Italian Tax Amnesty Offers Reduction of Fines for Unpaid Taxes
Italy has introduced a new tax amnesty known as pace fiscale, allowing taxpayers to settle their pending tax charges while benefitting from significant reductions in fines and sanctions. The recently released Interpretation Paper by the Italian Revenue Agency (IRA), Note no. 2/E/2023, analyzes the special voluntary correction of unpaid tax charges, which is a key component of the tax amnesty regulated under Art. 1 § 174 to 178 of the Budget Law 2023.
The Voluntary Correction applies to violations related to validly submitted tax returns for fiscal years as of December 31, 2021, or earlier. This means that violations concerning returns submitted within 90 days after the submission deadline, which are not considered omitted, are eligible for this measure. However, tax returns that have not been filed at all cannot be amicably settled.
Under the Voluntary Correction, taxpayers can take advantage of a reduction of up to 1/18th of the minimum legal fines, as well as the option to pay in installments, with a maximum of eight equal quarterly payments.
It is important to note that the Voluntary Correction enables the amicable settlement of substantial violations related to tax returns and other violations that are preconditional to the submission of the tax returns. Additionally, each individual violation must be rectified and adjusted, along with the payment of the reduced fines, as cumulative sanctions and continuation mechanisms do not apply.
The following violations can be settled through the Voluntary Correction:
– Article 5, paragraph 6, of the Tax Procedure Code
– Article 11-bis, paragraphs 7 and 8, of Legislative Decree no. 471/1997
– Violations resulting from the failure to comply with certain reporting obligations related to money movements to or from abroad
– Violations of Article 31, paragraph 5, of Legislative Decree no. 231/2007
The IRA has clarified that no additional implementing decree will be issued for the Voluntary Correction, as the provisions in the Budget Law 2023 are considered sufficient. However, the IRA will release an additional note with reference codes to be included in the F24 Forms.
For matters not explicitly addressed in the Budget Law 2023 or the Interpretation Paper, the clarifications provided by the IRA in relation to the ordinary voluntary corrections will apply.
This tax amnesty aims to encourage taxpayers to regularize their tax situations by offering reduced fines and installment options. By taking advantage of the Voluntary Correction, individuals and businesses in Italy have an opportunity to settle their unpaid tax charges in a more flexible and cost-effective manner.
