ITALY - new VAT penalties regime entered into force
Posted by: Morena Messina
ITALY - new VAT penalties regime entered into force
Starting from 1st September 2024, a new regulation regarding tax administrative penalties and payment infringements was introduced.
One of the pillars of the reform was a reduction of penalties aimed at enhancing fairness and proportionality of the system.
The most significant changes can be summarised as follows:
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A reduction of VAT penalties (generally charged on of late filing of VAT returns, unpaid VAT amounts and incorrect invoicing)
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Changes to the self- disclosure procedure
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Stronger approach against zero-rating intra-community supplies and exports (both attracting penalties of 50% of the VAT due)
Notwithstanding the above changes depict a positive reform that makes the overall penalties less onerous, the Italian system still foresees high penalties and very strict formalities for taxpayers, who should be vigilant in reviewing its position and obligations under the Italian VAT regime to minimise being impacted by same.
While the new penalties regime represents a concrete effort from the Italian VAT authority to make the entire penalty system fairer and inspired by the principle of proportionality, the reformed Italian penalty system still imposes:
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penalties of 120% of the VAT due in the event of omitted VAT return (previously charged between 120 and 240%)
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penalties of 70% of the VAT due for inaccurate filing of VAT return (previously charged between 90 and 180%)
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administrative penalty of 50% of the VAT due on zero rated intra EU supplies if the goods will not arrive within 90 days of their delivery.
It must be also noted that the new measures of the tax penalties should be applicable to facts and/or omissions occurred as from September 1, 2024 – which is not line with the original draft of the Italian VAT authority and the overall aim of the reform, leaving some doubts with reference to the regime applicable to facts and/or omissions occurred before such date.
Therefore, further clarifications from the Italian Revenue Agency are expected.