Cancellation of Debts up to €1,000

Article 1, paragraphs 222-230, of Law no. 197/2022 provides for the cancellation, as of March 31, 2023, of individual residual debts up to €1,000 entrusted to the Collection Agent between January 1, 2000, and December 31, 2015, by state administrations, tax agencies, and public social security institutions. This “write-off” is automatic, and no request is required from the taxpayer. The calculated amount includes the principal, interest for late registration, and penalties.

Not all types of debts are covered by this measure. Specifically excluded are:

• Recovery of state aid deemed unlawful by the European Union;
• Debts from rulings issued by the Court of Auditors;
• Fines, penalties, and pecuniary sanctions resulting from criminal judgments;
• Debts related to the “traditional own resources” of the European Union and VAT collected on imports.

In cases where the creditor is not one of the three entities mentioned above, only penalties and interest (including late payment interest) are automatically canceled. The principal, costs incurred for enforcement procedures, and notification costs of payment notices remain fully due. However, for fines related to road traffic violations and other administrative sanctions (excluding tax violations or violations of obligations related to contributions and premiums due to social security institutions), only the interest is canceled, while the penalties and costs remain due. These creditors (which, as a reminder, are different from state administrations, tax agencies, and public social security institutions) can choose not to apply the partial cancellation by issuing a specific measure and notifying the Collection Agent by January 31, 2023.

Facilitated Settlement

The facilitated settlement applies to debts entrusted to the Collection Agent from January 1, 2000, to June 30, 2022, even if these debts have already been subject to previous relief measures. The key innovation is that taxpayers may choose to pay only the amount due as the principal, the notification costs of the payment notice, and any enforcement procedure costs. Penalties, registered interest, late payment interest, and additional collection fees are not due. However, for road fines or other administrative sanctions (different from those imposed for tax violations or contribution obligations), the facilitated settlement exempts interest and collection fees only.

Excluded from this measure are debts related to the European Union’s own resources and VAT on imports, recovery of state aid, debts from Court of Auditors’ rulings, and fines, penalties, and sanctions resulting from criminal judgments.

As with the automatic debt write-off, debts related to private law social security institutions can only benefit from the facilitated settlement after a resolution from the creditor institutions, published by January 31, 2023, on their websites and communicated to the Collection Agent through certified email by the same date.

How to Apply

Requests for the facilitated settlement must be submitted exclusively online by April 30, 2023 (extended to May 2 due to a public holiday). The application form must include the identification numbers of the payment notices or warnings, the number of installments (up to 18), the address where the settlement proposal will be sent by June 30, and an email address for the submission receipt.

Applications can also be submitted for debts already included in a “Rottamazione ter” plan, regardless of whether the plan is still active or has lapsed due to missed or late payments.

The amount due for the facilitated settlement can be paid in a lump sum or in up to 18 installments over five years. The first two installments, equal to 10% of the total amount due, must be paid by July 31 and November 30, 2023. The remaining installments, payable over the following four years, will be due on February 28, May 31, July 31, and November 30 of each year starting in 2024. For installment plans, interest at an annual rate of 2% will apply from August 1, 2023.