The Department of Finance released the statistics concerning the IRES and IRAP tax returns with reference to fiscal year 2009 that were presented in the course of 2010 and 2011. For joint-stock companies (including several large-sized enterprises) whose business period does not coincide with the calendar year, the deadline for the 2009 tax declaration was September 2011.
The Department of Finance also published, alongside with Agenzia delle Entrate (the inland revenue office) and So.Se. Spa, the statistics concerning the data submitted to calculate the 2010 studi di settore, which referred to the 2009 tax period.
The information thus provided completes the statistical data concerning the tax returns for the 2009 fiscal year.
IRES
2009 was characterised by a profound economic crisis, which led to a sharp fall in both real and nominal GDP, down respectively 5.1% and 3.1%. The crisis affected the entity of tax returns of all joint-stock companies.
In fiscal year 2009, joint-stock companies filed 1,056,685 tax declarations, up 2.6% from the previous year. Higher than average increases were recorded in the "electricity providers" sector (+36%) and that of "professional activities " (+6.6%). The tax consolidation regime involved 21.352 companies, up 5.9% with respect to 2008.
A large majority of joint-stock companies (86.2%) are limited liability companies.
The economic crisis may explain the strong increase in the number of tax returns filed by companies that have declared bankruptcy (+61.67%) or wound up (+52.08%).
The downturn is also reflected in the proportion of profit-making companies, which fell two percentage points to 57.9%, leading, consequently, to an increase in the number of companies that have declared losses (up to 37% from 35% in 2008). Corporate income continued to be strongly concentrated in central and northern Italy. The southern region, as well as the islands, generated a mere 8.5% of total corporate income.
Average declared income, at € 256,980, fell 6.7% compared to fiscal year 2008. While the most significant fall was recorded in the islands (-17.6%), the decline was slower in the northwest (-2.6%). A closer analysis showed that average earnings from continuing operations, amounting to € 270,000, rose 5.2% with respect to total earnings, while average loss, at € 146,000, was 9.3% higher than the total.
In 2009, joint-stock companies declared an average taxable income of € 126,482 million compared to € 137,244 million in 2008. While the decrease of nearly 8 percentage points was primarily due to the serious economic crisis, the effects of a number of new rules should also be taken into due consideration, namely the significant incentive granted for the acquisition of equipment during the downturn (the so-called "Tremonti-ter" law).
The companies subject to ordinary taxation declared an average tax of € 40,180 euro, while groups opting for the consolidated tax regime declared an average tax of € 4,540,230 (respectively € 44,530 and € 4,351,350 in 2008). A comparison with 2008, data showed a relevant decline in the tax declared by entities operating in the manufacturing industry (- 32.3%).
The large-sized companies (with turnovers in excess of € 50 million) declared half of the net tax revenue and the entities that filed the biggest returns were manufacturing companies and financial companies (insurance and commerce).
IRAP
The number of subjects that presented IRAP tax returns for fiscal year 2009 was 4,882,741 (-3.3% from 2008). The decrease, already occurring in 2008, principally affected individuals as a growing number of them joined the "minimum tax regime " (+23.8% from) and benefitted from the granting of additional IRAP exemption clauses.
Subjects declaring a positive production value amounted to 4,758,337 (-2.9% from the previous year), generating a total amount of € 657 billion (-7.9% with respect to 2008), out of which 61% was produced by joint-stock companies. The taxable base amounted to € 655 billion, down 6.5% with respect to 2008. The change was due to a number of different factors, namely the decrease in the number of subjects that filed tax returns (as a consequence of the growing number of "minimum tax regime" applicants and the granting of additional IRAP exemption clauses) and, above all, the economic crisis, which fully manifested its effects in 2009.
The distribution by economic activity of the taxable amount, including Public Administration which carries out "institutional activities," shows that without taking into account the activities carried out by the "Public Administration," approximately 50% of the tax base was generated by four sectors: "manufacturing" (19%), "trade" (12%), "financial activities " (12%), "construction" (7%).
Compared to the previous year, the manufacturing sector recorded a 22% decrease, which represents 65% of the total decline of the tax base, while the financial and energy sectors presented an increase (respectively by 16% and 13%).
The amount declared for 2009 amounted to € 31.9 billion (-5.4% from 2008), with a average value of € 9,840. While the contraction was more relevant in joint-stock companies (-6.5%), which represented 55% of total tax income, it was less significant in the Public Administration sector (-2%), which represented 30% of overall tax revenue.
Territorial distribution by business location showed that 54% of the tax revenue was produced in the north, while 16% in the south, substantially in line with previous year figures.
STUDI DI SETTORE
Studi di settore involved a total of 500,000 taxpayers, out of which 63% were individuals and 16% partnerships and entities.
The number of taxpayers involved in studi di settore diminished with respect to the previous year (-0,7%) as a sizeable number newly joined the minimum tax regime (up 24% from approximately 507,000 in 2008 to approximately 627,000 in 2009). All sectors recorded a slight decrease in the number of taxpayers with respect to the previous year: manufacturing -1.4%; services -0.4%; professionals -0.8%; trade -0.9%.
Impact of the crisis on profits or declared retributions
In fiscal year 2009, a set of new rules was approved to take into account the effects of the profound economic crisis. The "trickle-down" revision in the calculation of reference revenue levels went all the way to consider the specificities of single taxpayers, and may be classified into four typologies: 1) analyses of economic normality; 2) specific adjustments to take into account the crisis; 3) adjustments at a company level that take into account the present economic situation; 4) adjustments at an individual level that take into account the present economic situation.
The economic crisis impacted all the amounts declared by the taxpayers subject to studi di settore. In particular, data relating to total incomes/fees was affected not only by the economic crisis but also by the decrease in the number of those who filed returns which was brought about as a consequence of those who opted for the minimum tax regime. Consequently, a fall in total earnings/fees was recorded in all sectors, with a total reduction of 5.2% (the total amount declared being € 790.5 billion).
To gauge the impact of the economic crisis on average incomes/fees, data was analysed by excluding "Individuals with earnings/fees up to € 30,000," taxpayers who are potentially eligible for the minimum tax regime. All sectors recorded in 2009 a slight decrease in average earnings/fees (-2%) referring exclusively to taxpayers who have declared a congruous income (with an increase of approximately 1% from 2007 to 2008), while for taxpayers who declared an incongruous income, the decrease was more significant (-11.6%, compared to a decrease of 4.6% in 2008 from 2007). It should be observed that a taxpayer is considered "congruous" if the declared earnings or fees are equal or higher than those estimated by the studi di settore, after having applied the indicators of economic normality.
As for territorial distribution, average earnings and fees declared by "congruous" taxpayers decreased slightly in 2009 over 2008 (the sharpest fall was recorded in the northwest, down 2.7%), while those declared by "incongruous" taxpayers declined everywhere, especially in the northeast (-12.6) and the south (-12.5%).
Effects of the economic crisis on corporate and self-employed income
Incomes declared by subjects who apply studi di settore recorded in 2009 a total value of € 99.3 billion, down 8.7% from the previous year.
In 2009, while total income fell sharply in the manufacturing sector (-37%), it had conspicuously declined also in trade and services (-7%). The crisis appeared, on the other hand, to have affected the professional sector in a less significant way (-1%).
2009 also saw a decrease in the average incomes declared by "congruous" taxpayers (-10.7%) compared to the previous year. The decline was sharpest in the manufacturing sector (-30.7%), followed by services (-10.4%), trade (-6.7%) and professionals (-2.1% circa). As for "incongruous" taxpayers, there was a strong decrease of average income in the manufacturing and trade sectors, where average income fell on average € 27,200 and € 900 respectively. Geographically, income fell in all areas. In particular, the incomes of "congruous" taxpayers declined most in the northwest (-12%) and less in the south (-8%). Income of "incongruous" taxpayers fell across the country, peaking, in this case as well, in the northwest (-120% from a profit of € 8,600 to a loss of € 1,700 euro). Income declined less in the islands (-40%).
Distribution by legal make-up showed that in 2009 average income decrease was more significant in limited liability companies (-22.1%), followed by partnerships (-9.8%) and individuals (-3.6%) whose incomes, unlike in the previous year, declined only slightly.
Income levels of "congruous" and "incongruous" taxpayers
A comparison of the income levels of these categories of taxpayers highlighted very significant differences. In the professional sector, the average income ranges from € 77.700 of the "congruous" to € 34.400 of the "incongruous;" in the manufacturing sectors from € 36,100 to a loss of € 27,200; in the services from € 36,000 to € 5,000; and in the trade sector from € 29,100 to a loss of € 900.
All statistical data as well as the analyses of tax declarations and studi di settore are available at www.finanze.gov.it under the "Dati e statistiche fiscali" section.
This incentive, which allows companies to slash profits for tax purposes, is granted to those companies that acquire from manufacturers coming under division 28 of the Ateco 2007 classification - Manufacture of machinery and equipment n.c.e.
Please note that the normative framework concerning the minimum tax regime was recently amended with DL 98/2011 and enforced starting 2012.
Following a series of new interpretative adjustments carried out by the Inland Revenue Office concerning the tax requirements for the self-employed ("requisito impositivo dell'autonoma organizzazione"), which have been the object of a number of rulings by the Supreme Court.