Italy updates

Arbitration & ADR

Contributed by Mariconda e Associati Studio Legale
International arbitration clauses and jurisdictional preventive regulation
  • Italy
  • May 17 2018

The United Sections of the Court of Cassation recently addressed the matter of jurisdictional preventive regulations and seized the opportunity to reaffirm the jurisdictional nature of arbitration proceedings. The court affirmed the principle according to which an international arbitration clause can invalidate the jurisdiction of the ordinary Italian courts regarding a notice of objection against a preliminary injunction.

Company disputes: arbitration or judicial proceedings?
  • Italy
  • March 29 2018

The Court of Cassation recently ruled on the conferment of a company dispute to the jurisdiction of an arbitral tribunal based on the arbitration clause contained in the company's articles of association. The tribunal had accepted the exception raised by the counterparties concerning its lack of jurisdiction, but the claimant appealed this decision before the Court of Cassation.

Rules governing arbitration proceedings between business partners
  • Italy
  • June 29 2017

A recent Supreme Court of Cassation decision addressed the invalidity of arbitration clauses that do not agree with Decree-Law 5/2003, which concerns judicial procedures for corporate matters. The court found that in arbitration proceedings concerning disputes between business partners, the clause referring to the appointment of arbitrators assigned to the parties will be void even if stipulated before Decree-Law 5/2003 came into force.

Appealability of arbitral decision excluding partners in cooperative
  • Italy
  • May 04 2017

The United Sections of the Supreme Court of Cassation recently addressed a case concerning a cooperative that had been sued before an arbitral tribunal by three partners who alleged that their exclusion, which the company had approved, had been illegitimate. The court found that the 30-day forfeiture term to appeal a decision excluding a partner of a cooperative, as provided for by the Civil Code, is applicable even in the presence of an arbitration clause in the cooperative's articles of association.

Supreme Court of Cassation issues decision on appealability of partial arbitral awards
  • Italy
  • February 16 2017

A recent Supreme Court of Cassation decision examined the long-standing question of how to interpret Article 827(3) of the Code of Civil Procedure, which provides that an arbitral award which partially decides the merit of the dispute is immediately appealable, whereas the award which decides some of the questions raised, without resolving the arbitral proceeding, is appealable only together with the final decision.


Aviation

Contributed by Studio Pierallini
Application of tax on aircraft noise overruled
  • Italy
  • December 20 2017

The Rome Division of the Tax Commission recently ordered the full refund of debit notes issued by the Lazio region to a foreign carrier for payment of the tax on aircraft noise pursuant to Regional Law 2/2013. The Tax Commission stated that the carrier had not breached EU Directive 2002/30/EC. Accordingly, it cancelled the debit notes issued by the Lazio region to the foreign carrier and ordered a complete refund of the tax paid by the carrier under the tax on aircraft noise.

Italian case law upholds that hidden manufacturing defect is an extraordinary circumstance
  • Italy
  • November 22 2017

The most recent Italian case law has upheld the European Court of Justice's interpretation of EU Regulation 261/2004 in Wallentin-Hermann and Van der Lans by qualifying a hidden manufacturing defect as an 'extraordinary circumstance' under the meaning of Article 5(3) of the regulation and rejecting passenger claims for compensation under Article 7 of the regulation.

Alitalia recovery plan takes flight
  • Italy
  • July 19 2017

In a recent decree the Ministry for the Economic Development started the extraordinary administration procedure for Alitalia pursuant to Law 39/2004 and appointed commissioners to lead the company throughout the procedure. The main purpose of the extraordinary administration is to implement a recovery plan meant to preserve employment levels through the financial restructuring of the company, the sale of the business as a whole or the sale of the business, assets and contracts part by part.

No-show rule and round-trip tickets
  • Italy
  • January 25 2017

The Competition Authority has often fined airlines for imposing limits on round-trip tickets which force passengers to take flights in the order listed on the original ticket (ie, the so-called 'no-show rule'). The Council of State recently found this rule to be lawful. However, to protect consumer rights, the rule must strike a balance between the commercial needs of airlines and consumer rights. This decision confirms the increased focus on consumer rights without neglecting the commercial needs of airlines.

Assignment of passenger rights to compensation
  • Italy
  • November 02 2016

Italian courts are facing an increase in judicial claims by debt collection companies for denied boarding and the cancellation and delay of flights pursuant to EU Regulation 261/2004. The claims are based on the assignment of passenger rights to compensation under the regulation. The increase in judicial claims has led to jurisdictional and legal entitlement issues which have been resolved by different Italian court approaches.


Banking

Contributed by Legance Avvocati Associati
Remuneration policies in banking sector: public consultation on recommended changes
  • Italy
  • April 20 2018

The Bank of Italy recently commenced a public consultation on the proposed amendments to Regulation 285/2013 on remuneration policies in the banking sector, the main aim of which is to align the regulation with the European Banking Authority Guidelines of December 2015 and ensure compliance with Articles 74(3) and 75(2) of the EU Capital Requirements Directive. The consultation will end on May 14 2018.

New lease of life in Italy
  • Italy
  • February 02 2018

With the Competition Law's recent entry into force, the legislature has finally established a clear legal framework by defining the concept of a 'financial lease' and the consequences for banks (or leasing companies) and clients following a breach of contract. These provisions make financial leases a more transparent tool with the aim of boosting their appeal and increasing investment by Italian companies, thus fostering economic growth.

Supreme Court addresses issue of supervening usury
  • Italy
  • November 17 2017

The Italian courts, as well as scholars and legal practitioners, have debated the concept of supervening usury for many years. Until recently, it was unclear whether interest stipulated below the usury threshold at the time of contract, but exceeding such threshold at the time of payment, was usurious. The Supreme Court finally addressed this issue in a recent decision, which ruled out supervening usury entirely.


Corporate Tax

Contributed by Studio Legale Tributario Biscozzi Nobili
Implementing BEPS Actions 8 to 10
  • Italy
  • July 20 2018

The new principles introduced by Actions 8 to 10 of the Base Erosion and Profit Shifting project have been reflected in Italy through Decree-Law 50/2017's amendments to Article 110(7) of the Income Tax Code. The new article includes a specific reference to the arm's-length principle and provides for implementing provisions to be issued by the Ministry of Finance to align with international best practices.

Budget Law 2018 – new regime applicable to tax on blacklisted source dividends
  • Italy
  • May 04 2018

The Budget Law 2018 introduced, among other things, amendments to the tax regime concerning dividends from non-resident companies located in low-tax jurisdictions (ie, blacklisted companies). 'Blacklisted companies' are entities resident or located in jurisdictions other than EU or European Economic Area member states, whose ordinary or special tax regime grants a nominal tax rate that is 50% lower than the Italian one.

New tax rules for dividends and capital gains realised by non-business individuals
  • Italy
  • February 23 2018

The recently approved Budget Law has harmonised the taxation of dividends and capital gains earned by non-business individuals on substantial and non-substantial participation held in Italian and foreign companies, among other things. Companies and partnerships will be unaffected by these changes, as the distinction between substantial and non-substantial participation is irrelevant.

Notional interest deduction – an overview
  • Italy
  • November 24 2017

The notional interest deduction (NID) regime has been in effect since the 2011 fiscal year. Under this regime, Italian resident companies and permanent establishments of non-resident companies may deduct notional interest from their corporate income taxable base. The NID is calculated according to the equity increase (ie, new equity rate) from the end of the 2010 fiscal year, multiplied by a rate determined annually.

Country-by-country reporting – obligations of Italian subsidiaries of multinational groups
  • Italy
  • May 19 2017

Articles 1(145) and (146) of Law 208/2015 provide that the parent company of a multinational group resident in Italy must file a country-by-country report with the tax authorities within the specified time limit. The secondary legislation enacted by the Ministry of Finance's February 2017 decree-law provides further details on country-by-country reporting requirements and application rules, considering Organisation for Economic Cooperation and Development recommendations and EU Directive 2016/881/EU.


Employment & Benefits

Contributed by Stanchi Studio Legale
Supreme Court finds dismissal unlawful due to use of investigator to monitor job performance
  • Italy
  • July 18 2018

The Supreme Court recently found that a dismissal for just cause is unlawful if the employer uses an investigator to monitor an employee's job performance. The ban on the use of investigative agencies also applies to activities carried out by employees off their employer's premises and renders investigative reports unusable unless they concern behaviour that suggests criminal activity.

Employees can be dismissed if job is eliminated in company reorganisation
  • Italy
  • May 09 2018

The Supreme Court recently found that in the case of a dismissal of an executive due to cost reductions, the main requirement is that the company's reorganisation process must be genuine. Employers are not required to prove that they are in economic difficulty. Rather, it is enough for them to demonstrate that the employee's job will no longer exist due to organisational changes.

Supreme Court decision on use of cameras in workplace and protection of employee dignity and privacy
  • Italy
  • February 28 2018

The Supreme Court recently stated that an employer that installs a camera in its workplace to monitor an employee's activity can be found guilty of a crime under Decree-Law 196/03, even if the camera was installed to protect goods and property. The court found that the dignity and privacy of the employee in question were more worthy of protection than the economic value of corporate goods and property and that reforms in this regard introduced by the Jobs Act were inapplicable.

Supreme Court finds that whistleblowers cannot be dismissed for just cause
  • Italy
  • December 20 2017

The Supreme Court recently found that an employee who notifies the judicial authorities of facts relating to his or her employer which constitute evidence of criminal activity cannot be dismissed for just cause. As regards the disciplinary liability of whistleblowing employees, it is insufficient for a complaint to be unfounded, as this does not prove that the complaint was slanderous.

Employee challenges dismissal following transfer of undertaking
  • Italy
  • October 18 2017

An employee recently challenged her dismissal, claiming that she had been employed by a cooperative as a cleaner in a healthcare structure under a contract between the two parties. The healthcare structure was subsequently incorporated into another company, which decided to internalise the services performed by the cooperative and terminate the contract between the two parties. The Court of Milan declared the dismissal to be unlawful on the grounds that a transfer of undertaking had occurred.