Skip to content The Revenue Agency Tax Agreement (Concordato Preventivo Biennale) is one of the tools proposed by the Italian government in 2024 that can bring significant advantages and tax savings to companies.
The tax benefit: what is the Revenue Agency Tax Agreement
Through the Revenue Agency Tax Agreement (CPB), companies can define in advance the declared income for the years 2024 and 2025.
The determination of such income is made through a proposal by the Revenue Agency, which establishes the amounts to be declared for tax purposes for the years 2024 and 2025.
This leads to significant advantages for companies:
- Knowing in advance and with certainty the taxes due for the two years covered by the agreement;
- Benefiting from tax relief on any portion of income exceeding the established amount;
- Simplifying tax compliance and reducing the risk of future audits or assessments.
Which entities can apply this tax option
The beneficiaries are all VAT-registered companies that apply the ISA indicators.
Specifically:
- Freelance professionals under the ordinary tax regime
- Sole proprietorships under the ordinary tax regime
- Companies
How the tax benefit works
Based on the ISA indicators and the income reported for the year 2023, the Revenue Agency determines an income which, if accepted by the company, will be the basis for calculating the taxes to be paid for the year 2024.
The amount of income exceeding this agreed-upon figure will be completely tax-free.
Social security contributions
The option also applies to social security contributions. Therefore, such contributions will only be calculated based on the income determined by the Revenue Agency. Any excess amount will be exempt from social security contributions.
This does not apply to payments made to private funds associated with certified professional registers.
When will the CPB tax benefit expire?
The deadline for opting into the Biennial Revenue Agency Agreement (CPB) is December 12, 2024.
Practical examples of the tax relief in Italy
Practical example: income from self-employment/freelance work
- Income for 2023: € 20,000
- Proposed income for 2024 (for the agreement): € 28,000
- Provisional income for 2024 (actual, without the agreement): € 35,000
Application of the 15% flat tax
The proposed income for 2024 under the agreement is € 28,000.
The difference between the proposed income for 2024 and the declared income for 2023 is € 8,000.
This amount will be subject to a substitute tax of 15% (10% in certain cases).
Flat tax to be paid: € 1,200
Determination of taxes (in case of opting for CPB)
The taxation following the application of the agreement will be as follows:
€ 20.000 x 23% (first IRPEF tax bracket) = € 4,600
€ 8.000 x 15% (10% in certain cases) = € 1,200
Total taxes paid in case of opting for the agreement = € 5,800
Determination of taxes (without opting for CPB)
The income expected by the taxpayer for the year 2024 is, in this case, € 35.000.
Taxes due
€ 28,000 x 23% = € 6,440
€ 7,000 x 35% = € 2,450
Total taxes paid without opting for the agreement = € 8,890
To simplify, only the advantage on the IRPEF tax is considered. It is noted that the proposed income is also valid for regional and municipal surtaxes, for IRAP, and for social security contributions.
Advantage of the agreement
Tax savings = taxes due without opting for the agreement (€ 8,890) – taxes due with opting for the agreement (€ 5,800) = € 3,090.
This benefit is realized because the taxpayer expects to earn an income higher than the one proposed by the Revenue Agency. Therefore, they will pay taxes based on an income lower than what they would have declared without the agreement.
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Practical example: business income for a capital company (Limited Liability Company – Srl)
- Income for 2023: € 100,000
- Proposed income for 2024 (for the agreement): € 120,000
- Projected income for 2024 (actual, without the agreement): € 150,000
To simplify, only the advantage on the IRES tax is considered. It is noted that the proposed income is also valid for IRAP and social security contributions.
Application of the 15% flat tax
The proposed income for 2024 under the agreement is € 120,000.
The difference between the proposed income for 2024 and the income declared in 2023 is € 20,000.
This amount will be subject to a substitute tax of 15% (10% in certain cases).
Flat tax to be paid for IRES: € 3,000.
Determination of taxes (in case of opting for CPB)
The taxation following the application of the agreement will be as follows:
€ 100,000 x 24% (IRES tax rate) = € 24,000
€ 20,000 x 15% (10% in certain cases) = €3,000
Total taxes paid in case of opting for the agreement = €27,000
Determination of taxes (without opting for CPB)
The income expected by the taxpayer for the year 2024 is, in this case, € 150,000.
Taxes due
€ 150,000 x 24% = € 36,000
Total taxes paid without opting for the agreement = € 36,000
Advantage of the agreement
Tax savings = taxes due without opting for the agreement (€ 36,000) – taxes due with opting for the agreement (€ 27,000) = € 9,000.
This advantage is realized because the taxpayer expects to earn an income higher than the one proposed by the Revenue Agency. Therefore, they will pay taxes based on an income lower than what they would have declared without the agreement.
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