The Tax Control Framework: regulatory and operational updates

 published on 13 February 2025 | reading time approx. 4 minutes

The Tax Control Framework (TCF), a central tool for the collaborative compliance regime, has recently undergone significant regulatory and operational updates, defined by the guidelines of the Revenue Agency. These provisions, contained in Order No. 5320/2025 and supplemented by Legislative Decrees No. 221/2023 and No. 108/2024, aim to make the adoption of the TCF more accessible and standardized, an essential element in establishing a relationship of trust between taxpayers and the tax authorities.

The collaborative compliance regime, introduced by Legislative Decree 128/2015, has as its main objective the prevention of tax risks through proactive and transparent management by taxpayers. The model is based on constant interlocution between the tax authorities and the companies in order to ensure a shared interpretation of tax rules prior to the submission of returns.

The scheme under discussion is reserved for taxpayers who achieve a turnover and revenue of not less than:

750 million euros, until the end of 2025;
500 million euros, beginning in 2026;
100 million euros, beginning in 2028.

In addition to the requirements related to turnover, the norms also cover additional categories of individuals who can access the scheme, namely:

taxpayers who execute a response from the Revenue Agency on a petition for a tax appeal on new investments;
entities participating in domestic tax consolidations, if at least one entity meets the size requirements and the group has a certified TCF system;
entities participating in VAT Groups, with an option exercised in accordance with current regulations;
entities resident and with PEs in Italy with revenues more than 1 billion euros, which join the Pilot Project.

In addition, entities belonging to groups with leading functions on the tax control system (through “drag-and-drop entry”), permanent establishments of nonresident companies that settle tax debts by adhesion, taxpayers who adopt a TCF system in accordance with Article 4 of Legislative Decree 128/2015, and independent professionals for the required certifications are also eligible for the scheme.

An innovative point introduced by Legislative Decree 108/2024 is the mandatory certification of the TCF, entrusted to independent professionals who already have specific professional skills and are registered as lawyers, public auditors or chartered accountant, in order to ensure that the system complies with accounting principles and OECD guidelines. In this regard, the requirements of qualified professionals, their duties and fulfillments have been regulated by MEF Decree No. 212 dated 12.11.2024.

In Italy, OECD references have been incorporated into the legislation on the collaborative compliance regime, articulating the TCF into four key areas:

Environment control: set of rules and principles together with formulated tax strategies that serve as the basis for the system;
System governance: clearly defined roles and responsibilities according to the “three lines of control” model;
Tax Assessment process: rules and procedures to identify, measure and control both operational and interpretive tax risks;
Continuous Monitoring: periodic checks on the adequacy and effectiveness of the TCF.

This framework supports a proactive and transparent approach to corporate tax risk management.

Adopting a certified TCF enables taxpayers to access the benefits under the collaborative compliance regime, including:

shortened preliminary questionnaire: response within 45 days and enhanced interlocution in case of unfavorable outcome;
simplified procedures for regularization: operable amends with prior cross-examination and reduced deadlines.
disapplication of penalties for timely reported tax risks, if precise conditions are met;
reduction of penalties: halving for insignificant risks included in the risk map;
waiver of guarantees on direct and indirect tax refunds while in the regime;
interlocutions on previous years within 120 days of admission to the regime;
non-punishability: for certain tax offenses, if specific conditions are met;
reduction of time limits for assessment activities.

To conclude, the Tax Control Framework is a cornerstone for transparent and proactive tax management, promoting continuous dialogue between taxpayers and tax authorities. Recent reforms, together with the mandatory certification of the TCF, strengthen the effectiveness of the system and offer significant benefits in terms of regulatory certainty and reduced tax risks.

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