New limits on tax compensations
| Insights
At the Article 3 paragraph 1 law Decree number 124/2019 -tax Decree linked Budget law 2020- Government announced new limits to compensation of credits. News will be applied to credits already realized for fiscal year 2019, that is income declaration 2020 and irap declaration 2020.
VAT legislation on compensation of credits will be extended to all other tax credits. For amounts exceeding EUR 5000, the compensation can be made starting from the tenth day after the presentation of the declaration or even from the request from which the credit emerges.
Tax credits arising from fiscal year 2019 can be used after the presentation of declaration, that is from May 2020.
New limits will be not applied to tax substitutes, who has paid withholding in exceeds.
For amounts not exceeding EUR 5000 can be used freely and without compliance certification from professional.
Starting from March 2020, will be applied a fixed penalty of EUR 1000 for undue compensation.
Purpose of this provision is:
– avoid undue compensation;
– allow the revenue agency a prior check to verify the existence of the tax credit, discard payment mandates that they contain compensation of credits that do not result from declaration or discard all declaration without compliance certification from professional.