New Tax Collection Regulations: 120 Installments Starting January 1, 2025
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New Tax Collection Reforms: Extended Installment Plans
During the Telefisco 2024 event on September 19, the Italian Revenue Agency confirmed that starting from January 1, 2025, taxpayers will have the option to extend their tax payment plans for outstanding debts up to 120 installments.
However, the implementation of this significant change awaits a decree from the Ministry of Economy and Finance.
A key issue among the uncertainties surrounding fiscal reforms has been the potential to break down tax bills into as many as 120 monthly payments.
This new decree is expected to clarify the operational aspects of the extended payment plan and set forth criteria to gauge the economic hardship faced by debtors.
Despite the delays, the Revenue Agency assures that the new installment regulations will be enforced starting from January 2025.
These adjustments are not limited to extended payment terms; they also include automatic cancellation of uncollected debts after five years.
What Changes with the Reforms?
The main goal of the upcoming tax reforms is to enhance the efficiency of the tax collection system.
Currently, the State is dealing with overdue credits exceeding 1,200 billion euros, with recoverable amounts likely much lower.
The new decree plans to increase the maximum payment installment period from 72 to a proposed 120.
This applies to debts not exceeding 120,000 euros, while higher amounts will necessitate proof of economic hardship.
Starting in 2025, taxpayers facing financial difficulties will benefit not only from longer payment plans but also from a systematic “discharge” process for uncollected debts, significantly easing their financial burden.
Progressive Implementation of 120 Installments
According to plans, the transition to longer installment schemes will be gradual, allowing:
- Up to 84 installments in 2025 and 2026;
- 96 installments in 2027 and 2028;
- 108 installments for requests from 2029;
- 120 installments from 2031 onwards.
The aim is to ensure that starting a payment plan with 120 installments immediately doesn’t jeopardize public finances.
Automatic Discharge of Debts After Five Years
Another notable change will see the automatic discharge of tax bills that have gone uncollected for five years.
In these cases, the Revenue Agency will return these bills to the imposing entity, which may then decide whether to pursue further recovery.
This approach allows the tax authority to focus resources on collectible debts, maximizing efficiency and minimizing waste.
Changes to Debt Collection Practices
In July, government plans to allow the transfer of unrecovered debts to private firms for collection were rejected.
Instead, the revised policy prohibits such actions, ensuring that the authority alone deals with uncollected debts.
This is aimed at preventing further complications in the collection process.
Streamlined Notification Process
Additionally, beginning in 2025, tax bills will need to be notified within nine months of being assigned to the collection agency.
It will also be possible to consolidate various debts against the same taxpayer into a single tax bill, simplifying the payment process and easing financial burdens.
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