When do local taxes become void?

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When Are Local Taxes Prescribed?

Understanding local taxes is crucial for citizens as it often involves different entities imposing these tax obligations.
Local taxes can differ significantly from state-imposed taxes, raising important considerations regarding their prescription timelines.
Distinction becomes important, as the deadlines for payment requests vary between amounts owed to the State and those due to local entities like Regions, Provinces, or Municipalities.

All citizens contribute to public expenditure through taxes, typically calculated based on income, although there are fixed taxes, such as VAT, that apply uniformly regardless of income.

What Are the Different Types of Taxes?

Taxes paid by citizens can be categorized into:

• Taxes: These funds support general public expenditure, including security, education, and healthcare, without being tied to specific services.
  Key examples are IMU, IRPEF, VAT, stamp duties, registration fees, mortgage taxes, and cadastral taxes.
• Fees: These are charges for specific services provided to citizens, with a prime example being the Tari, covering waste collection and disposal.

Both taxes and fees are subject to prescription laws, meaning if they’re not collected within a designated timeframe, they can no longer be demanded.

What Local Taxes Exist?

Local taxes finance various services provided by local entities such as Municipalities, Provinces, and Regions.
Common local taxes include:

• IMU: An property tax applicable to real estate (excluding primary residences not classified as luxury).
• Tari: A municipal fee for waste management services.
• Tosap: Tax for occupying public land, payable to local authorities.
• Tourist Tax: Collected by accommodation facilities, managed by Municipalities.
• Additional Rates on IRPEF: Levied by local governments.

Prescription Period for Local Taxes

According to Article 1, paragraph 161 of Law 296 of 2006, local authorities must notify tax assessments by December 31 of the fifth year following the year the tax was originally due.
Thus, local taxes have a prescription period of 5 years after which they can no longer be claimed.

It’s important to note recent adjustments in this timeline due to the COVID-19 pandemic, which led to considerable suspensions of tax notification and collection timelines, affecting prescription periods as well.
The DL 41 of 2021 extended these periods by 24 months for debts referred to the Revenue Agency during the suspension period (March 8, 2020, to December 31, 2021).
As a result, the prescription period for local taxes may extend by two years for any assessments filed during this suspension.

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