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WORKING IN ITALY

Longer hours but more flexibility: How ‘smart working’ has changed Italy’s work culture

Remote working was widely embraced in Italy for the first time amid the pandemic. But along with the positives have come longer working hours and an inability to switch off from the job, a new study shows.

Working from home, often known as lavoro agile or ‘smart working‘ in Italian, was rare in Italy before the pandemic forced many companies to move their operations online.

With just a few thousand people working from home at the end of 2019, smart working has since “exploded” in Italy – raising new questions about how the nation’s working culture will look in future, according to a study carried out by the Italian Metalworkers’ Federation and the Catholic University of Milan.

READ ALSO: Will Italy really pay you to move to its ‘smart working’ villages?

“Agile work is challenging but allows a flexibility appreciated by workers – now we need more negotiation to get out of the emergency,” said the Federation’s secretary general, Roberto Benaglia.

The survey revealed that over half of respondents (59 percent) complained that their hours now extended beyond what was agreed in their contract, while almost two thirds (61 percent) said they couldn’t disconnect from work at the end of the day.

One in ten said they were suffering from loneliness and a quarter of respondents revealed the relationship with their colleagues is what they “miss a lot”.

Photo: Euan Cameron/Unsplash

Not having a clear divide between work and a personal life hasn’t all been negative, however.

On a scale of one to 10, people scored the flexibility of home working as an 8, with over a quarter (28 percent) saying they don’t want to return to the office at all.

Almost one in six (14 percent) rated smart working positively, because of the opportunity to spend more time with their children, while one in five (21 percent) claim to have had improved concentration.

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Some 80 percent of the almost 5,000 respondents said they had never worked from home before the pandemic, but thought the shift in the way Italy is doing business had created new ideas for how to work in the future.

Over half (58 percent) said they would like to work in a hybrid model, spending some days in the office and some days remote working.

How this would work in practice is up for debate: “The experience of the pandemic must now give way to a sustainable and lasting model of agile working, which focuses on skills and generates both capacity for companies, and wellbeing and satisfaction for employees,” stated the Federation.

“These months have been a big test, there is no going back – the challenge is to promote and improve agile working by increasing the degree of control by workers, while maintaining good living conditions,” it added.

READ ALSO: ‘You might not want to stay here, it’s crazy’: What to expect when you work for an Italian company

The findings are based on employees mostly in the aerospace, ICT, software production and automotive sectors in companies based in large cities including Rome, Milan, Turin, Bologna, Genoa and Trieste.

Other emerging figures have also nodded towards a new way of working in Italy in the future.

In a study by Illimity Bank, flexibility came up again as a positive outcome of the ‘smart working’ trend, but the study also found that it had its impacts on mental health.

“After our experiences, we can now say that even psychologically, 100 percent remote working is not a sustainable method for too long,” said the bank’s HR manager Marco Russomando.

“Apart from the difficulty of separating private life and work, working all the time through a screen is not in our nature, which is also expressed through sharing, co-creation and training side by side,” he added.

Russomando said “the right balance” was needed, although how this will be implemented across all companies is unclear.

However, regardless of how employees and companies decide to operate in future, he pointed to results – rather than simply being present – as the real measure of success.

“At last we can experience a new way of working in which people are evaluated on the basis of objectives and not on the basis of the hours they spend in the office, as should be the case in the advanced service sector of a truly modern country,” he added.

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BUREAUCRACY

EXPLAINED: What is Italy’s new digital invoicing rule for freelancers?

Italy is bringing in new rules from July that mean changes for freelancers on the 'flat tax' rate. Here’s what you need to know about the new ‘fatturazione elettronica’, or digital invoicing system.

EXPLAINED: What is Italy’s new digital invoicing rule for freelancers?

Italy has been slowly moving more of its bureaucratic systems online in recent years, and in many cases this has made it quicker and easier for residents to access services and get their considerable amounts of Italian life admin in order.

It was hoped that the new electronic invoicing rule would do the same for freelancers on Italy’s flat-tax regime, by doing away with the existing need to print out invoices and affix tax stamps by hand.

READ ALSO: Beat the queues: 19 bits of Italian bureaucracy you can do online

But a close look at the details of the new rules shows that it probably won’t make life easier for those on the flat tax rate, who have so far been spared the bulk of that infamous Italian red tape – but now need to get to grips with a new online system.

Known as the ‘regime forfettario‘, Italy’s flat-rate tax scheme for individuals and small businesses was introduced in 2015 to encourage more commercial activity by slashing tax rates and simplifying bureaucracy.

New freelancers who choose this tax system generally pay somewhere between just five and 15 percent tax on earnings, regardless of overheads.

READ ALSO: The pros and cons of Italy’s five percent flat tax for freelancers

Little has changed since its inception seven years ago, but freelancers using the scheme now need to be aware of new rules coming into force from July 1st, 2022.

How you invoice – how you send, receive and store receipts, therefore – is due to move from analogue to digital, bringing new requirements and know-how on digital invoicing software.

Here’s what’s changing for freelancers with the so-called ‘fattura elettronica‘.

Who is required to send electronic invoices?

While this was already a requirement for the self-employed on other tax regimes, those on the flat tax rate will now be included from July 1st.

They were previously exempt, but that changed under the PNRR (National recovery and resilience plan or piano nazionale di ripresa e resilienza) – the Italian government’s plan for using EU funding for post-pandemic economic recovery.

Digital invoicing is intended to fight Italy’s major problem with tax evasion, as well as to further automate accounting processes.

For now, not all freelancers under this tax scheme need to move to digital accounting – only those who received an income in excess of €25,000 in the previous year are required to comply with the new rule.

It will then extend to all freelancers using the flat-rate scheme from January 1st, 2024.

From that date, everyone subscribed to the ‘regime forfettario’ will have to switch to electronic invoicing and there are hefty penalties in place for those who don’t.

How will electronic invoices work?

Italy’s tax authority has defined a couple of notable differences between the digital or electronic invoice (fattura elettronica) and a paper invoice (fattura di carta) in its updated guidelines.

Firstly, the digital invoice has to be created using a digital device (a computer, tablet or smartphone), and secondly it has to be sent to the client via an ‘Interchange System’, the so-called Sistema di Interscambio (SdI).

READ ALSO: ‘Smart working’? Here’s what you need to know about going self-employed in Italy

Italy’s flat-rate tax scheme is going digital. Photo by Christian Dubovan on Unsplash

This electronic postal system checks whether the invoice contains the required data for tax purposes, as well as checking the verified e-address (or the so-called PEC address) of the recipient.

In doing so, the electronic invoice automatically checks that the VAT number (partita IVA), or the tax code (codice fiscale) depending on who you send the invoice to, really exist.

Once the checks are completed, the system sends the invoice to the client, which will trigger an alert to the freelancer with a delivery receipt, showing the date and time the document was delivered.

How can you send an e-invoice?

There are a few accounting software options on the market if you’re now faced with having to send electronic invoices.

Some charge a fee of around €1-€4 per month or come at a cost per transaction.

Platforms such as ‘Aruba‘ or ‘Fatture in Cloud‘, are competitive and may offer you a free trial before you deciding to buy.

The Italian revenue agency (Agenzie delle Entrate) has also created free-of-charge services to help send and receive e-invoices. These include websites as well as apps for completing the required steps, which are detailed in their guide here.

You can access their Invoices and Receipts (‘Fatture e Corrispettivi‘) portal to benefit from these free services.

You’ll either need a Spid ID (‘Sistema Pubblico dell’Identità Digitale‘), a Carta Nazionale dei Servizi (CNS) or accounting credentials known as Fisconline/Entrate, which are issued by the Agenzie delle Entrate.

You can also delegate this task to an intermediary, such as an accountant (commercialista) who would do this on your behalf, the revenue agency stipulates 

What about the Italian tax stamp?

Until now, freelancers issuing invoices under the ‘regime forfettario‘ have had to attach a €2 stamp, called a ‘marca da bollo’, to every invoice over the value of €77,47.

So what happens when e-receipts go digital and you can’t physically stick a stamp on a document? Well, that goes digital too and the Inland Revenue has issued a 16-page guide on how you need to go about it.

It seems the previously attractive ‘light’ accounting of this regime is about to get bogged down by time-consuming bureaucracy too.

Authorities will systematically check that the fee has been paid each quarter for all the invoices that require it.

As a general rule, you can see if there are any discrepancies by the 15th day of the first month following each quarter on their Invoices and Receipts portal.

You or your intermediary have until the end of that month to fix any accounting errors, but make sure to check with an accountant if you have any difficulties or need specific advice for your personal circumstances.

Once you receive your final stamp duty bill for each quarter, you can pay either via IBAN, which you set up on the portal, or by filling out an electronic F24 form – details of how to do that are included in the guide.

For further information and FAQ’s, see Italy’s Inland Revenue Agency website on the electronic invoice here.

Please note The Local cannot advise on personal cases and seeking expert financial advice is recommended.

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