You are in

Reduction of civil penalties

Publication: 03/05/2022

The taxpayer can claim the reduction, up to the extent of the legal interests, of the envisaged civil penalties, for omitted or delayed payment of the contributions, by paying them in full (article 116 paragraph 17 of Law no. 388 of 23 December 2000).

The reduction is intended for taxpayer under one of the conditions provided for in article 116, paragraphs 15 and 16 (last part), Law 388/2000, for non-economic institutions and institutions, foundations and non-profit associations, in regard to which the possibility of obtaining the reduction of civil penalties with reference to the sole hypothesis of omission is recognised.

The reduction can also be requested (article 116, paragraph 16, Law 388/2000) by companies subject to insolvency proceedings. In these cases, the benefit applies also to civil penalties due to the extent of the evasion.

The criteria and methods for reducing civil penalties have been established by the Board of Directors of INPS by resolution no. 1 of 8 January 2002, which implemented the directive of 19 April 2001 of the Ministry of Labour and Social Policy in agreement with the Minister of Economy and Finance.

For companies in crisis, the duration of the benefit is of maximum one year, whilst it can increase up to two years in cases of re-organisation, restructuring or conversion. However, the reference period must be linked and/or coincide with the maximum concession period. The most favourable period for the applicant will always be applied.

Considering the previous corporate behaviour, the reduction is granted up to the extent of existing legal interests on the date of submission of the claim or the same increased by 50%.

With regard to companies subject to insolvency proceedings, in the event of omissions, the civil penalties are reduced by the value of TUR (official reference rate) (Interest rate on the main Refinancing operations of the Eurosystem), whilst two points must be added to the TUR in case of evasion. In any case, the reduction cannot be less than the legal interest.

For non-financial public institutions, non-profit bodies, foundations and associations, the penalties are calculated at the legal interest rate for institutions whose financial income consists mainly of public financing, and in all other cases the same interests increase by 50%.

The reduction of civil penalties can be granted without prejudice to the full payment of contributions and premiums due to pension and welfare schemes for the period covered by the claim.

Applicants who fail to pay the established instalments loose the benefit.

The reduction is granted only if the missed or delayed payment is due to:

  • objective uncertainties that emerged following conflicting case-law or administrative orientations on the recurrence of social contributions;
  • malicious facts of third parties reported to the judicial authority within three months of the offence;
  • crisis, re-organisation, conversion or restructuring of companies subject to the contribution for Wage Compensation Fund (CIG) which have obtained a formal provision for admission to the Extraordinary Wage Compensation Fund (CIGS) by the Ministry of Labour and Social Policy or whose state of crisis has been ascertained by the same Ministry.

In case of lyric-symphonic foundations, the recognition of the state of crisis envisaged by paragraph 1, article 11, Decree-Law no. 91 of 8 August 2013, is certified by the ministerial decree approving (corporate) restructuring plans. The evaluation of the Ministry of Labour and Social Policy is not necessary for the reduction of civil penalties.

In the case of non-financial public bodies, institutions, foundations and non-profit associations, the reduction of civil penalties is granted only for non-fulfilment due to coincident delays in the provision of contributions or public funding provided for by law or agreement. The benefit is granted only if the contribution regularisation takes place within 20 days from the loan disbursement.

The claim for reduction of civil penalties must be submitted within the limitation period provided for the omitted contribution.

The claim must be submitted online to INPS, through the dedicated service; alternatively, at the INPS office which manages the applicant's tax position.

For further clarifications, see Circular no. 88 of 9 May 2002, and Circular no. 56 of 2 May 2014.