What happens if you file a tax return within 90 days from its deadline? Late returns are valid with no prejudice to the application of penalties.
Tax return filed within ninety days of the deadline are deemed valid. This is without prejudice to applying administrative sanctions for delay (art. 2 paragraph 7 of Presidential Decree no. 322/98). Therefore, once 90 days have passed from the deadline, the return is then omitted.
This means that if you have forgotten to submit a personal income tax return or VAT within its deadline, you still have a chance to submit it within 90 days.Let’s see, below, all the helpful information about the late declaration.
Who can submit a late declaration?
By choice or by mistake, taxpayers who have not submitted their personal income tax return, corporate tax return, IRAP return, or VAT return by the due date may submit a late declaration. Such as:
- Natural persons, both VAT, and non-VAT holders
- Companies: partnerships, corporations, professional firms, and trust companies, cooperatives
- Non-commercial entities
- State Administrations.
Tax return filed within 90 days
The late filing is punished with a fixed penalty from 250 to 1,000 euros (C.M. 25.1.99 n. 23, cap. I, § 1.2) reduced by 90% if the fine is self assessed and paid before the tax office prompts any investigation.
Article 1 of Legislative Decree no. 471/97 envisages this sanction for the different cases in which, despite the omitted declaration, no taxes are due.
Failure to pay taxes is also fined, to the extent of 15% to 30 % according to Article 13 of Legislative Decree no. 471/97 (Circ. Agenzia Delle Entrate 12.10.2016 no. 42); however, the taxpayer can self assess and pay its fines reducing them to 5% or less.
Tax return filed within the deadline for the following tax return
If the tax returns is filed within the deadline for sending the statement for the following tax period and in any case before the start of a tax audit, the penalty is halved. It thus reduced from 120% to 60% of any tax due, with a minimum of € 200 (Article 1 paragraph 1 and 5 co. 1 of Legislative Decree n 471/97 post-Legislative Decree n 158/2015).
If no taxes are due, the penalty is from 150 euros to 500 euros for the personal tax return and the IRAP returns and from 150 euros to 1,000 euros for the VAT returns.
Although, according to Article 13, paragraph 1, letter c) of the Legislative Decree no. 472/97, the taxpayer is allowed to make an amicable settlement only within ninety days from the breach, it may sometimes be appropriate to submit the return after 90 days. This is because the taxpayer could benefit from the halving of the sanctions and the non-punishment for the crime of omitted declaration (see Article 13 of the Legislative Decree no. 74/2000).
The halving of penalties operates if no tax control has been initiated. While for the cause of non-punishability, it is necessary both the payment of taxes and the absence of rules, even of a criminal nature.
Recovery of the late declaration
The most frequent case of repayment of a declaration concerns the submission of a so-called late statement.
If the declaration omitted at the ordinary deadline is submitted within 90 days of the standard deadline, it is valid for all purposes (Circular no. 11/E/2010). After the 90-day deadline, the declaration inevitably remains omitted.
There is a meager cost to complying with a late declaration submitted within 90 days.
In particular, we may be faced with two particular cases:
- Late declaration without taxes due – Letter c) of paragraph 1 of Article 13 of Legislative Decree 472/1997. provides that in this case, the sanction is reduced to 1/10 of the minimum. In practice, if there are no taxes due, the penalty is reduced to € 25 (tax code “8911”), since the full penalty is € 258;
- Late declaration with taxes due – In case of a statement submitted within 90 days with taxes owed, it is necessary to adjust the payments not made. Therefore, in addition to the reduced penalty of €. 25 (tax code “8911”), a reduced fine of 0.2% must be applied for each day of delay up to the 14th day; 3% if the regularisation takes place within 30 days after the due date (1/10 of 30%); 3.75% (1/8 of the 30% penalty), if the regularisation takes place after this deadline.
Consequences of late returns
If the tax return is filed with a delay of 90 days or more, or if the other hypotheses that render the statement as “omitted” (declaration submitted on non-compliant forms, not signed by the taxpayer, etc.) are found.
In this case, an administrative sanction is applied, ranging from 120% to 240% of the taxes due, with a minimum of €250.00. This is the penalty applicable for the “omitted declaration.”
If the taxpayer within the deadline presents the omitted declaration for submitting the statement for the subsequent tax period and, in any case, before the start of any administrative assessment activities of which he has had formal knowledge, an administrative sanction of between sixty and one hundred and twenty percent of the amount of taxes due is applied, with a minimum of €200. If no taxes are due, a sanction of between €150 and €500 is used.
Penalties are doubled in the case of omitted rental income from residential property. Furthermore, the sanction can be increased up to double in the case of persons obliged to keep accounting records, and there is a specific increase of 1/3 for sanctions calculated on income produced abroad.
This type of sanctions will be imputed the Inland Revenue Service when it carries out an inductive assessment against the taxpayer.
If, on the other hand, no taxes are due and the Agency does not deem it necessary to carry out an assessment and/or does not adjust the declared income, an administrative fine ranging from €250 to €1,000 is due.
In practice, the possibility of being faced with a late declaration is widespread.
In recent years, the legislator has been changing the due dates for submitting the various tax forms. This aspect may contribute to confusion.
For this reason, if you have realized that you have run into this case, you must remember to use the “ravvedimento operoso” to calculate and pay the reduced penalty of € 25.00. Together with the payment of the fine, the tax return can be submitted.
If, on the other hand, you have agreed to forget after the expiry of 90 days, you are faced with a case of omitted declaration, and in this case, the consequences against you are certainly more significant. This is because, even if you present the statement, it “remains omitted” for the financial administration. This determines methods of assessment of the income indicated much more invasive (inductive assessment).