The Italian Revenue Agency recently provided clarifications regarding the responsibilities of taxpayers under the flat-rate scheme for the withholding taxes omitted by mistake.
In a recent Query No. 245 of March 8, 2023, a withholding agent sought clarification regarding the withholding tax not applied on fees paid between January 1, 2021, and October 2022 to a freelance collaborator who had declared to avail of the flat-rate scheme.
The withholding agent had utilized the professional services of the collaborator for activities as a service presenter and had paid the fees earned by the collaborator during the 2021 tax periods without applying the withholding tax.
The collaborator had issued invoices without exercising the VAT reversal charge and without showing the withholding tax, and subsequently communicated that they could no longer benefit from the flat-rate regime starting from the 2021 tax year due to the loss of the income requirement.
The Revenue Agency observed that the collaborator had incorrectly applied the flat-rate regime and had not complied with the VAT and withholding tax regulations.
However, the Agency emphasized that the flat-rate regime does not involve the application of withholding tax, but in case of incorrect application of the regime, the taxpayer can remedy by issuing adjustment notes either to increase or decrease to integrate or cancel out the original invoices with the VAT reversal charge and indicate the withholding tax.
Therefore, the withholding agent is not required to make the payment of the unperformed withholdings, nor to submit the unique certifications and the integrative Model 770/2022.
It is important to emphasize that taxpayers under the flat-rate regime must pay particular attention to their specific responsibilities to avoid errors in managing withholding taxes and VAT.