Resolving a contract for non-performance in Italy
Non-fulfillment of obligations of a party leads to resolution of contract in Italy Termination of Contract for Non-Performance This is the case where the contract, at the request or initiative of the performing party, is resolved because of the non-performance of the obligations of the other party. It should be noted that, for a contract for which the main services are to be performed in Italy, the Italian contract law (lex loci) applies. The assumption is regulated in article 1453 of the Italian Civil Code. It responds to legal logic and reasons of common sense. Often, the resolution takes place amicably. In the event of a dispute, it’s better to rely on the services of an Italian lawyer, so as to properly apply Italian contract law. The assumption is regulated in article 1453 of the Italian Civil Code. It responds to legal logic and reasons of common sense. It is clear that if one party has fulfilled its obligations, it expects the other to do the same; faced with the persistent failure of one party, the other has two choices: 1. require performance of the obligations of the other party resulting from the contract; 2. terminate the contract. If the execution of the other party is still possible, the party who has already executed will still have an interest in its execution, but if the persistent incapacity causes him to lose confidence in the other party or In the case of an exception, the party having already executed may ask the judge to terminate the contract. However, this power of choice is not without limits. Article 1453 establishes a principle according to which: If you have requested the execution, you can still request the resolution, but if the resolution has been requested, then it is no longer possible to require the execution. Contrary to what happens in cases of nullity and cancellation of the contract, the resolution for non-performance is possible even if originally the contract had been concluded validly and was free from any defect. The types of contract resolution for non-performance indicated by the code are three: Termination for non-performance The first type of resolution is determined by the failure of one of the parties (which should not have little importance, as regards the diligent party’s interest, under art. 1455 CC). The non-defaulting party has the possibility to choose between the request for execution or the termination of the contract. In essence, the person who has fulfilled these obligations, in the event of default by the other party, may judicially bring two different types of actions: one aimed at obtaining satisfaction (see: action for performance of the contract) or another seeking to terminate his contract with a simultaneous claim for damages. There is also an alternative: a written notice can be given to the defaulting party, to comply within a reasonable time (which may not be less than fifteen days unless the parties otherwise agree or unless, taking into account the nature of the contract or according to usages, this appears a less appropriate term). This is a summation that, once this period has passed without success, the contract will be considered as definitively resolved. Unless the deadline expires, the contract is automatically terminated (without further activation by the diligent contracting party). With respect to effects, the termination of the contract for infringement shall have retroactive effect between the parties, with the exception of contracts for continuous or repeated performance, for which the effect of the resolution does not cover services already performed. Although it was expressly agreed, the resolution does not affect the rights acquired by third parties, subject to the effects of the transcription of the request for a resolution (see Article 1458 of the Civil Code). Let us summarize the characteristics of the failure that leads to the resolution. 1. must be attributable to a party; 2. must be relevant. On the second point, in fact, art. 1455 provides that: The contract cannot be resolved if the failure of one of the parties is of little importance in the interest of the other party. Termination of the contract for failure to perform A second type of resolution is that, once again in contracts with corresponding benefits, occurs when an execution has become impossible (for example, the object of a sale has been destroyed). Where the impossibility is only partial, the other party shall be entitled to a corresponding reduction in the benefit due by itself, and may also withdraw from the contract if it has no appreciable interest in the partial performance. Resolution for excessive toughness The last type of resolution, which is not applicable to random contracts, is governed by articles 1467 et following of the Civil Code. To this purpose, the legislature has provided that where the contract is in the course of continuous or periodic or deferred performance, if the performance of one of the parties has become excessively onerous for the occurrence of extraordinary and unforeseeable events, that party may request the termination of the contract, with the effects according to article 1458. “The Code, however, offers the party against whom the resolution is required a chance to avoid the resolution: it may offer to change the terms of the contract. So far, we have spoken of the judicial resolution, but the contract can be terminated very much without judicial intervention. We have three hypotheses: Notice to comply (Article 1454 CC), the non-defaulting party may give notice to the other party requesting the fulfillment of its obligations within a reasonable period of at least 15 days. After the expiry of this period, the contract will be terminated automatically without any judicial decisions. Express termination clause (Article 1456 CC) the parties may agree that a default of one or more specific obligations will lead to the termination of the contract. The resolution occurs when the creditor declares to the other party his intention to invoke the clause Essential term (Article 1457 (c)) if the obligation is not fulfilled in the period considered essential
Corporate confidence in Italy at its highest level since 2007
The economic climate is conducive to business in Italy Fourth consecutive increase in the corporate confidence index in Italy, which rose in April by more than two points (107.4) and reached the highest level since October 2007. There has been a sound growth, pushing manufacturing and construction (to obtain higher values in both cases we must return to 2008), as well as for services and retail sales. The improvement of the industry is linked in particular to the intermediate goods, while are slightly decreasing the consumer and instrumental goods. However, the latter were the protagonists of a leap of nearly three points in the previous month. In general, evaluations on order books and production expectations have improved. There has been significant growth in the construction sector, which has been the worst hit by the crisis, where confidence has improved by nearly five percentage points to the peak of May 2008, a development that affects orders as well as expectations of employment. Italy is the second country in Europe for business confidence This is the landscape that emerges from the 17th edition (of February 2017) of the Edelman Trust Barometer, an annual survey conducted in 28 countries on a sample of 33 thousand people by the public relations agency Edelman. In the first place for trust in companies there is the Netherlands. Italy has confidence in companies as factors of social progress 78% of Italians believe in the social role of the corporate sector In addition, Italy (55%) is the second country in Europe with more confidence in the corporate sector after the Netherlands (60%). 78% of Italians believe that companies can take specific measures not only to increase profits, but also to benefit the economic and social growth of the communities where they operate, and the company is the category with more confidence among the Italians. Add to this that Italy is the first in Europe for the creation of enterprises among young people. More than twice Germany: companies with CEOs under 40 years of age are 1.15 million in all, with a positive balance of 50,000 new cases in the first nine months of this year, at the rate of 325 openings per day. Young Italians are the most ingenious in terms of launching new businesses, especially in the South and in the retail sector. And with great interest back in agriculture.
Italy’s fiscal offer to woo rich foreigners: a €100 k flat rate
A new flat-rate tax: EUR 100 000 and you have finished with the Italian IRS (fisc) The Italian government has created a flat tax to invite the wealthy foreigners to set up residence in Italy. It may be extended to members of the family, to which it applies a replacement fee of € 25,000 MILAN – Pay the flat rate tax of EUR 100,000 per year to obtain a kind of balance on all accounts with the Italian tax authorities: this is the offer for foreigners who wish to transfer their tax residence in Italy, a “tax base” – a replacement tax – on income earned abroad. The measure had been introduced since the last law of stability and is used just to attract “wealthy individuals”. A choice that many have also interpreted as a lever to try to divert towards the peninsula, and especially towards Milan, professionals with big salaries who will be forced to leave London after the divorce with Brussels, or Brexit. The advantage of the single tax – to be paid in one solution – you can even extend it to family members, a flat rate of € 25,000 will be applied. The option for the 2017 fiscal period must be exercised before September 30, 2018. Once the green light (even via silence / consent) is received, the neo-resident alien will see his flat rate tax recognized for the next fifteen years. The main requirement for access is to not have been resident in Italy for at least nine of the last ten years: a way to avoid the back and forth to take advantage of this flat rate tax. Brexit, Italy tries to alienate the foreign managers: “Come to Milan, to pay little taxes” How to exercise the option. Taxpayers can join the new scheme when filing an income tax return related to the tax period in which they were transferred to the tax residence in Italy or in the immediate wake. Prior to this, they must apply to the central income assessment. The application may be delivered by hand, by registered mail with acknowledgment of receipt or by electronic notification, using certified mail. The foreign person must indicate: Personal data and, if already granted, the tax code, in addition to his domicile in Italy, if he is already resident; Non-resident status in Italy for a period of at least nine tax years in the 10 years preceding the beginning of the option; The jurisdiction or jurisdictions in which the person had the last fiscal domicile before exercising the option; States or territories for which it intends to exercise the option of not using the substitute tax. A “checklist” is also required, which among other things is used to examine the state of no tax residence in at least nine out of ten tax years before entering the flat tax. Members of the family may benefit Again the tax agency states that the flat-rate scheme can be extended to one or more family members in possession of the requirements by a specific indication related to the tax period in which the family has moved tax residence in Italy or Income tax return. In this case, the replacement tax is equal to € 25,000 for each of the family to which the effects of the same option are extended. When apply The option must be exercised within the deadline for the filing of income tax returns, even if the questionnaire has not yet been answered by the tax authorities. The application can be filed even if the terms to declare residence in Italy have not yet run. The option is tacitly renewed from year to year, whereas the effects cease, in all cases, after fifteen years. A lump sum for paying taxes Payment of the replacement tax, in the amount of 100,000 euros, must be made in a lump sum, for each tax period, on the due date for payment of the balance of income tax.
The Italian industrial production keeps moving up
Strong increase in the turnover of Italian industry in December 2016 y/o/y After the positive data on industrial production aired last week again positive signals from the Italian industry. On average, in 2016, turnover recorded a slight increase in value (+ 0.2%), which was more pronounced in terms of volume in the manufacturing sector alone (+ 1.2%). In December 2016, adjusted for calendar effects (the number of days worked was 20 days compared to December 21, 2015), total income increased over one year by 9.4%, with an increase of 8.2 % In the domestic market and 11.8% in the foreign market. Industry, jump in sales in December: + 2.6% compared to November Positive signals from Istat data. Well, even orders are up 2.8% from the previous month. This is the third consecutive increase. The increase in sales was much higher in foreign markets (+ 5.4%) than in the domestic market (+ 1.1%). Orders recorded, however, show an increase in the domestic market (+ 6.8%) and a decrease in the foreign market (-2.6%). Political instability is a problem, but they will solve it In Italy, the difficulty of governing the country is almost a habit that leads to many changes and resignations in governments. Nevertheless, I believe that there are enough moderate political forces in favor of effective reforms so that the recovery can be consolidated and Italy can attract foreign investment.
Exemplary case of a small Italian family business: Massimo Bottura
“Massimo Bottura, the owner of the restaurant Osteria Francescana, is an exemplary case of running a small Italian family business. His career is at the crossroads between entrepreneurship, culture and technology and is an example for the spread of Italian culture and the development of Made in Italy at the international level. The leader of Modena – three Michelin stars and world number one in the best 50 ranking – now receives an honorary degree in business administration in the Aula Magna of St. Lucia in Bologna, with a focus on the ethics of business, and of entrepreneurship. Bottura is the chef who invented the Ambrosiano Refectory in the months of the Milan Expo (an adventure that has also become a film), the experience borrowed by other cities, with the participation of the best chefs on the planet. “Before the summer, we will open a refectory in London, in the heart of Chelsea. Alain Ducasse and Adrià have already joined. And then we go to Berlin. How much does it cost to eat in your “social” canteens? “In London, you will spend 50 cents for a soup, 30 for vegetables: this is obviously symbolic, we should not give them a gift. In Brazil, you pay nothing, the money is collected by renting spaces, welcoming and bright. Hosting people in need should not be associated with second-class places, in fact. It does not want to be charity, it is the restoration of dignity. ” A major difference. “Fundamentally, I would say. It is like the call, to take the best products made in prison workshops. Charity is a task to be done in silence. You put your hand in your pocket and give. Here the concept is different: it comes down to cultural projects, which must be communicated. We must relate those who work with and for prisoners, support those who seek to get back into the game through work. Improve talent, ability, passion. Our cooks are loyal to our craftsmen, but no one prevents us from supporting a “social” supplier if it is able to withstand the competition of the market in terms of quality “. Today cooks are worth more than the sum of their recipes. We can make a difference because we are listened to. If international politics turn to the worst, there are many people who are fighting in silence. We must exploit this fruitful period, I think people realized that we can not lock ourselves in our little corner and that the slogan must be “sharing” Assigning an honorary degree to a cook is not so common “They also came from Harvard to understand how we operate in the shop. I want to call it “the shop”, because there is a place for education, culture, agriculture, tourism, social support. The new food tourism alters the local economy, I’ve never seen so many foreigners in Modena … We have two thousand applications for internships. They come here, and also absorb the culture of sustainability, the prohibition of waste, respect for the work of farmers.” – said Mr. Bottura.
Italy first in Europe for companies led by CEOs under 35
Young Italians dub German peers in terms of new business initiatives. There are in Italy 600,000 companies with a CEO under 35. With a pace of new openings of 325 a day, in the first nine months of 2016. Boom in the South, in the retail trade and agriculture There is a sector in which Italy is first in Europe. More than twice as France and Germany: business conducted by a CEO under 35. They are 600 000 in all, with a positive balance of 50,000. Record set in the first nine months of this year, at the rate of 325 openings per day. Young Italians in short, are the most resourceful when it comes to embarking on new business. Especially in the South and in the retail trade. And with a great return of interest for agriculture. For those who want to do business in Italy, you have to know how to interact with small companies, which will necessarily be suppliers or customers. First, if a small company or made a quote, have to ask them all to follow up the quotes provide for billing, because the smaller the Italian company, and the more one tends not to charge a portion of its turnover Then, be aware that small Italian companies are quite dynamic and can become loyal partners, both as a supplier and as a customer. So it is essential to establish good relationships with my family that normally runs the business, based on mutual trust. The advice of an Italian business lawyer is all the more valuable as the laws that regulate business activity in Italy are sometimes a bit tortuous, and commercial practices can be sometimes surprising for newcomers. 2015 EUROSTAT DATA FOR SMEs (in thousands) Member State of the EU total of SMEs CEOs under 40 % of CEOs under 40 Italy 3.838,70 1.155,10 30,09% UK 2.962,10 990,1 33,43% Poland 2.772,60 988,2 35,64% Germany 2.414,90 511,4 21,18% Romania 2.370,60 902,2 38,06% Spain 2.243,50 691,1 30,80% France 2.041,90 568,9 27,86% Greece 990,7 287,1 28,98% Netherlands 786,7 234,8 29,85% Czech Republic 655,8 201,2 30,68% Portugal 592,2 93,9 15,86% Austria 395,5 95,5 24,15% Belgium 377,4 122,5 32,46% Hungary 333,4 91,4 27,41% Sweden 326,9 78,2 23,92% Slovakia 279,3 119,3 42,71% Finland 274,7 74,6 27,16% Bulgaria 248,7 76,2 30,64% Ireland 227,2 52,6 23,15% Croatia 184,2 47 25,52% Young Italians who create companies, reveal that young companies are 9.8% of Italian SMEs and almost one third of new openings in 2016. This result apparently contrasts with 67% of those under 34 still at home with mom and dad, the highest percentage in Europe after Slovakia. family as a gym. “the family in Italy is a landmark because it has the resources to better withstand the crisis, but it is also a widespread entrepreneurship garrison,” reasons the president of Coldiretti (Italian farmers’ union) Roberto Moncalvo. “in many cases it is a gym and a springboard to enable young people to express their creativity.” And indeed family businesses in Italy skim 60% in the stock market and 90% in sectors such as agriculture. Commerce and agriculture favorite But what are the the areas of interest under 35? On 90,000 new businesses opened between January and September this year (while 40,000 closed), 11 000 are in the field retail trade, 7,569 in agriculture and livestock, over 7000 specialized in construction, 4,717 in catering and 2,882 in personal services. From the territorial point of view, the South won (34,334), followed by North West (21,611), Center (18,064) and North East (almost 14,000). Small is beautiful Italy is at the top in Europe for the high number of small and very small companies (and pulverization is not always an advantage): 3.8 million against 2.9 million in the UK, 2.7 million in Poland, 2.4 million in Germany, 2.2 million in Spain and just over 2 million in France. But of the nearly 4 million of Italian SMEs, 30% is driven by under 40, compared to 33% of London, 35% of Warsaw, only 21% of Berlin, 28% of Paris and as Madrid. First-generation farmers Many new entries are recorded in the agricultural sector. According to an analysis Coldiretti / IXE, half of the first-generation farmers (who come from other sectors or from different family experiences) has graduated, 57% did innovation, 74% are proud of the work done and the 78% are happier than before. Among other things, the farms of young people possess an upper surface of more than 54% of the average, a higher turnover of 75% and 50% employed for business more. Tax-breaks for hiring The 2016 budget bill also provides for the exemption of social security contributions of 100% for recruitment of young farmers under 40 for the first three years. And then 66% and 50% for the fourth and fifth year.
Italian labour market improves thanks to Jobs Act
The reform introduced by Renzi’s government has improved employment and economy, albeit slightly Interim results on the field of the reform introduced by the Renzi government – it will take time, allowing the polls, to fully assess the structural effects – tell a two-faced reality: in early 2015, when started the reduction in contributions for new hires, the rate of occupancy was 55.9 percent and that of unemployed to 12.3 percent. Today – as they said the day before yesterday to Istat – Italians who work have risen to 57.3% and those without a job fell to 11.9 percent. Around the beautiful country 417,000 employees have been added. Something moved in the right direction, one might say at first glance, thanks to the timid economic recovery. But the result of the Jobs Act is actually a cocktail of lights and shadows: in November 2016 – and it is good news – there was 409,000 permanent contracts more than in early 2015. Too bad that young people have not benefited. The generational divide The generational divide indeed, complicit rigidities of Fornero law that extended the retirement age, has expanded: in 23 months, the number of over fifty to work in Italy has increased by 690,000 units. The new posts for youngsters between 14 and 25 were however only 36,000. More than 500,000 of our fellow citizens, and even here there is to celebrate, are back on track to seek employment. And, discordant note, layoffs jumped by 32%, facilitated – critics say – the weakening of Article 18, which makes layoffs much more difficult. Here in detail how and what has changed in the labor market in Italy in the era of the Jobs Act: REBATES HAVE WORKED WELL Hiring savings of more than 8,000 euro of contributions made to run businesses have increased the the number of permanent workers in 2015, closed with activations up 56% in 2014. In December of that year, before the relief rebates where reduced to 40%, it has seen a historic passing of stable activation of certain ones. The last photo of Istat (the sadistic office of the government) portrays 14.9 million permanent employees (last November), up sharply from 14.5 million in March 2015, when the Jobs Act became effective. But behind these positive numbers lie two weaknesses. Out of a hundred permanent contracts in 2015, only 9.5% can be classified in full as new jobs. They are workers who were never registered in the INPS (the Italian Social Security) archives as autonomous or professionals, nor have ever been the subject of mandatory reports (started, stopped, extended, transformed) since 2009. The de-casualization is admittedly welcome, but then likely to fade with the loss of tax relief and a lack of sustained economic growth in recent months, the temporary hires have returned to grow at much greater rate, while with the weakening of the economic advantage of hiring the boom of stable contracts was off. OK FOR ALL THE OVER 50 The over fifty workers are the ones that come out better from the first two years of the Jobs Act. The statistic – obviously – is a bit distorted by the effect of the Law Fornero, which raised the retirement age. The numbers are nevertheless very significant: from January 2015 to November 2016 employed workers over 50 increased by 690,000 units. Like saying that every day nearly 1,000 places were added. The reform of the Renzi government labor market, in this case, has had a marginal impact, given that the trend is a photocopy of that of 2013-2014, when in two years, workers with more than 50 years had grown to 721mila units. The unemployment rate for this age group puts Italy almost at the German level of excellence. In November last year we were at 5.6%, the lowest since 2012, half a point less than in January 2015. RECRUITMENT STAGNATES FOR YOUNGSTERS The effect of the Jobs Act is almost nil for young people between 15 and 24 years. From January 2015 to November 2016 the employed in this age group grew by only 36,000 units. And in 2016, with the reduction of rebates, new posts were only 5,000. It must be said, nevertheless, that since 2004 the annual balance for those under 24 was always negative and the unemployment rate fell in two years from 40.9% to 39.4%. Even the Observatory of Labour Consultants certifies that young people (as well as women and graduates) are those that have benefited most from the increase in stable employment. In recent months, however, the youth labor market has gone back into reverse. In April, the number of employed persons in this age group had risen for the first time in 2013 to more than a million people. Since then, however, 38,000 jobs were burnt. Things are not good even for 25-34 year olds: in 2015 unemployment for them has fallen from 18.4% to 17.2%. In November, the index had already risen to 18.9%, and since the Jobs Act have been burnt over 130,000 jobs. THE OPINION OF ENTERPRISES The new protections against dismissal (based in fact on compensation) are, according to the investment bank Barclays Bank, appreciable because companies know exactly how much can cost them to part with a worker, without waiting for the discretion of a court. HSBC Bank International recalls that the OECD credits the Jobs Act of a beneficial effect on GDP of 0.6 percentage points in five years. But it also recognizes how the companies themselves attribute two-thirds of new hires to contribution savings. A spent drug, except for a few limited cases.