In Italy, concordato preventivo, pre-emptive agreement, is an official judicial procedure allowing businesses facing a state of crisis (stato di crisi) or insolvency (stato di insolvenza) to avert bankruptcy (fallimento) by entering into a plan for recovery or liquidation with their creditors under the supervision of the judiciary.

Legally formalized in Italy’s Codice della Crisi d’Impresa e dell’Insolvenza (CCII) and before that in the Legge Fallimentare (R.D. 267/1942), concordato preventivo is not just a way of financial restructuring, but it can also be a potential tax-saving strategy if used together with the Agenzia delle Entrate (Italian Revenue Agency), namely with the Concordato Preventivo Biennale (CPB) introduced in 2024.

What Is the Concordato Preventivo?

Concordato preventivo is an insolvency procedure monitored by a court (procedura concorsuale) whereby a company may restructure its debt or dispose of its assets on a controlled basis. It must be filed by the debtor and sanctioned by the majority of creditors admitted to vote.

There are two main forms:

• Concordato in continuità aziendale which is a proposal to allow the company to continue trading, directly or indirectly.
• Concordato liquidatorio which is a procedure intended for orderly liquidation of assets and payment of debts.

Both types must be subject to the par condicio creditorum principle (equal treatment of creditors), although under Italian law, differentiated treatment of classes of creditors may be permitted where justified and stated in the restructuring plan.

Who Can Apply for a Concordato Preventivo?

A concordato preventivo can be requested exclusively by entrepreneurs (imprenditori) engaged in commercial, artisanal, or professional activities who find themselves in a state of financial crisis or insolvency. This includes:

• Individual entrepreneurs
• Limited companies (SRL, SPA, etc.)
• Partnerships
• Professional associations and firms

In order to be eligible, the applicant needs to:

• Be registered in the Business Register (Registro delle Imprese);
• Not meet the definition of an “impresa minore” under the Codice della Crisi (i.e., to be below threshold values for assets, revenues, and debts);
• Not qualify as a public administration or agricultural enterprise (unless differently classified based on commercial criteria);
• Be able to support verifiable financial hardship and possess a feasible restructuring or liquidation plan attested by an independent expert.

In addition, the company should not have filed an earlier concordato application within the last two years which was withdrawn or rejected.

Lastly, the process is designed for firms that are already trading but in difficulty legally, allowing them to control debt proactively while keeping value for creditors and employees.

Legal and Procedural Requirements

In order to apply for a concordato preventivo, a company must:

• Be operating a commercial or professional activity;
• Be in a documented state of financial crisis or insolvency (though not default);
• Submit an official domanda di concordato (application for concordato) to the court.

The submission must include:

• A list of all creditors and notification of respective credits (indicazione dei rispettivi crediti);
• A certified proposta di concordato (proposal), including a feasible recovery or liquidation plan
• The approval by an impartial expert of the veridicità dei dati aziendali,i.e., company data truthfulness, and the fattibilità del piano, i.e.,economic and operational feasibility.

In some cases, the company can submit a concordato in bianco or reserved concordato with minimal documentation submitted and reserving the right to complete it later, within deadlines authorized by the court.

How Does the Voting and Approval Work?

Once the proposal is approved by the court, a commissario giudiziale (judicial commissioner) takes charge of the process. Creditors are classified by legal status and economic interest. Approval is required:

• By a majority of creditors representing the majority of the total admitted claims;
• Or, where there are more than one class, by each class in turn;
• In case of not getting approval, the court may reject the proposal and impose liquidazione giudiziale (judicial liquidation).

Tax Benefits Under the Concordato Preventivo Biennale (CPB)

Beyond the court-mandated restructuring method, the Concordato Preventivo Biennale (Biennial Pre-emptive Tax Agreement) is a budgetary tool established by the D.lgs. 13/2024. It allows eligible taxpayers, typically businesses using the Indici sintetici di affidabilità (ISA) rating system, to pre-agree with the Agenzia delle Entrate on a stable taxable income for two financial years.

Advantages include:

• Predictable tax burden;
• Reduced likelihood of audits;
• Streamlined obligations for reporting and accounting;
• Eligibility for simplified tax assessment procedures.

This fiscal concordato is voluntary but binding once accepted, and it reflects the Italian government’s move toward promoting spontaneous compliance and tax transparency among SMEs and professionals.

Why Choose Concordato Preventivo?

Whether for insolvency prevention or tax planning, the concordato preventivo offers a structured legal framework that helps companies avoid bankruptcy, protect their assets, and reorganize their obligations. It provides flexibility in restructuring operations, time-bound debt relief under court supervision, and the opportunity to maintain business continuity when possible. When applied through the Concordato Preventivo Biennale (CPB), it can also offer favorable tax treatment. However, the process is technically complex, requiring strict documentation, judicial approval, and, most importantly, the trust and cooperation of creditors.

Termination of the Concordato Preventivo

The concordato preventivo does not guarantee indefinite protection. Once approved and homologated by the court, the plan must be executed precisely as proposed. However, the procedure can be terminated in two main ways: resolution (risoluzione) and annulment (annullamento).

• Resolution occurs when the debtor fails to fulfill the obligations outlined in the plan, such as missing payments, failing to liquidate assets, or not providing promised guarantees. In this case, any creditor may petition the court to revoke the agreement and reopen insolvency proceedings.
• Annulment is more serious and happens when it’s discovered that the debtor committed fraud, such as falsifying financial data or concealing assets. If the court finds that the proposal was approved based on deceit, it can void the concordato retroactively.

In both cases, the company may be subject to judicial liquidation (liquidazione giudiziale), and creditors regain the right to enforce their claims individually. Therefore, the termination of a concordato is not just a legal setback; it often marks the transition from recovery to full insolvency.

Do you like what you read? Then, read our related articles here: Dividends: regulations and taxation regime, Italy’s Payroll Service: Choosing the Right Service for Your Small Business and The Italian Company Registration Number and report: What You Need to Know.