From 1 January 2018 professionals’ and independent workers’ VAT credits and social security contributions have become privileged debts in bankruptcy and, more generally, in insolvency proceedings.
The new wording of Article 2751-bis, No.2 of the Italian Civil Code, introduced by paragraph 474 of Article 1 of the 2018 Italian Budget Law (Law No. 205 of 27 December 2017) has come into force at the beginning of 2018. It provides that: “A general privilege on movable properties applies to those claims concerning: … 2) the remuneration of professionals and of any other independent worker due for the last two years of work, including the additional contribution to be paid to the respective pension and social security fund and the amount due to be recovered in respect of the value added tax”.
The aforementioned legislative intervention marks an important change for all the professionals who will now be able to file their claims as privileged, thus no longer having their VAT credit and the social security contributions applied to the taxable amount downgraded to the status of unsecured claims.
Therefore, starting from 1st January 2018 through the modification of Article 2751-bis of the Italian Civil Code, receivers will have to grant the professional privilege not only to the remuneration but also to the VAT and social security contributions applied to it.
It is still unclear whether the extension of the privilege operates retroactively.
In this regard, the provision introduced by the Budget Law is silent. However, the legal validity of bankruptcy judgment assumed by the decree allowing claims in bankruptcy rendered by the judge seems to exclude the possibility that the professional may plead the occurrence of the privilege in the bankruptcy proceedings in which the decree allowing claims has already been issued.
This is though not the case with the composition with creditors, since it does not provide a judicial assessment of the liabilities and the creditor is always entitled to assert his / her right towards the company seeking the composition. However, in this context it still unclear how these situations will be handled, since in some cases the new privilege could alter significantly the conditions of the composition with creditors and even undermine its feasibility.
(Federico Tassinari – federico.tassinari@studiozunarelli.com)
