Advance Communication of Occasional Hires
The Labour-Fiscal Decree no. 146 2021, linked to the Budget Law 2022, introduced the obligation of prior communication of the use of occasional self-employment.
On this subject, the Labour Inspectorate has published note no. 29-2022, with instructions on how to comply.
Clarification in the form of FAQs have also been published with note no. 109 of 27 January 2022 and the new note no. 393 of 1 March 2022 .
Who is affected by the new rules
Individuals and other entities who carry on a business (therefore excluding professionals) in respect of occasional self-employed workers, i.e. workers who fall under the definition contained in Article 2222 of the Civil Code (see below).
The following are therefore excluded:
- coordinated and continuous collaboration;
- relationships established pursuant to and in the forms of Article 54-bis of Decree-Law no. 50/2017 (converted by Law no. 96/2017)
- the intellectual professions, which are subject to the special rules contained in Articles 2229 of the Civil Code; and
- in general, all self-employed activities exercised on a regular basis and falling within the scope of VAT regime;
- employment relationships “intermediated by digital platform, including self-employed activities not habitually exercised under Article 67, paragraph 1, letter l), TUIR, subject to specific reporting requirements ( DL 152 2021: within the twentieth day of the month following the establishment of the employment relationship)
Timing of advance notice
The obligation concerns relationships started after the entry into force of the provision or, even if started before, still in effect on 11 January 2022, and the communication must be sent by 18 January 2022.
For assignments conferred after 11 January, the communication must be made before the start of the service of the occasional self-employed worker, possibly resulting from the assignment letter.
Advance Notice via Government Portal
The Servizi Lavoro portal of the Ministry of Labour (accessible only with SPID), contaoins details of the new procedure for the advance communication of occasional self-employment pursuant to Article 14 of Legislative Decree no. 81/2008.
With regard to the “deadline within which the work or service will be completed”, the model allows you to choose three distinct hypotheses
– within 7 days
– within 15 days
– within 30 days
As already clarified in Note no. 29/2022, in the event that the work or service is not completed within the time period indicated, it will be necessary to make a new notification.
Until 30 April 2022, it is still be possible to make the notification in question by e-mail.
From 1 May 2022, however, the only valid channel will be the electronic channel made available by the Ministry, and communications made by e-mail directly to the ITL offices will not be considered valid.
FAQ of the Ministry with exceptions and clarifications with respect to this communication obligation.
Importance of the “occasional”
Offering services on an occasional basis can provide an attractive tax and social security regime. We are talking about the provision of services (e.g. teaching, IT services) on an occasional basis (Prestazione Occasionale). This regime applies to individuals who want to undertake a professional (intellectual) activity in an “occasional” and “sporadic” manner. If your activities are indeed “occasional”, you are not required to register for VAT (aprire la partita IVA) because you conduct the activities on a non-habitual and non-continuous manner.
The amount of the fees you receive is not relevant in this initial analysis. The famous threshold of 5,000 euros of activity without needing to register for VAT does not actually exist in law. There is a threshold of Euro 4,800 below which you are not liable to income tax on income deriving from the provision of occasional services. Note this threshold is in proportion to the time from when you start to the end of the year, so if you start at the beginning of November the Euro 4,800 must be multiplied by 2/12ths (it’s actually the number of days) – so you can earn up to approx. Euro 800 in the first year without paying tax.
There is a threshold of Euro 5,000, on an annual basis, above which there is a liability to register with the social security authority (usually INPS) and pay social security contributions on your earnings.
But the analysis is not based on these limits. It must be based on whether the services you are offering are indeed “occasional”. If you have e.g. a web site, or business cards or publicity detailing your offering, or you sign a contract for the provision of your services, then the Tax Agency may well consider your activity not to be occasional. If you work regularly for the same client, even issuing receipts once a month, it is is difficult to maintain that your activity is “occasional”. The text book example of occasional services is a pensioner who repairs radios – a paid hobby – for friends and others on word of mouth basis.
For example, offering services of teaching English every now and again, on a word of mouth basis, without an “infrastructure” (e.g no web site/facebook page, staff, equipment and machinery), ideally visiting students for lessons, and not setting up an office (even at home), can allow you to stay within the regime applicable to occasional services, at elast at the outset.
If you want to do this, you need to make sure that your services are indeed occasional – so provided sporadically every now and again. If not, you will be liable for penalties for failing to register for VAT.
If any of your clients are running a business and is what is defined by law a “tax withholding agent” e.g. a school or other business or professional registered for VAT, then they must withhold tax on payment to you. The rate is generally 20% of your fee.
For example if you issue a bill for Euro 1,000, the client will give you Euro 800. The Euro 200 the client withholds is paid by the to the Tax Agency the following. The client is essentially paying your tax on your behalf. At the end of the year, assuming you are under the Euro 4,800 threshold you will need to file tax return, showing your total fees. Since you pay no tax under the threshold you will be entitled to a refund of the tax that has been withheld. Obviously this allows the Tax Agency a chance to review whether you should in fact be registered for VAT. This is deliberate – and part of the Tax Agency’s armourty in fighting tax evasion.
If you invoice private clients there is no withholding tax requirement.
You can write your own receipt for occasional services on a normal sheet of paper, provided that you show the following:
- Your name and address;
- The name and address of the client;
- The date of issue of the receipt and a progressive number on the receipt;
- The fee for your work;
- Any withholding tax (equal to 20% of the gross compensation).
- The net amount paid to you by the principal (if withholding has been made).
- The Euro 2.00 for the stamp (see below) if you want to charge this to the client
Stamp Duty on the Receipt
Since we are talking about a “non-fiscal” receipt, the legislation requires you to affix a Euro 2.00 revenue stamp (bollo) on the receipt, where the amount of the service exceeds the threshold of Euro 77.47. No stamp is needed for receipts issued showing a lower amount than this.
You can buy a stock of stamps tobacconists and other authorised outlets. The revenue stamp must bear a date prior to that of issue of the receipt, otherwise penalties apply.
You can ask the client to reimburse the cost of the stamp by adding the Euro 2.00 to the invoice.