Balance Payment and First Installment of Taxes and Contributions: The New Schedule

Updates on Tax Payment Options

The deadline for paying the final balance and the first instalment can now be split into 7 instalments, with the final deadline extending from November to December.
Following Circular 9/E dated May 2, 2024, the Revenue Agency provides important clarifications regarding the simplification measures introduced by the Compliance Decree.
This circular also explains the enhancements to digital services available to citizens as part of the tax reform.

Key Points of Circular 9/E

Building upon the clarifications outlined in the April 2024 Circular 8, which focused on declarations, the new circular delves into:

• tax payments;
• mandatory communications;
• digital services;
• payment methods;
• sending communications by the Revenue Agency.

Changes in Instalment Payments for Balances and First Instalments

Article 8 of the Compliance Decree had already introduced changes to the payment schedule for VAT and non-VAT holders, as well as individuals with insurance coverage under one of the INPS management systems.
These entities are now allowed to stagger payments for balances and first instalments of taxes and contributions resulting from filed declarations.

If opting for instalment payments, subsequent payments after the first instalment will incur a 4% annual interest rate, starting from the original due date month.

The new regulations bring two significant changes:

• The deadline to finalize the installment plan for taxes related to the 2023 tax period has been extended from November to December 16.
• For simplification purposes, any monthly instalments should be due on the 16th of each month, provided that the installment plan concludes by December 16 of the declaration year.

How to Opt for Instalment Payments?

With this update, individuals can now spread payments resulting from income tax declarations across 7 instalments, provided that the number of instalments does not exceed the months between the original deadline (June 30) and December 16.

The total amount due will be divided based on the number of instalments chosen by the taxpayer (from 2 to 7), with the obligation to pay the first instalment by the original deadline of June 30 (for 2024, shifted to July 1 due to the holiday).
Subsequent instalments must then be paid monthly on the 16th of each month.

Instalment Example

Let’s consider an example.
If a taxpayer has an outstanding personal income tax balance of €2,800 and decides to opt for instalments according to the recent regulation, they would pay:

• €400 with the first instalment by July 1, 2024 (June 30 being a holiday, shifting the payment date);
• €400 + 4% interest with the second instalment by July 16, 2024;
• €400 + 4% interest with the third instalment by August 20, 2024;
• €400 + 4% interest with the fourth instalment by September 16, 2024;
• €400 + 4% interest with the fifth instalment by October 16, 2024;
• €400 + 4% interest with the sixth instalment by November 18, 2024 (as November 16 falls on a Saturday, moving the deadline to the next working day);
• €400 + 4% interest with the seventh and final instalment by December 16, 2024.