Cura Italia decree and short-term rentals: implications of the maneuver against the effects of Covid-19 for the economy and tourism

Il Cura Italia Decree it is a maxi provision containing extraordinary measures for the Coronavirus emergency published in the Official Gazette (Decree-Law No. 17 of 2020 March 18).

What a decree law? It is a regulatory act of a provisional nature having the force of law, adopted in extraordinary cases of necessity and urgency by the Government.

What is happening in Italy these days can really be classified as an exceptional event and a serious disturbance to the economy.

The Cura Italia Decree, already published in the Official Gazette, was issued to deal with the Coronavirus emergency in support of the health system and in support of families, workers and businesses.

The measures adopted by the Government are attributable to a real financial maneuver and it is estimated that i 25 billion euros allocated they will activate flows for 350 billion.

An economic strategy that copes with the crisis, a provision defined as omnibus, because it refers to each sector affected by the COVID -19 emergency.

They have been allocated 3,5 billion for Healthcare, 10 billion for Work, which will make it possible to adopt the Redundancy Fund also for companies with only one worker, to facilitate access to credit and to suspend payments of withholding taxes, contributions and insurance.

Below, the aspects of the Cura Italia Decree examined by the CleanBnB Team, which directly or indirectly involve the tourist activities.

In fact, over 5% of the GDP and over 6% of the country's employees are attributable to the tourism sector in Italy (data from the Bank of Italy); but the overall impact of the sector on the national economy is reasonably higher if those economic sectors closely correlated with tourism are included, such as the restaurant business for example.

A market segment which, also thanks to the expansion of the non-hotel offer due to the diffusion of the sharing economy, of short-term leases and online intermediation channels, has driven the Italian economy and increased the international demand for tourist services.

However, it is also the time for operators in the sector to reach out to a country in trouble.

The Legislative Decree provides, among other provisions, the possibility for the authorities to proceed with the Requisition in use or in ownership di accommodation to deal with the emergency and to host people under health surveillance and self-isolation.

This provision will provide for the payment of a requisition indemnity related to the current market value of the requisitioned property or that of properties with similar characteristics.

A measure which in essence was even anticipated by the initiative #StayAtOurHome with which CleanBnB, together with other short-term rental operators, has made managed houses available throughout Italy for doctors and nurses who are engaged in the fight against the Coronavirus. CleanBnB also supports a similar initiative which Airbnb is preparing directly on its own platform.

We believe that initiatives like this are an essential contribution to supporting the efforts that everyone in the country is making to get out of the crisis as quickly as possible.

The Cura Italia Decree also provides for a series of measures to support work and businesses and the extension of social shock absorbers for all workers.

With reference to companies and citizens, here are some of the economic measures contained in the maneuver that will produce effects for the sector in which we operate:

• New treatment of ordinary layoffs for companies that were in extraordinary CIG (Cassa Integrazione Guadagni) and for those that have the solidarity check in progress. The measures are also extended to companies that do not benefit from the protections currently in place for the suspension of work or the reduction of working hours, not even for agricultural workers, seasonal workers and the tourism sector, the self-employed and those with a fixed-term contract.
• Leave and compensation for employees of the private sector, workers enrolled in the separate management.
• Indemnity for VAT-registered professionals and workers with a coordinated and continuous collaboration relationship.
• Establishment of the “Fund for last resort income”, in favor of employees and self-employed who, as a result of the epidemiological emergency from COVID-19, have ceased, reduced or suspended their activity.
• Suspension of dismissal appeal procedures.
• Central SME guarantee fund for a period of 9 months the guarantee is granted free of charge, the maximum guaranteed amount for each company is raised to 5 million euros.
• Export credit measures. To support export credit in the tourism sector, the Ministry of the Economy will be able to issue the State guarantee in favor of Sace Spa. For micro and small and medium-sized enterprises, there is also a clause to save credit lines and suspend mortgage and loan installments until 30 September 2020. These operations will be subsidized with a special Fund, with an endowment of 1,73 billion, which will cover the banks for 33% of the amount of mortgages and loans.
• Financial support measures for businesses and for companies that transfer credits claimed by defaulting debtors, tax breaks and credits are envisaged.
• Financial support measures for micro, small and medium enterprises in relation to debt exposures towards banks and other financial intermediaries with the possibility of making use of new financial support measures.
• Business liquidity support through guarantee mechanisms endorsed by the State, it is issued in favor of Cassa depositi e prestiti SpA up to a maximum of eighty percent of the assumed exposure. For tourist accommodation companies, travel and tourism agencies and tour operators, the terms of payments relating to the value added tax due in March 2020 are suspended.
• Suspension of the terms of obligations and tax and social security payments, while the provision concerning the terms relating to the 2020 pre-completed tax return remains unaffected. Payments from self-assessment which expire in the period between 8 March 2020 and 31 March 2020 are suspended.
• Tax credit for sanitation costs of work environments to the extent of 50% of those incurred to sanitize work environments as well as tax credit for shops and stores to the extent of 60% of the amount of the rent, relating to the month of March 2020.
• Tax incentives for donations (donations) in cash and in kind, carried out in favor of the State, and of legally recognized non-profit foundations and associations, aimed at financing the anti COVID-19 measures, a deduction from the gross tax for income tax purposes equal to 30 %, for an amount not exceeding 30.000 euros.
• Suspension of the terms relating to the activity of the offices of the tax authorities and the terms of payment of the loads entrusted to the collection agent.
• Reimbursement of residence contracts and termination of contracts for the purchase of tickets for shows, museums and other places of culture. Buyers must present a specific application within thirty days of the date the decree comes into force.
• Extension of the validity of identification documents until 31 August 2020. Validity for expatriation purposes remains limited to the expiry date indicated in the document.
• Rules on the conduct of company meetings, by way of derogation from the law in force, the ordinary shareholders' meeting is convened within one hundred and eighty days of the end of the financial year. With the notice convening the ordinary or extraordinary shareholders' meetings, joint-stock companies, limited partnerships, limited liability companies, cooperative companies and mutual insurance companies may also provide for the expression of votes electronically or by correspondence and participation in the meeting by means of telecommunication.

A complex economic strategy which provides for investments, subsidies, tax reductions and simplifications which has the intention of relaunching the country's economy and which seems to be only the precursor of a new decree which could arrive in April, with the hope that Italy can also count on the new resources that the European Union and the European Central Bank are preparing to allocate.

CleanBnB has carefully examined the implications of the decree with its labour, tax and financial consultants and is therefore ready to make its know-how available to all property managers who manage short-term rental properties in their city, who are interested in learning more.

We get support requests daily and We are happy to lend a hand in this difficult moment. Write to us or call us to learn more about the following aspects, in light of the decree:

• Cash management and financial needs
• Management of rental contracts
• Management of employees and collaborators
• Management of cancellation policies with Airbnb and Booking
• Management of service contracts with suppliers