Conversion into Law of the Tax Decree

Subject: Conversion into Law of the Tax Decree containing 'urgent provisions on tax matters and for indispensable needs' (Decree-Law No. 124/2019)

Following the conversion into Law of the decree containing 'urgent provisions on tax matters and for indispensable needs' (Decree-Law No. 124/2019), the main innovations of particular interest to employers/tax withholding agents are reported, as approved or modified during the conversion process.

Additionally, clarifications regarding “withholding taxes and offsets in contracts and subcontracts” issued by the Italian Revenue Agency are also provided.

Offsetting of Tax Credits Accrued from 2019

The possibility of offsetting annual/quarterly VAT credit, IRPEF credit, IRES credit, and IRAP credit is confirmed, provided their amounts exceed 5,000.00 euros annually, commencing from the tenth day following the submission of the annual declaration or the application from which the credit emerges.

Under the new provisions, the 2019 IRPEF/IRES/IRAP credit can therefore be offset following the submission of the respective declaration, and no longer from January 1, 2019. Consequently, by submitting the income tax return on September 30, 2020 (tax year 2019) from which a credit exceeding 5,000.00 euros results, this credit will be usable from October 10, 2020, exclusively through payment via Form F24 using the Entratel/Fisconline online services.

Therefore, to utilize credits related to direct and substitute taxes, as well as the IRAP credit, for offsetting in Form F24, compliance with the following conditions is required starting from January 1, 2020:

A) A prior submission of the declaration from which the credit pertaining to the following categories emerges: substitute taxes, income taxes and surcharges, IRAP, and VAT;

B) The submission of Form F24 through the online services of the Italian Revenue Agency, for credits related to: substitute taxes, income taxes and surcharges, IRAP, VAT, benefits, and credits indicated in Section RU of the income tax return.

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