The dossier published in the Chamber "Analysis of financial effects"on the PDL"Discipline of horse breeding” presented by the deputy Maria Chiara Gadda (IV-C-D). The document, drawn up by the Budget Service and the Chamber Commissions Service, states the following:
ARTICLES 1 and 3
Regulation of horse breeding and financial provision
Current legislation. With reference to national legislation, please remember that articles 32 to 35 of the TUIR contain provisions regarding agricultural income, to which a specific preferential tax regime applies. In particular, article 32, paragraph 2, identifies the list of activities that fall within the definition of "agricultural income" for tax purposes. Article 56-bis of the TUIR contains provisions concerning the tax regime of "other agricultural activities". In particular, paragraph 3 establishes that on the activities aimed at the provision of services referred to in the third paragraph of article 2135 of the civil code (i.e. the "connected activities", see below), the income is determined by applying to the amount of the fees operations registered or subject to registration for the purposes of value added tax the profitability coefficient of 25 percent. In turn, the aforementioned third paragraph of article 2135 of the civil code defines "related activities" such as those, carried out by the same agricultural entrepreneur, aimed at the manipulation, conservation, transformation, marketing and valorisation which have as their object products obtained mainly from cultivation of the land or forest or animal breeding, as well as activities aimed at the supply of goods or services through the prevalent use of company equipment or resources normally used in the agricultural activity carried out, including activities for the valorisation of the territory and rural and forestry heritage, or reception and hospitality as defined by law. With reference to Euro-unitary legislation, it is also remembered that the Directive of 5 April 2022, n. 2022/542/EU, which concerns the rates of value added tax, included "live equines and supplies of services related to live equines" in the list of supplies of goods and supplies of services to which the rates may be applied reduced VAT rates: for the goods and services included in the list, Member States may - with certain limitations set by EU legislation - apply reduced VAT rates of no less than 5 percent. The aforementioned 2022 directive has not yet been transposed into national law.
The norms provide for interventions in the field of horse farming and contain the corresponding financial provisions. In particular, theArticle 1 identifies the object of the new discipline, which consists of horse farming activities, carried out individually or in association (paragraph 1). These activities are applicable to all equids, intended for the production of food for human consumption (DPA) and not intended for the production of food (NOT DPA) and in both cases the management of reproduction, gestation, birth and weaning of equidae, carried out in a business manner, are considered agricultural activities pursuant to article 2135, first paragraph of the civil code (paragraph 2). The current tax and social security provisions for the agricultural sector apply to horse farming activities (paragraph 3). Activities related to horse breeding activities, pursuant to article 2135, third paragraph, of the civil code are those carried out by the agricultural entrepreneur (paragraph 4).
These activities concern the management of fertilization stations and the production of semen, the training and care of horses, the valorisation and promotion of native and non-native breeds, also with participation in recreational events and equestrian tourism gatherings, the management of riding schools or the use of equines for social and hippotherapy purposes, the management and maintenance of equines of any age even if they are no longer employed in any kind of activity, the promotion of the study of horse breeding techniques in collaboration with educational institutions and farms in the area and university veterinary clinics and farriery activities.
If the horse farming activities are carried out for the benefit of third parties, the "other agricultural activities" regime referred to in Article 56-bis, paragraph 3, of the TUIR (paragraph 5) applies to the related income. For the transfer and sale of equines regulated by this law, as well as those used in professional sporting activity which have reached the end of their career, the VAT rate is set at 5,5 percent (paragraph 6). Please note that the currently applicable rate is, generally speaking, 22 percent. Workers hired on a permanent or fixed-term basis by companies carrying out horse farming activities are considered employed agricultural workers for the purposes of legislation on social security and assistance (paragraph 7). It is also forbidden to send equines used for social or therapeutic purposes to the food chain (paragraph 8). Finally, theArticle 3 provides for the charges deriving from article 1, equal to 5 million euros [per year, of course] starting from 2022, through a corresponding reduction of the Fund for non-deferrable needs.
Regarding the quantifying profiles, it is preliminarily noted that the regulations contain interventions in the field of horse farming. In particular, article 1 identifies the field of application of the law and, in addition to certain provisions of a regulatory nature, provides for some tax and social security benefits.
In particular, the article in question:
− includes a series of equine management activities, carried out in an entrepreneurial manner, among the agricultural activities pursuant to article 2135, first paragraph of the civil code (paragraph 2) and a series of further operations carried out by the entrepreneur among the related activities , pursuant to article 2135, third paragraph, of the civil code (comm 4);
− applies the current tax and social security provisions for the agricultural sector to horse-breeding activities (paragraph 3) and the "other agricultural activities" regime referred to in Article 56-bis to the income from horse-breeding activities carried out for third parties, paragraph 3 of the TUIR (paragraph 5);
− applies to the transfer and sale of equines regulated by this law, as well as those used in professional sporting activity which have reached the end of their career, the reduced VAT rate of 5,5 percent, instead of the 22 percent currently in force (paragraph 6);
− considers the workers of horse breeding companies as agricultural workers for the purposes of the legislation on social security and assistance (paragraph 7).
Furthermore, article 3 quantifies the charges deriving from article 1 in an amount equal to 5 million euros (per year, of course), configuring them as a spending ceiling ("equal to"). In this regard, the data and cognitive elements underlying the identification of the aforementioned charges should be acquired, for the purposes of its verification: in this framework, with particular regard to the application of VAT reduced to 5,5 percent, it is highlights that a recent EU directive allows Member States, if certain conditions are met, to apply a reduced VAT rate, not less than 5 percent, on the item "live equines and provision of services connected to live equines": the directive does not has yet been received. The Government's opinion should be obtained on the existence of the conditions for exercising the possibility of applying the reduced VAT.
Regarding financial coverage profiles, it should be noted that article 3 provides that the charges deriving from article 1, equal to 5 million euros starting from the year 2022, will be met through a corresponding reduction of the Fund to meet the non-deferrable needs in the course of management, referred to in article 1, paragraph 200, of law 23 December 2014, n. 190. In this regard, it is noted that, since the 2022 financial year has been concluded for some time, it appears necessary to update the starting date of the charges and the related financial coverage. Having said this, it should be noted that, according to the provisions of the budget law for 2024, the aforementioned Fund to meet non-deferrable needs has an allocation of 88.659.781 euros for the year 2024, 106.371.658 euros for the year 2025 and 268.515.522 euros for the year 2026 and that from a query of the database of the General Accounting Office of the State it appears that the same Fund has an availability of approximately 50,2 million euros for the current financial year. Without prejudice to what has been reported regarding the profiles of quantification of the charges deriving from the provision, the need arises to acquire from the Government, on the one hand, confirmation regarding the actual existence within the aforementioned Fund of the necessary financial availability and, on the other, a reassurance regarding the fact that the use of the relevant resources is not likely to jeopardize the implementation of interventions that may already have been planned based on the same appropriations.
Below is the full dossier:
