New Italian tax decree imposes stricter evasion penalties

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

New Italian tax decree imposes stricter evasion penalties

Sponsored by

sponsored-firms-hager.png
A series of important changes are imminent

Gian Luca Nieddu and Barbara Scampuddu of Hager & Partners consider the impact of the innovative provisions brought forward by October 2019’s law decree.

The Law Decree no. 124 of October 26 2019 (published in the Italian Official Gazette no. 252 dated October 26 2019), has set out a number of new tax provisions. The new provisions are immediately effective, but will have to be converted into law by the Italian Parliament by December 25 2019 to become final.

Prohibition on the set-off of tax credits in the event of tax debt assumption 


The previous tax codes had provided for the assumption of third party tax debts without exempting the original tax debtor from tax liability. The tax decree amends the law and sets forth that the party who assumes the debt is excluded from the use of its own tax credits to offset the due payments.



Limit for set-off credits – exceeds €5,000 

The new provisions widen the existing rules concerning the set-off payments in respect to VAT credits by extending it to encompass other types of taxes such as direct and substitute. Credits in regard to direct taxes exceeding €5,000 can be used as set-off payments only after the tenth day following the filing of the income tax return or the request from which such tax credit emerges. 



Tax evasion criminal thresholds 

The new decree imposes stricter penalties and lower criminal thresholds for tax evasion. For the offence of filing a false tax return, the amount for the potential evaded tax has been reduced to €100,000 (from €150,000), while the under-declared taxable base has been cut to €2 million (from €3 million). Meanwhile, the criminalisation threshold for withholding taxes resulting from a tax return or a certificate has been reduced to €100,000 (from €150,000); and for failing to pay VAT is reduced to €150,000 (from €250,000). Furthermore, the provision that had previously excluded the criminalisation of evaluations that differ by less than 10% from the correct amount has been repealed.

more across site & shared bottom lb ros

More from across our site

The UK’s Labour government has an unpopular prime minister, an unpopular chancellor and not a lot of good options as it prepares to deliver its autumn Budget
Awards
The firms picked up five major awards between them at a gala ceremony held at New York’s prestigious Metropolitan Club
The streaming company’s operating income was $400m below expectations following the dispute; in other news, the OECD has released updates for 25 TP country profiles
Software company Oracle has won the right to have its A$250m dispute with the ATO stayed, paving the way for a mutual agreement procedure
If the US doesn't participate in pillar two then global consensus on the project can’t be a reality, tax academic René Matteotti also suggests
If it gets pillar two right, India may be the ideal country that finds a balance between its global commitments and its national interests, Sameer Sharma argues
As World Tax unveils its much-anticipated rankings for 2026, we focus on EMEA’s top performers in the first of three regional analyses
Firms are spending serious money to expand their tax advisory practices internationally – this proves that the tax practice is no mere sideshow
The controversial deal would ‘preserve the gains achieved under pillar two’, the OECD said; in other news, HMRC outlined its approach to dealing with ‘harmful’ tax advisers
Former EY and Deloitte tax specialists will staff the new operation, which provides the firm with new offices in Tokyo and Osaka
Gift this article