The Council of Ministers’ meeting on 24 May 2024 definitively approved the text of the implementing decree of tax delegation containing penalty system reform.
Among the new features we bring to light the possibility of proceeding, in the context of active voluntary correction of errors, with the application of the so-called cumulative judgment, an institution for the imposition of sanctions which, until now, could only be activated by the Tax Authority. Said party, in the event of a combination of several violations, could apply the sanction relating to the most serious violation with the application of specific coefficients (thus limiting the overall sanctions).
Starting on 1 September 2024 (editor’s note: the new provisions may in fact be applied in the event of violations committed starting specifically from that date on, therefore notwithstanding the principle of favor rei), each individual taxpayer shall be able to independently apply the cumulative judgment system, to a limited single tax principle and single tax period, as provided for by the new article 12, paragraph 8 of Legislative Decree 472/1997.
Considering the initial difficulties that may arise during the application of the institution at hand, the Internal Revenue Agency has already mentioned that specific software shall be made available to taxpayers for determining the penalty due.
It is worth pointing out that the cumulative judgment shall not be applied either to omitted/late payments or to undue compensation.
A further development regarding the implementing decree of the tax delegation is that of the restructuring of the reductions in sanctions applicable in the event of voluntary correction of errors pursuant to article 13 of Legislative Decree 472/1997.
More specifically, sanction reduction remains unchanged in the event of voluntary correction of errors made by the deadline for declaration of the year when the violation was committed (editor’s note: the reduction of the sanction to 1/8 of the minimum). On the other hand, a reduction to 1/7 of the minimum is provided for in the event of violations being committed after the deadline for declaration of the year when the violation was committed (editor’s note: previously the reduction to 1/7 was provided for violations committed by the deadline for declaration of the year following the one where error was committed, as well as the reduction to 1/6 for violations committed after the deadline for declaration of the year following the one when the error was committed).
In summary, even in the presence of questionnaires, orders to appear before court or requests for documents, if the deadline for declaration of the year when the violation was committed has passed, the reduction to 1/7 of the minimum shall be applicable.
The sanction reduction is excluded if the declaration is submitted with a delay of more than 90 days.
In this case as well, the provisions in question shall apply only for violations committed starting on 1 September 2024.
