New penalty system for failure to pay and evasion of social security contributions

News . 31/2024

In News . 90 of October 4, 2024, INPS provides guidance on changes to the penalty systemintroduced by Decree-Law No. 19 of March 2, 2024, containing: “Further urgent provisions for the implementation of the National Recovery and Resilience Plan (PNRR),” subsequently converted, with amendments, by Law No. 56 of April 29, 2024, and effective effective as of September 1, 2024.

These changes, governed by Article 30 of the aforementioned Decree-Law, aim to encourage companies to voluntarily bring their contributions into compliance, simplify communication with the Social Security Administration, and strengthen the penalty system for those who fail to meet their contribution obligations.

Below, we summarize these changes and their implications for businesses, which vary depending on whether the issue involves a failure to pay contributions or contribution evasion.

Failure to Pay Contributions

The failure to pay contributions referred to in Article 116, paragraph 8, subparagraph (a), of Law No. 388/2000 occurs in the event of non-payment or late payment of contributions or premiums, the amount of which can be ascertained from the mandatory reports and/or records submitted by the statutory deadline.

Law No. 19/2024 amended the rules governing civil penalties for the failure to pay or late payment of social security contributions, stipulating at the end of the provision that “if the payment of contributions or premiums is made within 120 days, in a single lump sum, voluntarily and before any objections or requests from the tax authorities, the surcharge shall not apply.”

Therefore, without prejudice to the standard civil penalty equal to the official reference rate plus 5.5 percentage points per year, up to a maximum of 40% of the amount due, in order to encourage compliance, the legislature has introduced a concessionary measure under which, if payment is made in a single installment within 120 days of the statutory due date, on a voluntary basis, the 5.5-point surcharge on the official reference rate does not apply. Payment is considered “in a single lump sum” even if made in multiple installments on different dates, provided that these installments are made within the 120-day limit from the statutory due date and that the total amount paid corresponds to the full contribution due. Conversely, the preferential measure does not apply in the case of payment in installments, as the legislature has not provided for such an option.

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