[co-author: Andrea Nizza]

Following the tax relief introduced by Article 22 of Law Decree No. 124/2019, as converted into law by Law No. 157/2019, according to which merchants may obtain tax credits of 30% of the fees charged for the acceptance of card payments or payments made with other traceable electronic payment instruments in the context of the supply of goods and services to consumers from 1 July 2020 and provided that the merchant revenues of the previous tax year do not exceed EUR 400,000, the Italian legislator introduced further tax incentives with the aim of fostering the adoption of electronic payment instruments.

Background

Article 22 of Law Decree No. 124/2019 ("Tax Decree"), as well as the relevant implementing regulations, i.e. (i) Bank of Italy Regulation of 21 April 2020 and (ii) Italian Revenue Agency Regulation of 29 April 2020, were analysed in our newsletter of 14 May 2020 (“Bank of Italy Regulation on acquirers reporting obligations for tax credit purposes”, available here).

Change in the law

Article 22 of Tax Decree has been recently amended by Article 1, para. 10, of Law Decree No. 99/2021 (then replaced by art. 11-bis, para. 10, of Law Decree No. 73/2021, as converted into Law No. 106/2021).

The above provisions added a new para. 1-ter to Article 22 of the Tax Decree (“Para. 1-ter”), providing that merchants supplying goods or services to consumers may obtain a tax credit equal to 100% of the fees accrued from 1 July 2021 to 30 June 2022, for the adoption of:

• electronic payment instruments connected to instruments allowing electronic storage and telematic transmission of the data of daily proceeds (“registratori telematici”, as per Article 2, para. 3, of Legislative Decree No. 127/2015);
• advanced electronic payment instruments allowing the storage, inalterability and security of the data (as per Article 2, para. 5-bis, of Legislative Decree No. 127/2015).

Para. 1-ter was implemented under the Italian Revenue Agency Regulation of 6 August 2021 (the “Second Agency Regulation”) (available here in Italian only), setting out the technical requirements for the connection of the electronic payment instruments to the registratori telematici referred to in Article 2, para. 3, of Legislative Decree No. 127/2015.

Tax credits for electronic payments instruments

In order to foster the adoption of electronic payment instruments, the Italian lawmaker has provided for two additional tax incentives, set forth by Article 22-bis of the Tax Decree.

Firstly, a tax credit (for a maximum amount of EUR 160) is available to merchants supplying goods or services to consumers who, between 1 July 2021 and 30 June 2022, purchase, lease or use electronic payment instruments connected to the registratori telematici referred to in Article 2, para. 3, of Legislative Decree No. 127/2015.

The above tax credit is parameterized to the cost borne to purchase, lease or use said electronic payment instruments, as well as to the expenses incurred to connect such devices, and its amount (ranging between 10% and 70%) varies based on the revenues generated by the merchant in the previous tax year.

The technical requirements set out by the Second Agency Regulation also apply for the purposes of the tax credit at issue.

Lastly, a tax credit (for a maximum amount of EUR 320) is available to merchants supplying goods or services to consumers, purchasing, leasing or using, in the year 2022, advanced electronic payment instruments also allowing electronic storage and telematic transmission pursuant to Article 2, para. 1, of Legislative Decree No. 127/2015. Also in this case, the amount of the tax credit (ranging between 40% and 100%) varies based on the revenues generated by the merchant in the previous tax year.

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