Biennial composition with creditors: what’s new, how it works and payment methods

The Omnibus Decree, converted into law no. 143 of 7 October 2024, introduced significant changes in tax matters, including the new provisions on agreed biennial budget. These measures aim to offer taxpayers an opportunity to regularize their tax position relating to past years, introducing a specific repentance regime and the possibility of paying reduced taxes.

But what exactly does the new legislation provide and what are the advantages for those who decide to join the agreement?

Let’s explore the details of the changes and the expected benefits for taxpayers.

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Reduction of sanctions and new membership terms

The biennial composition with creditors, introduced with the Omnibus Decree, offers an important opportunity to regularize tax positions relating to past tax periods, reducing the penalty burden on taxpayers who choose to join. The main innovations concern the decrease in thresholds for the application of additional sanctions and the introduction of a specific repentance regime for those who have used the Synthetic Indices of Fiscal Reliability (ISA).

1. Reduction of sanctions: for taxpayers who are in violation of the tax periods covered by the proposed arrangement with creditors and who decide to join, the law provides for a halving of additional sanctions. This reduction also applies to taxpayers who have not joined the repentance regime in the period 2018-2022 or who lapse during its implementation.
2. Membership by 31 October 2024: interested taxpayers must express their willingness to join the biennial composition with creditors no later than 31 October 2024. This deadline was established to allow all parties involved to evaluate the opportunity to regularize their tax position.
3. Specific repentance regime: the repentance regime is particularly advantageous for those who have applied ISAs and provides the possibility of paying a substitute tax, in place of income taxes and related surcharges, as well as IRAP, for one or more years between 2018 and 2022. The calculation of the tax base takes place according to the scores obtained with the ISAs and provides a 30% reduction for the years 2020 and 2021, recognizing the effects of the Covid-19 pandemic.

These benefits represent a concrete opportunity for taxpayers who want to remedy their tax position with a reduced penalty burden and facilitated payment methods.

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Deposit methods and payment options

Taxpayers who join the biennial preventive agreement can choose between different payment methods, designed to facilitate the payment of taxes due.

You can make payment:

1. In a single solution: the payment must be made by March 31, 2025thus guaranteeing a rapid and definitive closure of your tax position. This option is ideal for those who have immediate availability of the necessary resources and wish to avoid paying additional interest.
2. In monthly installments: alternatively, taxpayers can opt for an installment plan that provides up to 24 monthly installments of the same amount, deferring the payment of the substitute tax. This allows you to spread the tax burden over a two-year period, making the payment more sustainable.
3. Minimum amount: it is important to underline that, regardless of the method chosen, the tax due cannot in any case be less than 1,000 euros. This means that even taxpayers with a small tax base will have to meet this minimum threshold to be able to join the scheme.

In case of failure to meet the deadlines or forfeiture of the installment plan, the taxpayer will lose the benefits of the agreement and the sums must be paid in an ordinary amount, without the benefits provided for by the decree.

Furthermore, in the presence of subsequent violations or impeding causes, such as the notification of criminal proceedings for tax crimes, the Revenue Agency will be able to recalculate the amounts and apply the sanctions provided for by current legislation.

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Cases of forfeiture of benefit and extensions of assessment deadlines

The legislation provides for some specific situations in which the taxpayer can lose the benefits of the two-year composition with creditors, with significant consequences on their tax position. Here are the main cases of forfeiture:

1. Failure to meet payment deadlines: if the taxpayer does not comply with even just one of the envisaged installments, or does not pay the entire amount within the established deadlines, he will automatically lose the benefit of the agreement. This entails the immediate application of ordinary sanctions and the obligation to pay the remaining amount without reductions.
2. Criminal impediment cases: the intervention of a precautionary measure, the notification of an indictment or the application of a restrictive measure linked to tax or financial crimes entails the automatic loss of the benefits granted by the composition with creditors. In this case, the Revenue Agency will be able to carry out further checks on the tax periods involved and apply the sanctions provided for by the legislation.
3. Forfeiture due to non-compliance: if the taxpayer does not comply with the obligations set out in the agreement, for example by failing to pay current taxes or in the event of new irregularities, the Revenue Agency can declare the forfeiture of the benefit, with the consequent recalculation of the taxes and penalties.

However, the law also provides for a number of extensions of the assessment deadlines to ensure correct management of tax positions:

• Extension to 31 December 2027: for taxpayers who apply the ISA and join the agreement, the deadlines for the assessment of the 2018, 2019, 2020 and 2021 years are extended to 31 December 2027, in relation to the years subject to the amendment.
• Extension to 31 December 2025: for ISA taxpayers who adhere to the two-year composition with creditors and who have assessment deadlines expiring on 31 December 2024, the extension is extended until 31 December 2025, thus offering a further year for verifying the tax position.

These extensions represent an advantage for taxpayers who intend to join the agreement, but at the same time require careful management of their tax position, to avoid incurring the forfeiture of benefits.