The third issue of the Ministry of the Economy and Finance, “The Narrow Path”, was published in English (click here). This edition highlights the reforms adopted by the Italian government in the following areas: the judicial system, the National Health Service and the tax system. The Newsletter briefly illustrates the successful case of Baker Hughes-General Electrics, followed by the Foreign Investment Committee.
The Italian Government has adopted a comprehensive strategy to improve the Judicial System, whose functioning has a major impact on “doing business”. To date, we are in a rather paradoxical situation that Italy sees 2 countries in the EU for the relationship between judicial cases resolved and started, but the last place for the duration of civil and commercial processes, despite the progress made in 2 years (13% reduction in time). The average duration of civil proceedings is still around 520 days, compared to 248 in the average of European countries, far beyond the “reasonable times” provided by the Pinto law of 2001 (with significant differences depending on the reference region). Positive results can be attributed to the general reorganization of the judicial system, for example, the creation of specialized courts (including commercial ones, operating since 2012), digitalization of civil proceedings and incentives for out-of-court resolution of disputes.
Starting from 2003, a rationalization of the National Health Service (SSN) has begun: all citizens and residents in Italy are entitled to health insurance and must have a health card with an identification number corresponding to the tax code. A complex computer network has been created connecting patients, family physicians (65,000), pharmacies (17,000) as well as public and private hospitals, with the aim of tracking all the requirements (about 800,000 annually). This system allows, on the one hand, to immediately visualize the patient’s “clinical history” and, on the other hand, to monitor healthcare performance in terms of efficiency and expense by reducing tax fraud. At present, the system has already implemented 15 regions over 20, 11 million health cards have been generated, and nearly 24 million dossiers have been scanned.
At the tax level, a specific interception procedure was introduced in 2015 with a view to facilitating large investments. Investors may submit to the Revenue Agency (required to respond within 120 days), instances seeking to determine with certainty the overall tax treatment applicable to the business plan described. The conditions that can be0 used to interpellate are two: that the investment is equal to or greater than 30 million euros, and has a significant long-term impact on employment. The tax interrogation is part of a wider program to encourage tax cooperation. To date, 20 applications have been submitted (4 in 2016 and 16 in 2017) for total investments of more than 6 billion euros, with an employment impact of over 77,000 jobs.
Finally, the newsletter shows Baker Hughes-General Electrics’s successful experience. General Electrics, assisted by the Foreign Investment Committee and benefiting from a tax charge on an investment to be made following the merger with Baker Hughes, has decided to establish its headquarters in Turbomachinery & Process Solutions business.
