this case, the waiver cannot take place in disputes that concern traditional own resources and sums due to recover state aid.

5. REGULARIZATION OF OMITTED PAYMENTS OF INSTALLMENTS IN THE DEFINITIONAL INSTITUTIONS

With regard to taxes administered by the Revenue Agency, the Legislator confirms the possibility of regularizing the position with full payment of the tax only and of the omitted or insufficient payment by 1 January 2023 of the sums due following definitional institutions such as:

• conciliations
• assessments with acceptance
• acquiescence of assessment, rectification or settlement notices
• complaint or mediation procedures

To complete this possibility, the payment of the sum due is required in a single payment or in installments by March 31st of this year.

Rules, deadlines and membership methods for taxpayers

by Emilio Veneziano

The news for taxpayers' debts does not end. The Legislator has in fact introduced a new possibility for the facilitated definition of payment bills, the so-called “scrapping-quater”. But who will be able to benefit from it and above all by when?

What is quater scrapping?

First of all, the institution must be defined. This is an instrument that allows the debtor taxpayer to extinguish the debt, without penalties, interest (including late payment), additional sums and sums accrued as premiums, by making the payment in a single solution / in installments of the sums:

• entrusted to the Collection Agent as capital;
• accrued in favor of the Collection Agent as reimbursement of expenses for executive procedures / notification of the payment demand.

To take advantage of this definition, however, the specific application must be submitted by April 30th of this year, electronically.

Which debts can be treated with quater scrapping?

The facilitated definition concerns debts resulting from individual charges entrusted to the Collection Agent in the period from 1 January 2000 to 30 June 2022.

As highlighted by the Revenue Agency - Collection, the facilitated definition is permitted with reference to "all loads" entrusted in the reference period, including those:

• contained in files not yet notified;
• affected by payment/suspension measures;
• already the subject of a previous facilitated definition, even if lapsed.

“Quater scrapping” is also permitted:

• limited to interest (including the so-called "increases") and sums accrued by way of surcharge, also with reference to administrative sanctions other than those referring to:

• tax violations;
• violation of obligations relating to social security contributions / premiums;
• for debts resulting from charges entrusted to the Collection Agent by the bodies managing forms of compulsory social security(professional social security funds, including INARCASSA, CDC, ENPAV, ENPAM, etc.) and for private professionals of the category social security fund, following the adoption of specific resolutions by 31.1.2023.

What sums are excluded from the definition?

The facilitated definition in question cannot be requested for sums registered regarding:

• recovery of state aid pursuant to art. 16, EU Regulation no. 2015/1589;
• credits deriving from conviction rulings of the Court of Auditors;
• fines / fines / sanctions due following criminal conviction measures / sentences;
• traditional own resources expected as well as VAT collected on importation.

How do I join the scrapping-quater?

As already mentioned, the interested party must express to the Collection Agent the desire to make use of the facilitated definition by means of a specific declaration to be submitted byon April 30th (or by integrating a declaration already submitted, always by this date). It is important to remember that, again in the declaration, the number of installments chosen for scrapping must be indicated, as well as some additional information.

How does the scrapping-quater application look like?

The presentation always takes place on the street, on the Revenue Agency - Collections website using one of the following alternative online methods:

• in the reserved area, logging in with the SPID, CIE (Electronic Identity Card) and CNS (National Services Card) credentials
• in the public area, filling out the form and attaching the identification document.

After submitting the application, the taxpayer receives two different types of communications from the Revenue Agency - Collection, based on the area chosen for access:

Reserved area

The taxpayer receives an acceptance email, with the submission receipt of the membership application attached.

Public area

The taxpayer receives:

• a first email to the address indicated, with a link to be validated within 72 hours. Failure to validate within this deadline will result in the automatic cancellation of the application;

• a second email, following validation, taking charge, with the identification number of the case and a summary of the data entered;

• a third email, if the attached documentation is correct, with the submission receipt of the membership application attached.

What happens after submitting the application?

By June 30th of this year, the Revenue Agency - Collection will notify the taxpayer whether the application has been accepted or denied. In particular:

In case of acceptance, the communication contains the indication:

• of the amount due for the definition
• of the payment deadline, depending on the taxpayer's choice (single solution / instalments) contained in the application
• of the information to request direct debit of the payment to the current account.

Pre-compiled payment forms are attached to the communication

In the event of denial, the communication contains only the indication of the reasons why the application was not accepted.

Payment methods

If the application is accepted, therefore, the communication will reach the taxpayer by 30 June of this year and contains information on the sums due, the amount of the individual installments as well as the day and month of expiry of the same.

There are three alternative payment methods:

1. through domiciliation on the current account indicated by the debtor in the definition request
2. through the pre-compiled forms attached to the communication from the Collection Agent
3. at the counter of the Collection Agent.

Payment of the amount due can be made in a single payment by July 31st of this year or in a maximum of 18 consecutive installments of the same amount.

In the case of payment in installments:

• the first and second instalments, each equal to 10% of the total sums due, must be paid respectively by 31 July2023 and 30 November 2023
• the remaining (16) instalments, of the same amount, must andbe paid by 28.2, 31.5, 31.7 and 30.11 of each year, starting from 2024.

From 1 August of this year, however, interest is due on the installments at the rate of 2% per year and it is important to underline that the extension envisaged in the event of a temporary situation of objective difficulty for the taxpayer is not applicable.

What happens in case of omitted/insufficient or late payment?

When one of these three hypotheses occurs (even on a single solution or a single instalment) the ineffectiveness of the facilitated definition is determined and the payments made are considered as an advance on the sums due.

Let's focus on an important point: the Agency recently expressed its opinion on this point and in particular on the differences between this new scrapping and the previous one, the ter scrapping. For the Agency, the new regulation does not preclude the installment of the residual debt and therefore it is possible to request the related payment of:

• 72 monthly installments maximum (if the amount exceeds €120,000 the temporary situation of objective difficulty must be documented)
• 120 monthly installments maximum (in case of proven and serious situation of difficulty due to the economic situation).

The Agency itself states that the allowed tolerance cannot be greater than 5 days; therefore, a relatively limited delay in payment is allowed.

What effects does accepting the definition have?

When the quater scrapping request is accepted:

• for the loads that constitute the object are suspended:

• the periods of limitation / forfeiture
• the payment obligations of previous extensions in existence on the date of submission, until the expiry of the first / only installment of the amount due for the settlement (as of 31.7.2023 suspended extensions are automatically revoked)

• the Collection Agent cannot:

• initiate new enforcement actions or continue the enforcement procedures previously initiated, provided that the first successful auction has not taken place
• register new administrative seizures / mortgages

• the debtor is not considered in default for the purposes of disbursing tax refunds / payments of credits due from the Public Administration

• in the case of facilitated definition of contributory debts, the DURC is issued following the presentation by the debtor of the declaration to make use of the definition.

For more information regarding the Scrapping - Quater procedure do not hesitate to contact us. Our financial consultants are at your disposal to guide you in every step of the procedure.

The new tools to support the Negotiated Settlement of Business Crisis (CNC)

by Federico Valenza

From the outset we followed the introduction of the Negotiated Composition of the Business Crisis (CNC), the voluntary procedure that allows entrepreneurs to prevent the failure of their companies. We have already talked about it on our blog, to get an idea of the advantages and more technical information, watch the video.

The tool has been operational since 15 November 2021, but after more than a year there is little use of the CNC: there are few entrepreneurs who have voluntarily exploited it to avoid bankruptcy and moreover with few positive outcomes. Let's see some numbers.

One year after entry into force, a total of 475 applications have been filed throughout Italy, of which 21% in Lombardy alone.

But what are the difficulties in implementing CNC?

First of all, it is good to underline the obstacles to diffusion which are, nominally:

• impossibility of reaching settlement agreements with qualified public creditors (Revenue Agency, INPS, Inail)
• long deadlines to access the procedure due to difficulties in submitting the necessary documentation.

News to the PNRR introduced by the Council of Ministers

The Negotiated Crisis Settlement is a tool with enormous potential for our economy – if you want to learn more about it, you can read the insights written on our blog, starting from this. And it is precisely for these advantages that the Government has chosen to give a further boost to the use of this tool, trying to push entrepreneurs to resort to CNC before the extreme consequences are reached.

On 16 February 2023, the Council of Ministers therefore approved the draft decree on the PNRR, which in art. 39 introduces some measures to support the success of CNC, facilitating their diffusion and consequently their concrete application by companies with a more significant debt exposure.

In particular, there are three measures planned to encourage the use of CNC:

1. introduction of the settlement agreement: the entrepreneur, during the negotiations initiated by the independent expert, has the right to propose settlement agreements with the public creditors which provide for the payment of the debt, partially or deferred, to an extent no less than what could be obtained from the judicial liquidation.
2. admission of the self-declaration: in order to counteract the frequent difficulties and slowdowns in accessing the procedure, the decree allows a self-declaration with which the entrepreneur, before submitting the request for appointment of the expert, certifies that he has requested all the necessary certifications.
3. reward measures: it is expected that, for the debtor who has acted in a timely and correct manner, theThe Revenue Agency may grant installment plans of up to 120 installments (previously 72), in cases of proven and serious difficulty of the company represented at the request of the company and signed by the expert.

The accountants' comment

The National Council of Chartered Accountants and of the Accounting Experts, with the press release of Friday 17 February 2023 expressed itself more than in favor of the approval of the draft decree.

President Elbano de Nuccio in fact commented enthusiastically by stating "these are reasonable provisions that intend toeffectively support Italian companiesin overcoming crisis situations and aimed at protecting business continuity".

All that remains is to wait and work so that CNC rightfully becomes one of the most used tools, avoiding eroding our economic fabric, already tested by the numerous crises that have occurred in recent years.

Investigation archived. Also in the defense team is Donatella Minutolo from Malerba&Partners

On 27 February this year, the criminal proceedings against the patrons of Reggiana Calcio ended with a dismissal. The Judge for Preliminary Investigations (GIP) of Reggio Emilia, Luca Ramponi, accepted the request of the same Public Ministers Giacomo Forte and Giulia Stignani and ordered the dismissal of the investigation for the crime of fraudulent bankruptcy against the 16 defendants, including Mike Piazza and Alicia Piazza Richter.

Crack Reggiana Calcio: The story and the investigation

In July 2018, the club was liquidated, followed by the declaration of bankruptcy in December.

At this point, the judiciary's investigation opens, with the registration of 16 people in the register of suspects for the crimes of fraudulent bankruptcy and false accounting.

Technical expertise

PM Forte and Stignani themselves had requested an official technical assessment to ascertain the responsibilities of the accused.

It is precisely this technical consultancy that "exonerates" the defendants by highlighting, among other things, that the continuous finance provided by the shareholders has failed to make up for the erosion of the net equity due to the negative economic results of the company's management.

Archiving

For Mike Piazza and Alicia Piazza Richter – represented by the lawyers Donatella Minutolo of the Malerba&Partners legal team and Alessandro Simionato – it is the end of a nightmare, as they themselves say, like all the defendants.

It is good to remember, in fact, that the two spouses are not strangers at all: he, Mike, hero of American baseball, she, Alicia, model and former actress. Their arrival at Reggiana marked the beginning of an adventure of enthusiasm for the club.

The investigation for fraudulent bankruptcy had inevitably tarnished the reputation of the spouses in the eyes of the fans, overshadowing the hypothesis of an offence.

“Today, however, there are no longer any doubts” says the lawyer. Minutolo of the Malerba&Partners legal team “the conduct of Alicia and Mike Piazza was not only lawful in the management of Reggiana's assets but was also a strenuous attempt to save the club.

Find out more about our legal team and our Specialist Legal Advice service.

What is stakeholder engagement and how to exploit it to grow on the market

by Beatrice Ortuani

What does stakeholder mean?

The definition derives directly from the GRI Standards which identify stakeholders as entities, internal and external, which can significantly impact the products, services and activities of an Organization which, in turn, can influence the same stakeholders.

There is no fixed list of stakeholders for all companies since the variables in this sector take into account specific factors such as, for example, the sector and the geographical area in which it operates, all very different from one organization to another. It is good to remember that for the same organisation, the stakeholders can also vary over time as the reference factors can vary (e.g. new business strategies, evolution of the surrounding environment, etc).

Wanting to analyze some macro categories, it is possible to identify some types of stakeholders such as investors, shareholders, members, customers and potential customers, suppliers and business partners, employees, companies operating in the same sector, governments and regulatory bodies, supranational institutions, but this remains a list too broad to be valid for all organizations.

It is also possible to proceed with a further subdivision between the stakeholders or between primary or secondary stakeholders, based on the level of influence and dependence on the company's decision-making processes: the primary stakeholders have a direct impact on the business activity and on the achievement of company objectives while the secondary ones have indirect impacts.

The stakeholder engagement tool

At this point it is possible to delve deeper into the so-called stakeholder engagement, the Organizations' tool for identifying and understanding the needs and expectations of their stakeholders. In general, it is a systemic tool for dialogue between all subjects who have an interest in the Organization; a tool capable of making stakeholders feel involved in decision-making processes. It is good to remember that no organization is self-sufficient but needs a deep involvement of the subjects who move together with it: stakeholder engagement consists precisely in this, in starting a dialogue with other figures in addition to those of the company to improve its image.

Stakeholder engagement works on different phases and is a progressive tool in the hands of organizations. Let's see the different steps

1. Planning

A mapping of sensitive topics and relevant stakeholders. At this stage it is useful:

• study the analyses already carried out by sector companies or verify some sector standards (e.g. GRI sector) to better understand the main needs for a company and its actors
• identify the internal functions to be involved in the stakeholder engagement procedure (e.g. Risk Management, Communication, Human Resources etc.).

The central purpose of this phase is to distinguish the most relevant stakeholders, to prioritize the action. It is in fact appropriate to understand:

• how much the stakeholder is dependent on the company;
• the influence of the stakeholder on the company's activity;
• the urgency of changing the type and method of relationship.

OnlineIn general, you can use the following scheme to ask yourself the right starting questions:

The same procedure is envisaged for the mapping of the most significant issues (according to the materiality analysis): analysis of internal and external documentation of the company, analysis of the context in which it operates, mapping the issues and prioritizing them etc.

2. Preparation and implementation

To implement an effective and efficient process, however, it is not enough to ask the right questions but it is also necessary to involve all the organisation's resources, both internal and external, and map the related risks. The preparation and implementation operations can be different and are identified in three progressive steps in intensity:

• Monitoring of the new needs of the company's stakeholders;
• Consultation of the stakeholders on the most relevant issues;
• Collaboration with the stakeholders to create shared value.

It is here, in this phase, that communication plays a fundamental role, because, for planning to work, it is appropriate to select the information and dissemination tools (e.g. analysis of information present online, surveys and questionnaires, meetings, partnerships, etc.)

3. Evaluation and improvement

This brings us to the third and final phase of the stakeholder engagement process, i.e. the evaluation of what emerged in the previous phases. Only once this "heritage" of knowledge has been acquired, is it possible to improve corporate strategies, in light of the data and evidence.

Specifically, it means understanding the overall quality of stakeholder engagement, evaluating both individual activities and the process as a whole.

In fact, thanks to the collection of suggestions, opinions and advice from its stakeholders, the Organization can optimize the performance of future activities.

Even in this phase, communication has an important role in the success because it is profitable, here, to communicate to stakeholders the value and impact of stakeholder engagement. The most effective tool is the publication of a report that explains the evidence obtained in a clear and transparent way, to make stakeholders understand the Organization's ability to understand their needs and take concrete actions for their specific interests.

Weed & Partners, together with Eftilia STP benefit and its professionals, follows and helps Italian SMEs also in the stakeholder engagement process.

Advantages and support for corporate sustainability

by Marta Livia Galli

We continue our journey in presenting the advantages of sustainability in the business sector. We had already mentioned this in the article "The advantages of sustainability for SMEs" but this time we focus in particular on the environmental sphere with a novelty contained in the Budget Law 2023.

The law 197 of 29 December 2022, in fact, reports in paragraphs 685-690 a "premium" for companies that choose to purchase biodegradable packaging and products deriving from the separate collection of plastic packaging also for the two-year period 2023-2024. This "prize" consists of a tax credit equal to 36% equal to €20,000 per company.

Objective of the measurement

The will of the Legislator in this case is clear: the promotion of the circular economy. The means used is clearly an incentive to companies and entrepreneurs to reduce the quantity of waste with a very high environmental impact in the context of complex production processes such as those of our companies.

It is not the first time that the Italian legislator has used this type of incentive: the tax credit was, in fact, established in 2018 to increase the use of non-hazardous plastic waste resulting from production processes. The big plan is, therefore, to push for the reuse of waste that would otherwise be lost. Since then, since 2018, this tax credit has been renewed over the years, underlining the importance of these issues for Italy and, moreover, the concrete advantage of this practice.

What is included in the tax credit

There are mainly three purchasing objectives for companies that want to take advantage of a real tax credit on recycled plastic:

1. products made with materials deriving from the separate collection of packaging made up of plastic material;
2. packaging, primary and non-primary, biodegradable and compostable according to the UNI EN 13432:2002 standard;
3. products deriving from the recycling of materials such as glass, paper and aluminium.

The products considered include paper or cardboard packaging - as long as it is not printed in ink and contains parts of non-biodegradable and compostable materials - and non-impregnating wooden packaging.

As already mentioned, the tax credit is equal to 36% of the expenses faced by the company, with a maximum amount of the credit that can be used in the year equal to €20,000 per company. The overall limit of financed expenditure of the maneuver is equal to €5 million, a sum designed to cover, in the intentions of the Legislator, the entire two-year period 2023-2024.

How to obtain the 36% tax credit

With regards to the methods of use, the 2023 Budget Law provides for the possibility of using the accrued credit exclusively as compensation through F24 to be submitted electronically, starting from 1 January of the following yearto the one in which the products covered by the benefit were actually purchased.

The sum thus accrued does not contribute to the formation of the income calculated for IRAP purposes and must be included in the tax return for the tax year in which it is recognised.

This is one of the cases in which we offer our services in the context of Corporate Tax Consultancy and Strategic Consulting to support companies in developing the best tax and business support strategies.

The ESG-oriented trend of the Italian legislator and the results obtained

Wanting to broaden the scope of this comment, it is possible to identify a trend on the part of the Italian legislator in the field of sustainability, in line with what the other EU countries are doing, both individually and together, as well as with the global trend.

The tax credit in question, in fact, foreseen in the budget already in 2019, continued to be renewed based on the results obtained. In the explanatory report to the bill that gave birth to the 2023 Budget Law, in fact, not only have the objectives set in previous years been achieved, the applications received are equal to approximately four times the resources allocated to the measure.

This underlines two important data: (i) Italy has no second thoughts - after all, it couldn't - regarding the strategy of fighting climate change and reducing the environmental impacts of non-biodegradable packaging and, even more so, (ii) as always businesses prove to be reactive with respect to the pressures received from the legislative side and entrepreneurs, the most far-sighted, are able to glimpse the advantages of sustainability and make them their own to keep up to date with the times.

This initiative to valorise and recover materials deriving from plastic packaging, therefore, demonstrates the desire to pursue the 17 sustainability objectives contained in the National Strategy for Sustainable Development, created with reference to the Sustainable Development Goals (Sustainable Development Goals, SDGs) outlined by the UN in 2015 and contained in the 2030 Agenda. 

Wanting to go into even more detail, the 36% tax credit for the purchase of recycled materials complies with the provisions of Objective n. 11, "sustainable cities and communities", with a view to continuous improvement in waste management and the recycling of the materials most harmful to the environment.

The tax incentives included in the 2023 Budget Law are part of the numerous tools available to the Government to guarantee, on the one hand, the achievement of the objectives proposed by the UN and, on the other, the promotion of a different mentality, oriented towards protecting the environment.

As always, the work to be done towards sustainability is not of companies but of the entire country system is twofold: on the one hand the laws of the State and on the other people and companies that follow those laws. The objective, today more than ever, is the same for all of us.

The news of the PNRR decree on the Negotiated Settlement of the Crisis and the operational steps

For some time, we have been dealing with business crises and we follow, also as consultants, the evolution of the Negotiated Settlement of Business Crisis - in this article we take stock of the news on the subject following the recent decrees (PNRR).

To complete the picture, therefore, let's see how the legislative provisions have, in fact, intervened in particular on some operational matters but not only. In summary, the main innovations can be found on:

1. duration of the installment plan of tax debts;
2. issuance ofVAT change notes;  
3. possibility of self-certification of confirmation requests sent to bodies (tax authorities and social security institutions);
4. content of the national telematic platform, managed by the chambers of commerce system, established pursuant to art. 13 of the CCII;
5. detailed checklistcontaining operational indications for the drafting of recovery plans, pursuant to art. 5-bis of the CCII;
6. indications for the drafting of the recovery planand the methods of carrying out the practical test;
7. specific training the possession of which is subject to the registration of the independent experts in the appropriate list.

As regards the expected application of the tax transaction (art. 63 CCII), the CNC procedure will also have to wait for the enabling law to modify the tax system. In fact, it contains in art. 9, several important principles of simplification of the taxation of business income, of the facilitative treatment of capital gains and contingent assets, of VAT obligations, of the tax liability of the transferee of the company, of the regime of notification of tax documents and of reduction of treasury, local and contributory debts, extending the treatment to all institutions regulated by the CCII.

But let's see what it is in more detail.

THE DURATION OF TAX DEBTS IN INSTALLMENTS

In case of publication in the business register of the contract referred to in art. 23, paragraph 1, letter a) and of the agreement referred to in art. 23, paragraph 1, letter c) of the CCII, the Revenue Agency grants the entrepreneur who requests it, with a specific request also signed by the expert, a tax debt installment plan of up to 120 instalments. With this regulatory provision, the terms of the installments of the tax debt originally foreseen (equal to 72 installments) have been increased in order to facilitate companies in serious difficulty within the negotiated settlement procedure. Also in this case, the expert takes on a role of "guarantee" for the third parties involved, by signing the request which shows the serious crisis situation in which the company finds itself and the functionality of the request for installments for the purposes of the successful outcome of the CNC procedure.

VAT RECOVERY THROUGHISSUANCE OF CREDIT NOTE

It is possible to issue a note of decreasing variation by the creditor of the company that accesses the negotiated settlement of the crisis, expanding the range of possible beneficiaries previously limited only to cases of access to insolvency procedures.

From the date of publication in the business register of the contracts or agreements referred to in article 23 paragraph 1 letters a) and c) and paragraph 2 letter b) of the Crisis Code, it will therefore be possible for the creditors affected by this procedure, in the event of non-payment of the consideration, to proceed with the issue of variation notes VAT without having to wait for its conclusion.

SELF-CERTIFICATION OF TAX AND SOCIAL SECURITY DEBTS

In order to facilitate access to the CNC, it is envisaged that the entrepreneur, at the time of submitting the application, can file, in place of the documents listed below, a self-certification in which he certifies that he has requested the necessary certifications at least 10 days from the submission of the application for the appointment of the expert.  

The documents required by art. 17 CCII replaced by the self-certification are:

– the single certificate of tax debts (referred to in art. 364, paragraph 1), which is the document that the offices of the Financial Administration and the relevant bodies issue, upon request of the debtor, relating to the existence of debts resulting from the respective deeds, from ongoing disputes and from those already defined for which the debts have not been satisfied;

– the overall debt situation requested from the Revenue-Collection Agency;

– the certificate of contributory debts and for insurance premiums (referred to in article 363, paragraph 1), with which the INPS and INAIL, upon request of the debtor or the court, communicate the credits they have towards the debtor by way of contributions and insurance premiums.

This provision applies to all requests submitted until December 31, 2023.

The other innovations introduced by the Ministry of Justice, with decree of 21 March 2023 (published on 04 April 2023), concern the content of the national telematic platform, which is made up of six sections concerning:

Section 1

“Practical test to verify the reasonable feasibility of remediation” available online; e.g. The prospectus has been updated and contains a simplified calculation structure for the fully operational Free Cash Flow From Operations. For cooperatives, the social loan repayment flows are determined according to a reasonable estimate based on historical evidence of loan movements.

Section 2

“Detailed checklist for drawing up the recovery plan and for analyzing its coherence”

Section 3

“Protocol for conducting the negotiated settlement”

Section 4

“The training of experts”

Section 5

“The platform”

Section 6 - New

“Summary sheet on the professional profile of the expert”. This form, formed according to the model shown in Annex 4, is required by art. 13 c. 5 of the CCII as amended by Legislative Decree 83/2022, and has the funtion of facilitating the regional appointment commissions, or in any case the subjects responsible for appointing the independent expert, in the search for the most suitable professional profiles with respect to the needs of the individual company accessing the negotiated composition. In addition to this, four annexes are also provided, in turn concerning:

• Annex 1 "Instructions for formulating proposals to interested parties";
• Annex 2 "Online application";
• Annex 3 "Declaration of acceptance of the appointment of negotiated settlement expert";
• the new Attachment 4 "Summary professional profile of the expert".

Strategic reflections and defined roadmaps

by Gianni Malerba

Today all companies are undergoing a "gentle push" towards achieving a sustainable businesscompetitive advantage

We are starting to talk about sustainability, and subsequently sustainable developmentinternational collaboration

If already in that period the emphasis was on the environmental problems connected to development and their respective social and economic consequences, today the link between sustainability andESG (Environmental, Social and Governance) activities must be underlined even more so

Sustainability as a source of competitive advantage

Connecting the terms "business", or more specifically SMEs Italian, and "sustainability", means conceiving the latter as the development of lasting value for the company and for all stakeholders in the long term, representing it as a competitive advantagean urgent necessity

But what do we mean when we talk about competitive advantage?

• Better opportunities for access to credit. In fact, credit institutions will pay ever more attention to evidence of sustainability. We talked about it in our article The advantages of sustainability for SMEs
• Creation of a supply chain that contributes to the creation of a sustainable business linked to the human and environmental cost of the entire journey of a product through network;
• Improvement of corporate reputation or the set of perceptions, evaluations and expectations of stakeholders with respect to the company's past and future actions. One of the ideas is present in our article The levers of competitiveness of companies
• Greater attractiveness for investors generated by an increase in funds available to invest in company growth.

We instead talk about necessity cannot be postponed because:

• The legislative provisions, which today concern large and medium-sized enterprises, will be increasingly extended over time to SMEs as well. A good starting point is offered by our article Sustainability reporting and SMEs
• There are growing requests aimed at guaranteeing a sustainable production chain from upstream to downstream
• A managerial culture is necessary enlightened;
• It is necessary to guarantee the so-called business continuity, i.e. the survival of the company, by identifying possible threats, evaluating what the consequences could be and identifying the most appropriate countermeasures to cancel them or reduce them to a minimum.

Sustainable companies as synonymous with solidity

Cerved Rating Agencyfive times lower risk of default

This statistic, taken from the second edition of theESG Connect research

These in particular include: the achievement of the United Nations' sustainable development goals (17 SDGs), improving the attractiveness of talent and capital, encouraging communication of sustainability to its stakeholdersinnovative capacity of the companyStakeholder Engagement

The challenge of sustainability

The paradigm shift, from a perspective of maximizing value for shareholders, seen in the past as the true mission of managers, to a perspective that puts the well-being of stakeholders at the center as corporate objective, places companies faced with an urgent change

• Economic responsibility
• Social responsibility
• Environmental responsibility

  Sustainability is therefore a challenge for the future of companies because a company that does not recognize its value will not be able to fit in and survive in a global context

  • Considering ESG issues as relevant and satisfy the needs of its stakeholders;
  • Map, consider and address the risks characterizing the company's activity;
  • Identify, prevent and mitigate possible negative effects
  • Plan socially responsible management that looks with interest to the future;
  • Create a shared lasting value and consolidate business continuity.

  In conclusion, the best way forward is to start a strategic reflection by defining the sustainability and the roadmap to undertake to reach them, starting from one's own vocations, from the expectations of stakeholders and trying to enhance what has already been done.

  This path often encounters obstacles and in a context where corporate sustainability has become one of the topics of greatest interest, Malerba&Partners follows companies and SMEs along the entire path to provide them with the tools necessary to face it successfully. From here the strategic partnership with EFTILIA was born