Made by M.C.
Biennial Preventive Agreement: is it really worth joining?
Apr 15, 2024 | Tax News The Biennial Composition with Creditors is a new tool aimed at encouraging spontaneous compliance by smaller taxpayers. This is an innovative strategy for businesses that allows you to plan in advance the taxes to be paid to the tax authorities, with the arduous task of drastically reducing tax evasion. By accepting the agreement, the taxpayer knows his tax situation in advance and can plan his payments with greater "serenity". But is it really worth it? In this article you will discover how this revolutionary tool works and we will help you understand if joining is really the winning move. Mini Guide Biennial preventive agreement · Agreed biennial estimate: what is it? ·How does it work? ·Subjects admitted to the agreement ·Subjects not admitted to the agreement ·Termination of the agreement ·Advantages and disadvantages of the biennial preventive agreement ·FAQ Biennial composition with creditors: the answers to your questions ·Is it worth joining or not? Biennial composition with creditors: what is it? In Italy, over 4 million taxpayers evade approximately 41.5 billion in taxes. After various initiatives such as amnesties, scrapping and tax amnesties, the Meloni government's latest move to increase revenue and reduce tax evasion is the introduction of the biennial preventive agreement. The Government's objective, in fact, is to recover as much revenue as possible and invite companies to spontaneously join this new tax initiative. Specifically, the agreement provides for establishing an agreement between the parties on the amount of taxes (Irpef and Ires) to be paid for two years, without considering the income produced. How does it work? While waiting for the implementing decree, we can say that the agreement, to date, is structured as follows: · the Revenue Agency estimates the company's taxable income based on the data in its possession and the ISA models (Synthetic Reliability Indices); ·the Revenue Agency proposes an agreement. To give an example, the AdE estimates that your company has a taxable income of €80,000 instead of, perhaps, the €45,000 you declare today. If you accept the agreement, if your company generates an income of €120,000 in the next two years, you will only pay taxes on the taxable amount estimated by the AdE, i.e. €80,000. On the surface, it would seem like an excellent opportunity to pay less taxes, but in reality it is not (and you will understand why later). Subjects admitted to the agreement The composition with creditors is aimed at smaller companies and in particular: ·self-employed; · partnership (sas or snc); · and joint-stock companies (srl or spa). Initially it was thought that only the company that, over time, had demonstrated reliability in paying taxes (to be clear, those with an ISA greater than 8) would join the composition with creditors. Now, however, the Government, with the defined version of the agreement, has decided to eliminate this requirement. From today, in fact, all companies can access the agreement, regardless of the "grade on the report card". The person who wants to access the agreement must do so by 15 October 2024: the deadline for electronically sending the tax return and joining the agreement. Subjects not admitted to the agreement However, taxpayers who: · have social security or tax debts exceeding €5,000 (except for those who have an installment payment or suspension provision in question); have not submitted a tax return in the last three years of application of the agreement; have been convicted - in the three years of application of the agreement - for crimes of money laundering, self- laundering and false corporate communications. Request your first free consultation Termination of the agreement The preventive agreement is valid for two years, provided that everything complies with the established regulations. On the contrary, the agreement can cease or lapse earlier if you commit misconduct. Cease: when the company changes the activity carried out in the two-year period of membership compared to that carried out in the two years preceding the agreement ·or when the business closes. Decade: when the tax returns are modified and, consequently, also the value of production and the income established in the agreement ·or when the declaration has errors that exceed the permitted limit of 30%. Therefore, nothing is forever; as such, the agreement is missing.Advantages and disadvantages of the two-year composition with creditors
Like all other innovative tools made available to the State, the concordat also has its advantages and disadvantages:
· taxes blocked for two years - if your company has higher income than declared, it will not be subject to taxation on
the excess sums. On the other hand, there will be no reduction even in the case of a lower actual income.
Now focus on the last part of the speech "there will be no reduction even in the case of a lower actual income" and ask
yourself this question:
What happens in this case?
If you invoice less, you find yourself paying more taxes. Here's the answer. Furthermore, a minimal mistake could
make you lose everything, and perhaps pay old and new taxes. Why risk it?
·no tax assessments for two years – if you accept, your business benefits from bureaucratic simplifications, exemptions
from ordinary assessments and more generous limits for compensation and reimbursements.
Therefore, you will not be subjected to assessments, but if you behave well, you pay the taxes, but the right ones
without eroding all your liquidity, why should you be afraid of a tax assessment?
· error allowed on the declaration up to 30% - if you make mistakes, such as undeclared or non-existent activities, you
will be forgiven 30% of what is presented to the AdE.
Basically, if you make an error of 0.6%, which translates to 30.6% you are out of agreement. Why risk it if the
possibility of paying the right amount of taxes exists?
FAQ Biennial preventive agreement: the answers to your questions
What does the two-year agreement provide?
The biennial composition with creditors is a tax procedure that allows companies to define in advance, for the 2024
and 2025 tax periods, their taxable base for the purposes of income taxes to be paid.
How does the tax agreement work?
The taxpayer and the Revenue Agency define their debt position in advance based on the income from the same
product over the years.
Who are the subjects admitted to the agreement?
All taxpayers carrying out business, arts or professions who apply the Synthetic Reliability Indices (ISA) are eligible.
Is it worth joining or not?
Using the concordat apparently simplifies the tax landscape. However, maintaining agreed income commitments is
crucial to avoiding forfeiture. Among other things, if you have a different income, for example less in the following
year, you risk paying more, without the possibility of requesting a modification to the agreement.
But not only that, because although it transforms the tax approach from punitive to cooperative and preventive, it
presents many dangers, which multiply, especially if there is the possibility of "freezing forever" the taxation of your
company.
And how is all this possible?
Thanks to the use of certain tax planning strategies – totally legal and in compliance with the Italian tax system –
aimed at reducing taxes.
As First Consulting, thanks to our team of professionals, including chartered accountants, lawyers and tax experts, we
can help you:
·implement strategic tax planning to reduce the tax burden from 20% to 70%;
·protect company assets to protect one's wealth from possible creditors (which can be suppliers, banks and above all
tax authorities);
· achieve exponential growth, through the same tools that we used to create from scratch and in just 5 years, a business
group with a turnover of over 25 million and which we listed on the Milan stock exchange.
© First Consulting S.r.l.
Made by MC
© First Consulting S.r.l.
Biennial Preventive
Agreement: is it really
worth joining?
Apr 15, 2024 | Tax News The Biennial Composition with Creditors is a new tool aimed at encouraging spontaneous compliance by smaller taxpayers. This is an innovative strategy for businesses that allows you to plan in advance the taxes to be paid to the tax authorities, with the arduous task of drastically reducing tax evasion. By accepting the agreement, the taxpayer knows his tax situation in advance and can plan his payments with greater "serenity". But is it really worth it? In this article you will discover how this revolutionary tool works and we will help you understand if joining is really the winning move. Mini Guide Biennial preventive agreement · Agreed biennial estimate: what is it? ·How does it work? ·Subjects admitted to the agreement ·Subjects not admitted to the agreement ·Termination of the agreement ·Advantages and disadvantages of the biennial preventive agreement ·FAQ Biennial composition with creditors: the answers to your questions ·Is it worth joining or not? Biennial composition with creditors: what is it? In Italy, over 4 million taxpayers evade approximately 41.5 billion in taxes. After various initiatives such as amnesties, scrapping and tax amnesties, the Meloni government's latest move to increase revenue and reduce tax evasion is the introduction of the biennial preventive agreement. The Government's objective, in fact, is to recover as much revenue as possible and invite companies to spontaneously join this new tax initiative. Specifically, the agreement provides for establishing an agreement between the parties on the amount of taxes (Irpef and Ires) to be paid for two years, without considering the income produced. How does it work? While waiting for the implementing decree, we can say that the agreement, to date, is structured as follows: · the Revenue Agency estimates the company's taxable income based on the data in its possession and the ISA models (Synthetic Reliability Indices); ·the Revenue Agency proposes an agreement. To give an example, the AdE estimates that your company has a taxable income of €80,000 instead of, perhaps, the €45,000 you declare today. If you accept the agreement, if your company generates an income of €120,000 in the next two years, you will only pay taxes on the taxable amount estimated by the AdE, i.e. €80,000. On the surface, it would seem like an excellent opportunity to pay less taxes, but in reality it is not (and you will understand why later). Subjects admitted to the agreement The composition with creditors is aimed at smaller companies and in particular: ·self-employed; · partnership (sas or snc); · and joint-stock companies (srl or spa). Initially it was thought that only the company that, over time, had demonstrated reliability in paying taxes (to be clear, those with an ISA greater than 8) would join the composition with creditors. Now, however, the Government, with the defined version of the agreement, has decided to eliminate this requirement. From today, in fact, all companies can access the agreement, regardless of the "grade on the report card". The person who wants to access the agreement must do so by 15 October 2024: the deadline for electronically sending the tax return and joining the agreement. Subjects not admitted to the agreement However, taxpayers who: · have social security or tax debts exceeding €5,000 (except for those who have an installment payment or suspension provision in question); have not submitted a tax return in the last three years of application of the agreement; have been convicted - in the three years of application of the agreement - for crimes of money laundering, self-laundering and false corporate communications. Request your first free consultation Termination of the agreement The preventive agreement is valid for two years, provided that everything complies with the established regulations. On the contrary, the agreement can cease or lapse earlier if you commit misconduct. Cease: when the company changes the activity carried out in the two-year period of membership compared to that carried out in the two years preceding the agreement ·or when the business closes. Decade: when the tax returns are modified and, consequently, also the value of production and the income established in the agreement ·or when the declaration has errors that exceed the permitted limit of 30%. Therefore, nothing is forever; as such, the agreement is missing.Advantages and disadvantages of the two-
year composition with creditors
Like all other innovative tools made
available to the State, the concordat also
has its advantages and disadvantages:
· taxes blocked for two years - if your
company has higher income than
declared, it will not be subject to taxation
on the excess sums. On the other hand,
there will be no reduction even in the case
of a lower actual income.
Now focus on the last part of the speech
"there will be no reduction even in the
case of a lower actual income" and ask
yourself this question:
What happens in this case?
If you invoice less, you find yourself
paying more taxes. Here's the answer.
Furthermore, a minimal mistake could
make you lose everything, and perhaps
pay old and new taxes. Why risk it?
·no tax assessments for two years – if you
accept, your business benefits from
bureaucratic simplifications, exemptions
from ordinary assessments and more
generous limits for compensation and
reimbursements.
Therefore, you will not be subjected to
assessments, but if you behave well, you
pay the taxes, but the right ones without
eroding all your liquidity, why should you
be afraid of a tax assessment?
· error allowed on the declaration up to
30% - if you make mistakes, such as
undeclared or non-existent activities, you
will be forgiven 30% of what is presented
to the AdE.
Basically, if you make an error of 0.6%,
which translates to 30.6% you are out of
agreement. Why risk it if the possibility of
paying the right amount of taxes exists?
FAQ Biennial preventive agreement: the
answers to your questions
What does the two-year agreement
provide?
The biennial composition with creditors is
a tax procedure that allows companies to
define in advance, for the 2024 and 2025
tax periods, their taxable base for the
purposes of income taxes to be paid.
How does the tax agreement work?
The taxpayer and the Revenue Agency
define their debt position in advance
based on the income from the same
product over the years.
Who are the subjects admitted to the
agreement?
All taxpayers carrying out business, arts
or professions who apply the Synthetic
Reliability Indices (ISA) are eligible.
Is it worth joining or not?
Using the concordat apparently simplifies
the tax landscape. However, maintaining
agreed income commitments is crucial to
avoiding forfeiture. Among other things,
if you have a different income, for
example less in the following year, you
risk paying more, without the possibility
of requesting a modification to the
agreement.
But not only that, because although it
transforms the tax approach from
punitive to cooperative and preventive, it
presents many dangers, which multiply,
especially if there is the possibility of
"freezing forever" the taxation of your
company.
And how is all this possible?
Thanks to the use of certain tax planning
strategies – totally legal and in
compliance with the Italian tax system –
aimed at reducing taxes.
As First Consulting, thanks to our team of
professionals, including chartered
accountants, lawyers and tax experts, we
can help you:
·implement strategic tax planning to
reduce the tax burden from 20% to 70%;
·protect company assets to protect one's
wealth from possible creditors (which can
be suppliers, banks and above all tax
authorities);
· achieve exponential growth, through the
same tools that we used to create from
scratch and in just 5 years, a business
group with a turnover of over 25 million
and which we listed on the Milan stock
exchange.
