The Italian Tax Authorities (ITA) issued Circular No. 42/E on 12 October 2016, providing clarifications on available measures to reduce administrative penalties, as amended by Law No. 190 of 23 December 2014 and Legislative Decree No. 158 of 24 September 2015.

According to the circular in case of omitted tax returns the penalties will be  reduced to one tenth of the minimum (i.e. EUR 25) if the return is filed within 90 days..

In cases of late payment of taxes the penalties will be reduced as follows:

–          0.1% of the tax due for each day of delay, if paid within 15 days from the due date;

–          1.5% of the tax due if paid within 30 days from the due date; and

–          15% of the tax due if paid within 90 days from the due date.

For erroneous or unfaithful returns the penalties will be generally reduced to:

–one ninth of the minimum if the taxpayer corrects the violation within 90 days;

–one eighth of the minimum if the taxpayer corrects the violation within the deadline for submission of the tax return relating to the fiscal year in which the violation is made;

–one seventh of the minimum if the taxpayer corrects the violation within the deadline for submission of the tax return relating to the fiscal year following the one in which the violation is made; and

–one sixth of the minimum in other cases.

The Tax Authorities have clarified that in cases of minor errors that can be detected during an automatic or formal control; only the penalty for late payment of taxes will apply. On the other hand in case of cases of more serious mistakes that cannot be detected during an automatic or formal control:

  • where the correct return is filed within 90 days from the filing date, both the penalty for late payment of taxes and the penalty for violations related to the content and the documentation of the tax return will apply; and
  • where the correct return is filed later than 90 days from the filing date, the higher penalty for unfaithful return will generally apply.
  • In both cases, penalties can be eventually reduced according to the rules described above.