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Supplementary declaration to benefit from optional tax regimes for the previous years

With the reply to ruling n 187 from 2020, the Revenue Agency denies the possibility to submit a supplementary declaration in order to enjoy optional tax regimes for the prior years.

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With the reply to ruling n 187 from 2020, the Revenue Agency denies the possibility to submit a supplementary declaration in order to enjoy optional tax regimes for the prior years. This reply specifically concerns the regional tax on productive activities, which is applied according to the method defined by the article 10-bis, subparagraph 2, legislative decree 446 from december 15th 1997. During the year 2016 there was a change in the management information system, which caused the company to mistakenly abandon the optional regime and wrongly pay an additional amount of taxes until 2020.

The Revenue Agency’s position

The circular n 148/E issued on july 26th 2000 ad the circular n 234/E from december 20th 2000 states that the option and the revocation of a tax regime is assumed by the conclusive acts of the taxpayer or by the accounting entries. The option or the revocation is valid only if it is specifically implemented at the start of the tax period.

Therefore, the Agency does not recognize any rectifiable mistake, since we are in front of a deliberate choice made by the company, that cannot be adjusted according to the 2nd article, subparagraph 8 from the presidential decree n 322 issued in 1998, which only allows adjustments in case of errors or omissions.

In this regard, the resolution n 325/E from october 14th 2002 confirms that options cannot be rectified if not in case of intent, violence or error. In order for a vice to be classsified as an “error” it needs to relevant and essential and it cannot be the main reason behind the wrong choice.

What about the other optional tax regimes?

When it comes to the other optional tax regimes, the taxpayer may find some limitations in case the already submitted tax return they has some omissions.

The circular n 33/E from 2020 on the special tax regime for returning workers states that a supplementary declaration can only be valid if it is submitted in the 90 days following the deadline, otherwise it can be submitted in the following years as long as they are not past the 5 year long validity period.

On the other hand, the special tax regime for foreign retirees, which is determined by the article 24-ter from the law 917 of the Italian tax code, can be applied if the request is submitted in the 90 days after the deadline but there are more limitations.

If the taxpayer already paid the optional tax but forgot to declare the benefit on the tax return then they still have time until the tax return deadline to submit a correction through a performing remission.

If the taxpayer did not pay the optional tax or they omitted a part of it then the option cannot be implemented because there is no conclusive conduct.

Finally, it is important to keep in mind that the optional tax regime can only be implemented from the year of the relocation.

The Revenue Agency also recognized the possibility of reimbursing the higher withholding taxes due to the non-inclusion in the facilitated remuneration of the income from the exercise of the stock options or from the vesting of the RSU due to a problem in setting up the software used for processing of the instant company’s payslips.

Regulatory Framework

Reply to ruiling n 187/2022

Reference (Italian only)

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