Italian Tax Penalties Reform: what changes and how

published on 15 October 2024 | reading time approx. 6 minutes

For breaches committed after 1 September 2024, the changes to the penalty system introduced by Legislative Decree No. 87 of 14 June 2024 apply.

In order to make the entire penalty system fairer and inspired by the principle of proportionality, the ‘Sanctions Decree’ (Legislative Decree 87/2024) reformed the tax penalties, making them overall less onerous; at the same time, the transitional provisions introduced an explicit derogation to the principle of favor rei, providing for a disapplication of the retroactivity of the rule for violations committed before 1st September 2024.

On the subject of tax payments, the new measures provide that the penalty for omitted, insufficient or late payments is 25 per cent reduced to 12.5 per cent for late payments regularised within 90 days of the due date.

The new penalty rate concerns, for example, payments to be regularised with reference to withholding taxes and monthly VAT for the month of August.

With regard to omitted or incorrect invoicing committed from September onwards, the penalty to be applied is 70 per cent of the tax due with a minimum of Euro 300 per transaction.

With reference to the voluntary correction of declaratory violations, on the basis of the return forms submitted in the year 2025:

in the case of false declaration, the basic penalty shall be 70 per cent of the taxes due with a minimum of Euro 150;
for the omitted declaration, the penalty is 120 per cent of the taxes due, the maximum period of 90 days' delay in submitting the declaration remaining fixed in order to be able to apply the voluntary reprimand
irrespective of the application of the voluntary tax amends:
if the omitted declaration is submitted before any audit and within the assessment period, the applicable penalty is 75 per cent of the tax due;
if the unfaithful declaration is supplemented prior to any inspection and within the assessment period, the penalty applicable is 50 per cent of the tax due with a minimum of Euro 150.

As mentioned above, the Sanctions Decree also amended the general part of the administrative sanctions system by providing that:

juridical accumulative sanctions operates for all cases where violations of the same provision are committed by different actions, irrespective of whether they are formal violations or not;
if breaches of the same nature are committed over several years (e.g. repeated omitted RW framework), the cumulation operates by applying both the increase from half to three times the penalties and the increase from ¼ to double;
a concrete approach is needed to establish the merely formal or non-formal character of a violation in order to establish its sanctionability;
the sums subject to definition to the third of only the penalties may be spread in 8 quarterly instalments raised to 16 for amounts exceeding a total of Euro 50,000.00.

Important innovations also concern the institute of the voluntary correction of tax return. As a matter of fact, always from 1st September 2024, without any control, the penalty for the repentance of a violation beyond the year or beyond the deadline for submitting the declaration of the year in which the error was committed will always be reduced to 1/7 of the minimum. In addition, the possibility of applying the cumulation of penalties, also in the case of repentance, is allowed, but limited to the individual tax and the individual tax period.

Finally, we provide below a summary table of the changes to the penalty system, distinguishing between breaches committed before 1st September 2024 and after:

Committed breached	Sanction until 31st August 2024	Sanction from 1st September 2024
False declaration (income tax, VAT, IRAP, 770)	From 90 per cent to 180 per cent	70 per cent, minimum Euro 150 (Euro 250 for 770)
False declaration with supplementary before the audit (income tax, VAT, IRAP, 770)	Not planned	50 per cent, minimum Euro 150 (Euro 250 for 770)
Omitted declaration (income tax, VAT, IRAP, 770)	From 120 per cent to 240 per cent, minimum Euro 250 euro	120 per cent, minimum Euro 250
Omitted declaration submitted before the audit (income tax, VAT, IRAP, 770)	From 60 per cent to 120 per cent, minimum Euro 200 (if submitted within the year and without controls)	75 per cent, minimum Euro 250
Incorrect declaration	From 250 Euro to 2,000 Euro	Unchanged
Omitted/incorrect RW framework	From 3 per cent to 15 per cent of the value (doubled if tax havens)	Unchanged
Failure to transmit declarations (qualified intermediaries)	From 516 Euro to 5,146 Euro	Unchanged
Omitted/incorrect invoicing	From 90 per cent to 180 per cent with a minimum of Euro 500 per transaction	70 per cent with a minimum of Euro 300 per transaction
Omitted/incorrect invoicing (without effect on tax)	From 250 Euro to 2,000 Euro	Unchanged
Omitted/incorrect telematic transmission of receipts	90 per cent with a minimum of Euro 500 per transaction	70 per cent with a minimum of Euro 300 per transaction
Omitted/incorrect telematic transmission of receipts (without effect on tax)	100 Euro per transmission	100 Euro per transmission, maximum 1,000 Euro per quarter
Omitted/incorrect invoicing (exempt, non-taxable, excluded transactions)	From 5 per cent to 10 per cent of the undocumented consideration with a minimum of Euro 500; from Euro 250 to Euro 2,000 if the violation does not count towards income	5 per cent of the undocumented consideration with a minimum of Euro 300; from Euro 250 to Euro 2,000 if the violation does not count towards income
Undue VAT deduction	90 per cent	70 per cent
Failure to regularise the transferee (i.e. spy invoice)	100 per cent, minimum Euro 250	70 per cent, minimum Euro 250
Omitted reverse charge	Euro 500 to Euro 20,000 or 5 per cent to 10 per cent of the consideration if the transaction is not in the books with a minimum of Euro 1,000	Euro 500 to Euro 10,000 or 5 per cent of the consideration if the transaction is not in the books with a minimum of Euro 1,000
False declaration of intent/splattering	From 100 per cent to 200 per cent	70 per cent
Failure to export in 90 days	From 50 per cent to 100 per cent	50 per cent
Failure to pay	30 per cent (15 per cent for delays of up to 90 days)	25 per cent (12.5 per cent for delays of up to 90 days)
Undue Offsetting of Taxes	Non-existing credits: from 100 per cent to 200 per cent	Non-existing credits: 70 per cent (increase from half to double for fraudulent conduct)
Undue Offsetting of Taxes	Non-due credits: 30 per cent	Non-due credits: 25 per cent
Omitted/incorrect financial reporting	From 2,000 Euro to 21,000 Euro	From 1,500 Euro to 15,000 Euro
Failure to register acts	From 120 per cent to 240 per cent	120 per cent
Registration with a maximum delay of 30 days	From 60 per cent to 120 per cent, minimum 200 Euro	45 per cent
Insufficient value declaration	From 100 per cent to 200 per cent	70 per cent
Concealment of consideration	From 120 per cent from 240 per cent	120 per cent
Failure to declare inheritance	From 120 per cent from 240 per cent	120 per cent
Late declaration of inheritance (maximum 30 days)	From 60 per cent to 120 per cent (if no tax is due from Euro 150 to Euro 500)	45 per cent (with tax not due from Euro 150 to Euro 500)
False declaration of inheritance	From 100 per cent to 200 per cent	80 per cent
Failure to pay stamp duty	From 100 per cent to 500 per cent	80 per cent
Failure to pay tax on company books	From 100 per cent to 200 per cent	90 per cent with a minimum of 100 Euro