Introduction
At the heart of the Italian tax system, a groundbreaking shift is poised to make its mark on VAT number holders: the biennial preventive agreement.
This innovation not only promises to rewrite the rulebook between taxpayers and the Tax Authority but also heralds an era characterized by the simplification of tax and declaration obligations.
With the introduction of this reform, officially implemented by legislative decree no. 13/2024 on February 21, 2024, the fiscal horizon expands towards a future where voluntary compliance by taxpayers becomes the norm, thanks to the option to adhere to a tax imposition calculated in advance for two years, free from the uncertainties of income fluctuations.
How It Works
The biennial preventive agreement serves as a streamlined conversation between taxpayers and the Revenue Agency, which devises a taxable income proposal based on available information, including the Synthetic Indices of Reliability (ISA).
Taxpayers who accept this proposal can count on a predetermined taxable base for the following two years, ensuring greater fiscal stability and minimizing the risks of potential disputes.
This tool is designed for holders of business income and self-employment income, including professionals operating within the national territory.
Access Requirements and Key Dates
Access to the biennial preventive agreement represents a significant turn for VAT number holders in Italy, offering a unique opportunity to plan and manage tax obligations with greater certainty.
However, to benefit from this innovation, taxpayers must meet specific criteria, outlined to ensure tax regularity and transparency.
Eligibility Requirements:
Tax Regularity: No outstanding tax debts at the time of the agreement request.
Income Statements: Submission of all income statements for previous fiscal years.
Social Security Contributions: Regularity in the payment of social security contributions for holders of business income and self-employment income.
VAT Obligations: Fulfillment of VAT obligations for previous fiscal years.
Key Dates:
October 15, 2024: Deadline for submitting the request to adhere to the biennial preventive agreement.
Various Deadlines: Several deadlines are set for the submission of documents and for the completion of procedures necessary for activating the agreement.
Advantages and Challenges
The biennial preventive agreement stands out for its benefits, including a reduction in tax audits during the two-year validity period and the potential for a lower tax burden for taxpayers who exceed the agreed estimates.
However, the obligation to declare actual income and to fulfill ordinary accounting and declarative obligations persists.
Despite the predetermined taxable base, VAT remains subject to the usual rules, keeping the related obligations unchanged.
Impact on the Tax System
The introduction of the biennial preventive agreement aims to simplify taxpayers' lives by offering greater fiscal predictability and allowing the Revenue Agency to focus its control resources on cases with a higher risk of evasion.
This strategy is part of a broader tax reform context, aiming to modernize and make the Italian tax system more efficient.
Towards a New Fiscal Era: Practical Guide to Adherence
To participate in the biennial preventive agreement, taxpayers must follow a detailed path, which includes various deadlines throughout the fiscal year 2024:
June 15, 2024: Availability of the software application for acquiring the essential data for the agreement proposal.
By April 2024 (regularly by March 15): Provision by the Revenue Agency of the necessary software to collect data for the proposal.
By July 2024 (in subsequent years, by June): Deadline for adhering to the proposal, with a possibility of extension for the first year.
After the Revenue Agency formulates the proposal, taxpayers will have the opportunity to adhere within the established terms, committing to declare the agreed amounts for the tax periods involved and to respect the usual accounting and declarative obligations.