Tax credit limitations
04/09/2025
Tax credit limitations:
an overview on Italian local rules of compliance
As the deadline for VAT Return is approaching (April 30th ) and with an eye on forthcoming preparation of Tax Return for our companies and privates, it is useful to review certain restrictions pertaining tax credit when it comes to "offset" them with tax due amount, operation that can be performed in our local payment file, F24.
Article 1, paragraph 72 of Law 234/2001 says that the annual limit for cross-tax offsetting is established at €2 million. Consequently, taxpayers may utilise in compensation up to this threshold for tax liabilities, social security contributions, and other amounts payable to government entities, regional authorities, and social security institutions by employing tax credits accrued against these same entities through periodic tax returns or declarations.
This offsetting maximum amount applies to the whole annual fiscal year - January to December - and must be checked anytime the F24 payment form is submitted and operates cumulatively across all categories of tax credits.
Moreover, for tax credits exceeding €5,000, taxpayers must have electronically submitted the relevant tax return model with an affixed attestation of compliance (visto di conformità).
A further limitation on tax credit offsetting, as prescribed by Article 31, paragraph 1 of Decree Law 78/2010, concerns the prohibition on utilising such credits in F24 forms when there are outstanding treasury tax liabilities recorded in the tax rolls exceeding €1,500 for which the payment deadline has elapsed.
An additional limitation is that, from July 1, 2024, taxpayers with outstanding treasury tax liabilities recorded in the tax rolls aggregating to more than €100,000 with elapsed payment terms will be categorically precluded from exercising cross-tax offsetting . This prohibition shall apply comprehensively, encompassing both the portion of credit exceeding the liability and credits derived from the Tax Return
All this provisions allow the Revenue Agency (Agenzia delle Entrate) to suspend, for up to 30 days, the execution of payment orders containing offsetting arrangements.
Article 1, paragraph 72 of Law 234/2001 says that the annual limit for cross-tax offsetting is established at €2 million. Consequently, taxpayers may utilise in compensation up to this threshold for tax liabilities, social security contributions, and other amounts payable to government entities, regional authorities, and social security institutions by employing tax credits accrued against these same entities through periodic tax returns or declarations.
This offsetting maximum amount applies to the whole annual fiscal year - January to December - and must be checked anytime the F24 payment form is submitted and operates cumulatively across all categories of tax credits.
Moreover, for tax credits exceeding €5,000, taxpayers must have electronically submitted the relevant tax return model with an affixed attestation of compliance (visto di conformità).
A further limitation on tax credit offsetting, as prescribed by Article 31, paragraph 1 of Decree Law 78/2010, concerns the prohibition on utilising such credits in F24 forms when there are outstanding treasury tax liabilities recorded in the tax rolls exceeding €1,500 for which the payment deadline has elapsed.
An additional limitation is that, from July 1, 2024, taxpayers with outstanding treasury tax liabilities recorded in the tax rolls aggregating to more than €100,000 with elapsed payment terms will be categorically precluded from exercising cross-tax offsetting . This prohibition shall apply comprehensively, encompassing both the portion of credit exceeding the liability and credits derived from the Tax Return
All this provisions allow the Revenue Agency (Agenzia delle Entrate) to suspend, for up to 30 days, the execution of payment orders containing offsetting arrangements.