The 2015 Stability Law (Law No. 190/2015), in view of simplifying the relationship between the tax authorities and taxpayers, has foreseen a substantial extension of the ways and deadlines for applying the so-called voluntary correction of tax return, governed under article 13 of Legislative Decree No. 472/1997.
The new development brought about by the Stability Law acts at different levels. First, the change brought about is aimed at allowing taxpayers to settle all sanctions based on the moment of the effective settlement of the breach, by modulating the extent of the sanctions in light of the timing of the voluntary correction.
Please note that article 13, paragraph 1, letters a) and b), of Legislative Decree No. 472/1997, in the version in force until 31 December 2014, only foresaw two voluntary correction of tax return possibilities, namely:
- no later than 30 days as of the failure to pay the tax (sanction reduced to 1/10)
- or to 1/8, if settled no later than the deadline for filing of the tax return for the year in which the breach was committed (or in the event of taxes in respect of which there was no return, within a year following the omission or error).
The Stability Law has added letters a-bis), b-bis), b-ter) and b-quater) to the text of paragraph 1, in order to extend the timeframe for the voluntary settlement beyond the expiry of the deadline for filing the tax return for the year in which the breach was committed.
In particular, following any such change, the new wording of article 13, paragraph 1, of Legislative Decree No. 472/1997 foresees the following reductions in the ordinary sanctions concerning the committed error:
- a) to one-tenth of the minimum (equal to 3.00%), in those cases of failure to pay the tax or an advance, if it is made no later than thirty days following the date of omission
- a-bis) to one-ninth of the minimum (equal to 3.33%), if the settlement of the errors and omissions, even if having an impact on the calculation or payment of the tax, is made no later than the ninetieth day following the deadline for filing the tax return or, if a regular tax return is not foreseen, no later than ninety days following the omission or error
- b) to one-eighth of the minimum (equal to 3.75%), if the settlement of the errors and omissions, even if having an impact on the calculation or payment of the tax, is made no later than the deadline for filing the tax return for the year during which the breach was committed or, if a regular tax return is not foreseen, no later than a year following the omission or error
- b-bis) to one-seventh of the minimum (equal to 4.28%), if the settlement of the errors and omissions, even if having an impact on the calculation or payment of the tax, is made no later than the deadline for the filing of the tax return for the year following that during which the breach was committed or, if a regular tax return is not foreseen, no later than two years following the omission or error
- b-ter) to one-sixth of the minimum (equal to 5.00%), if the settlement of the errors and omissions, even if having an impact on the calculation or payment of the tax, is made after the deadline for filing the tax return for the year following that during which the breach was committed or, if a regular tax return is not foreseen, after two years following the omission or error.
The cases under letters a), a-bis) e b), which allow for the relevant voluntary correction of tax return no later than the deadline foreseen for filing the tax return for the year during which the breach was committed, apply to most taxes.
The new cases under letters b-bis) and b-ter) which allow, instead, to make the relevant voluntary correction even beyond the deadline foreseen for filing the tax return for the year during which the breach was committed, only concern the taxes managed by the Inland Revenue.
Furthermore, the new development brought about by the Stability Law is aimed at enabling taxpayers to settle also in the event of intimations already known by the taxpayers, such as to overcome the provision under the first paragraph of the cross-referenced article 13, pursuant to which the voluntary correction of tax return was precluded if the breach had been notified or, in any event, upon commencement of any accesses, inspections, assessments or other administrative checks with which the defaulting party had been formally served.
With the addition under the new paragraph 1-ter of article 13, as regards the taxes managed by the Inland Revenue, taxpayers may also settle upon already commenced controls and upon already served intimations, provided that deeds of settlement or assessment have not been served, or provided that irregularity notices have not been received, following the settlement or formal control of the tax returns.
The further new case foreseen under article 13, paragraph 1, letter b-quater) falls within this context, pursuant to which the sanctions are reduced to one-fifth should the taxpayers voluntarily correct the tax return following commencement of the assessment related activity by the assessment bodies.
In this respect, through Circular 6/E of 2015, the Inland Revenue has clarified that the bar to the voluntary correction of tax return will only apply in connection with the irregularities which may be found within the scope of automatic and formal controls, thus, the receipt of a kind notice, for instance, for the failure to pay VAT for 2013 will not jeopardise the possibility to voluntarily correct the tax return for breaches concerning the same tax and the same tax period, which 'may not be captured' by such type of control.
The above-mentioned new provisions are made applicable effective as from 1 January 2015.
In particular, with the above-mentioned Circular, the Inland Revenue has specified that the new rules also apply to those breaches already notified by the tax authority as at 1 January 2015 (for instance, by serving the so-called PVC, that is a tax assessment report), but 'which have not yet been subject to assessable and/or settlement deeds, or to payment orders'.