Concordato preventivo biennale (the two-year advance tax agreement): how it works and who benefits

Concordato preventivo biennale (the two-year advance tax agreement): how it works and who benefits

The concordato preventivo biennale allows VAT-registered persons and businesses to agree their taxable income with the tax authorities in advance for two tax periods: once the Agenzia delle Entrate proposal has been accepted, income taxes, IRAP and social security contributions are computed on the agreed income, irrespective of what is actually earned over the two years.

Who may join: taxpayers subject to the ISA reliability indices. The scheme previously open to taxpayers on the regime forfettario (Italian flat-rate scheme) was repealed by Legislative Decree no. 81 of 12 June 2025. Grounds for exclusion remain, among them substantial unsettled tax debts and unfiled returns.

The advantages: certainty as to the tax burden, exclusion from analytical and presumptive assessments and, for those who improve their ISA score, an enhanced rewards regime. Actual income exceeding the agreed figure is not taxed.

The risks: if actual income falls below the agreed figure, tax remains due on the agreed figure; the decision to join must therefore rest on realistic forecasts of turnover and margins.

The deadline: for the 2026-2027 two-year period the election must be completed by Monday 2 November 2026. The firm runs a cost-benefit simulation comparing the Agenzia delle Entrate proposal against the forecast of actual income, before you sign.

What the concordato preventivo biennale is

The concordato preventivo biennale (the two-year advance tax agreement) is governed by Articles 6 to 22 of Legislative Decree no. 13 of 12 February 2024, implementing Article 17 of Law no. 111 of 9 August 2023. The text was rewritten in several respects by Legislative Decree no. 108 of 5 August 2024, by Legislative Decree no. 81 of 12 June 2025, by Article 7-bis of Decree-Law no. 38 of 27 March 2026, converted with amendments by Law no. 88 of 22 May 2026 and, most recently, by Article 28 of Legislative Decree No. 148 of 7 August 2026, whose provisions apply from the 2026-2027 two-year period, that is, precisely the period this guide deals with; the same decree, in Article 29, reserves a substitute tax regime for the 2020 to 2023 tax years to taxpayers who renew their election. Today, anyone reading a guide drafted in 2024 is, for the most part, reading provisions that are no longer in force.

The mechanism is simple in structure and delicate in application. Based on the data declared and on the outcome of the ISA reliability indices, the Agenzia delle Entrate draws up an income proposal for two tax years. The taxpayer accepts or rejects it: no negotiation is allowed. If accepted, the taxpayer declares the agreed amounts for the two-year period and pays direct taxes, IRAP (the regional tax on productive activities) and mandatory social security contributions on those amounts, regardless of what has actually been earned.

The concordato is neither a settlement of past liabilities nor a tax amnesty. It does not close out prior tax years, does not extinguish pending disputes, and does not cover value added tax. Properly understood, it is a collaborative-compliance tool that exchanges certainty over the tax burden for a waiver of taxation on the actual result achieved.

Concordato biennale: how it works, step by step

From the tax return to the proposal

The starting point is the 2025 tax year. The taxpayer completes the ISA form for 2025 and the form for communicating the data relevant to the concordato, approved by Measure of the Director of the Agenzia delle Entrate no. 71684 of 27 February 2026. The calculation is performed using the “Il tuo ISA 2026 CPB” application, made available by 15 May 2026 pursuant to the aforementioned Decree-Law no. 38 of 2026.

The methodology for drawing up the proposal was approved by Decree of the Minister of Economy and Finance of 11 May 2026, published in Ordinary Supplement no. 20 to Official Gazette no. 115 of 20 May 2026. It starts from the income declared for 2025, adjusted pursuant to Articles 15 and 16 of Legislative Decree no. 13 of 2024 — that is, net of capital gains, capital losses, extraordinary income and charges, losses on receivables and partnership income — and compares it with the reliability indicators, with the results of the last three years and with the reference sector profitability. Article 2(3) of the decree specifies that forward-looking revaluations use the macroeconomic projections for gross domestic product growth. It is important to fix this point: the comparison is never made against the raw declared income, but against the adjusted income.

The phase-in rule for 2026

Article 7 of the ministerial decree introduces a rule that has a direct bearing on the amount of the proposal and that must be understood before running any simulation. In order to ensure the gradual attainment of full reliability by the end of the two-year period, the proposal for 2026 takes into account the income declared for 2025 and, to the extent of 50 per cent, the higher income identified through the methodology. The same rule applies to net production value for IRAP purposes.

In practical terms: if the methodology identifies, for 2026, an income higher than that declared for 2025, only half of that increase flows into the proposal for the first year. The reduction applies to all taxpayers, regardless of the ISA score achieved.

The caps on the proposal

On a separate plane operate the limits set by Article 9(3-bis) of Legislative Decree no. 13 of 2024, introduced by Article 14 of Legislative Decree no. 81 of 2025. The proposal cannot exceed the adjusted income declared for the preceding period by more than the following amounts: 10 per cent for an ISA score of 10; 15 per cent for a score equal to or higher than 9 and lower than 10; 25 per cent for a score equal to or higher than 8 and lower than 9. Article 7-bis of Decree-Law no. 38 of 2026 extended the criterion to less reliable taxpayers, who previously had no such cap: 30 per cent for a score equal to or higher than 6 and lower than 8, 35 per cent for a score equal to or higher than 1 and lower than 6.

Paragraph 3-ter, however, contains a clause that must be read carefully: the caps do not apply where the proposal, so contained, would be lower than the sector reference values produced by the ministerial methodology. The cap, in other words, is not an unconditional right to a contained proposal.

The phase-in rule and the caps have different sources — one ministerial, the other legislative — and the decree does not govern the order in which they apply. Both constraints must be respected: in practice, whichever leads to the lower value applies, and the statutory cap operates as an absolute maximum limit, not as the measure of the proposal.

Reductions for suspension of activity

Article 5 of the ministerial decree allows taxpayers to report extraordinary events that occurred in 2026, before joining, which reduce the proposal for that year: 10 per cent if the suspension of activity lasted between thirty and sixty days; 20 per cent if it lasted more than sixty and up to one hundred and twenty days; 30 per cent if it lasted more than one hundred and twenty days. The relevant events are those listed under letters a), b), e) and f) of Article 4 of the decree. This is a possibility that in practice is often overlooked and that deserves a preliminary check.

What exactly is being accepted

Three figures are accepted: business or self-employment income for 2026 and for 2027, and the corresponding net production value for IRAP purposes. Acceptance is total and covers both years: it is not possible to agree on only one year.

Prior tax losses may reduce the agreed income under the ordinary rules of Articles 8 and 84 of the Consolidated Income Tax Act (TUIR). It remains the case, under Article 16(4), that the income subject to taxation cannot be lower than 2,000 euros: the limit concerns the residual taxable amount after losses have been offset, not the proposal itself, and the distinction matters for those with material carry-forward losses. The coordination between the use of losses and the option for the substitute tax must be verified case by case: this is an area where practice has not yet fully settled.

How to join, and with what payments

Joining is finalised electronically, either directly or through an authorised intermediary, by completing the relevant section of the 2026 Redditi tax return form or the stand-alone CPB form. Within the same deadline, withdrawal can also be communicated.

Article 20 of Legislative Decree no. 13 of 2024 imposes a surcharge on the advance payment only for the first tax year of joining, and only if the advance payment is calculated using the historical method: 10 per cent on the positive difference between the agreed income and the adjusted income declared for the preceding period, and 3 per cent on the corresponding difference for IRAP purposes. The surcharge is paid together with the second or single instalment of the advance payment. It is not due for the second year of the two-year period: those joining now will calculate it for 2026 and not for 2027. The Agenzia delle Entrate, in a ruling published on 3 June 2026, has also clarified that it is not due from those who renew for 2026-2027 after the 2024-2025 two-year period without interruption.

Who can join the 2026-2027 concordato preventivo biennale

The access requirement

Taxpayers required to apply the synthetic tax reliability indices (ISA) who actually applied them for the 2025 tax year may join. Those who for 2025 were excluded from the ISA — because of starting or ceasing business activity, an ordinary ground for exclusion, or enrolment in the regime forfetario (Italian flat-rate scheme) — remain outside the scheme.

Article 10(2) adds a debt-regularity condition. Access is barred to those who, as at 31 December 2025, had definitively assessed debts for taxes administered by the Agenzia delle Entrate or social security debts totalling 5,000 euros or more, inclusive of interest and penalties. The condition is remediable: it is enough to pay down the debts to a level that brings the residual amount below the threshold before accepting the proposal. Suspended debts and debts under an instalment plan being regularly honoured do not count towards the calculation.

Grounds for exclusion

Article 11 lists the circumstances that bar access even to those who otherwise meet the requirements. In summary, they are: failure to file the income tax return in at least one of the three preceding tax years, where the obligation to file existed; a conviction, including through patteggiamento (a plea-bargain procedure), for one of the offences under Legislative Decree no. 74 of 10 March 2000, under Article 2621 of the Civil Code or under Articles 648-bis, 648-ter and 648-ter.1 of the Criminal Code, committed in the last three tax years; earning, in the preceding period, income that is wholly or partly exempt, excluded or not counted towards the tax base in a proportion exceeding 40 per cent of business or self-employment income; enrolment in the regime forfetario in the first year of the two-year period; carrying out, in the first year of the two-year period, mergers, demergers or business contributions, or — for the companies and associations referred to in Article 5 of the Consolidated Income Tax Act — changes to the membership structure that increase the number of partners or members.

Where the agreement is renewed, the ground for exclusion linked to an increase in the number of partners or members does not apply if the incoming partner or member, in the preceding year, received employment income or income treated as such (Articles 49 and 50 of the Consolidated Income Tax Act) or earned business or self-employment income not exceeding 35,000 euros in total. The saving clause was inserted into Article 11(1)(b-quater) by Article 28(1)(b)(1.1) of Legislative Decree No. 148 of 7 August 2026, applicable from the 2026-2027 two-year period. Two points call for care, because they are easily confused: the saving clause applies only on renewal, not when opting in for the first time; and the 35,000-euro threshold concerns only the business or self-employment income of the incoming partner, whereas no ceiling is set for employment income and income treated as such.

Legislative Decree no. 81 of 2025 added two mirror-image cases concerning associated self-employment: a professional who is a member of a professional association, a partnership of professionals or a partnership of lawyers is excluded if the entity in which they participate does not join for the same periods; and the entity is excluded if not all the partners or members who individually declare self-employment income join. This is an alignment rule that, in practice at a firm, requires the decision to be taken collectively rather than individually. Points (1.2) and (1.3) of Article 28(1)(b) of Legislative Decree No. 148 of 2026 have, however, appreciably narrowed the scope of both cases: from the 2026-2027 two-year period they apply only where the activities fall within the same synthetic index applied individually by the taxpayer. A professional excluded solely because of participation in an entity to which an index other than their own applies may therefore join the concordato.

Those who already have a concordato in progress

Those with an accepted proposal in place for 2025-2026 cannot join the 2026-2027 two-year period: for them, 2026 is already covered by a concordato, and the first available window will be the one for the 2027-2028 two-year period. Besides those who have never entered into a concordato, those who completed the 2024-2025 two-year period may join.

For the latter, Circular no. 4/E of 6 July 2026 issued by the Agenzia delle Entrate flagged a rather unintuitive effect: for 2025, since the income was already fixed by the concordato, it is not permitted to declare additional positive components in order to improve the ISA score. Those renewing, therefore, enter the new two-year period with the score they have, and that score determines both the cap on the proposal and the substitute tax rate.

Does the concordato pay off for flat-rate taxpayers?

This is one of the most frequently asked questions, and today the answer is unambiguous: taxpayers under the regime forfetario (the Italian flat-rate scheme) cannot join the concordato preventivo biennale. Article 7 of Legislative Decree No. 81 of 12 June 2025 repealed, with effect from 1 January 2025, the entire Chapter III of Title II of Legislative Decree No. 13 of 2024, which contained Articles 23 to 33 — including Article 31-bis — dedicated to the concordato for flat-rate taxpayers.

The scheme had originally been introduced as a pilot for the 2024 tax year alone, and on an annual rather than two-year basis. Those who opted in for 2024 saw its effects exhausted there. From 2025 the concordato reverted to what it had originally been conceived as: an instrument reserved for taxpayers subject to the ISA (tax reliability indices).

A practical consequence follows that deserves to be spelled out. Anyone who applied the regime forfetario in 2025 did not apply the ISA for that period and does not meet the access requirement: they are therefore excluded from the 2026-2027 two-year period as well, even if they have since left the flat-rate scheme from 2026. Conversely, anyone who left the regime forfetario already during 2025 — for example by exceeding the threshold of EUR 100,000 in revenue or fees, which triggers immediate cessation of the scheme — and who therefore applied the ISA for 2025, may consider joining.

What happens if I earn more

The higher actual income is not taken into account for income tax, IRAP (the regional tax on productive activities) and mandatory social security contribution purposes (Article 19(1)). This is the real incentive of the scheme: growth achieved during the two-year period is not taxed.

Three clarifications are needed, however, which are often overlooked.

The first concerns VAT. Article 18 establishes that the concordato has no effect for value added tax purposes, which continues to apply under the ordinary rules to the transactions actually carried out, with all related compliance obligations. A higher volume of business remains entirely relevant for VAT purposes.

The second concerns social security contributions. The law nonetheless allows the taxpayer to pay contributions on actual income, if higher than the agreed income. This is an option, not an obligation, and should be weighed against contribution seniority and the calculation of the future pension.

The third concerns actual income as an external parameter. Article 35(2) provides that, for the purpose of recognising deductions, tax credits or benefits of any kind — including non-tax benefits — that are tied to income requirements, actual income is taken into account rather than agreed income. The same applies for ISEE (the means-tested household income indicator) purposes. Anyone relying on means-tested social benefits gains no advantage on this front.

The imposta sostitutiva (substitute tax) on the higher agreed income

Article 20-bis allows the portion of agreed income that exceeds the actual income declared, as adjusted, for the preceding period to be subjected to a substitute tax for IRPEF (personal income tax), IRES (corporate income tax) and the related surtaxes. The rates depend on the ISA score for the period preceding the two-year period: 10 percent for a score of 8 or higher; 12 percent for a score of 6 or higher but below 8; 15 percent for a score below 6.

Legislative Decree No. 81 of 2025, however, introduced a threshold. On the portion of the excess above EUR 85,000, and only for that portion, the tax remains a substitute tax but is applied at the rate set out in Article 11(1), letter (c), of the testo unico (the Consolidated Income Tax Act) — 43 percent — for IRPEF taxpayers, and at the rate set out in Article 77 of the same testo unico — 24 percent — for IRES taxpayers. This is therefore not a case of the amount being added to total income and taxed under the ordinary rules: the difference matters, because the tax continues to absorb the surtaxes and remains outside the progressive scale. For companies and partnerships, the option is exercised by the entity itself and is binding on the partners/shareholders, who pay their pro-rata share.

What happens if I earn less

This is the point that decides most assessments. If actual income falls below the agreed income, taxes and contributions remain due on the agreed income. Lower actual income is irrelevant in exactly the same way as higher actual income is. There is no adjustment, no refund, and no renegotiation.

A way out linked to a fall in income does exist, but it is narrow. Article 19(2) provides that the concordato ceases to produce effects where exceptional circumstances, identified by ministerial decree, occur that result in lower actual income or lower net production values exceeding 30 percent compared with the agreed figures. The two conditions are cumulative: both the specified circumstance and the above-threshold deviation are required. The separate grounds for cessation and forfeiture set out in Articles 21 and 22 naturally remain unaffected, as Article 4 of the ministerial decree itself makes clear.

The circumstances listed in Article 4 of the decree of 11 May 2026 are exhaustive and must be documented: calamitous events for which a state of emergency was declared under Articles 7(1), letter (c), and 24(1) of Legislative Decree No. 1 of 2 January 2018; other extraordinary events that rendered premises wholly or partly unusable, damaged inventory to the point of suspending the production cycle, prevented access to premises, or led to suspension of the business because the sole or main client ceased operating; ordinary, compulsory administrative or judicial winding-up; leasing out of the taxpayer’s sole business; suspension of business activity notified to the chamber of commerce; suspension of professional practice notified to the professional association, social security bodies or pension funds. For the 2026-2027 two-year period, a letter (g) was added, concerning negative economic impacts linked to armed conflicts and the geopolitical situation in the Middle East, evidenced by an annual increase in the consumer price index for blue-collar and white-collar worker households, net of tobacco products, of more than 5 percent.

It must be said clearly: a simple drop in turnover is not an exceptional circumstance. The loss of market share, shrinking margins, the departure of an operating partner, or a mistaken business decision do not open any way out. The risk lies entirely with the person who joins.

How to exit: cessazione (cessation) and decadenza (forfeiture)

Cessazione (Cessation)

Cessation, governed by Article 21 and Article 19(2), takes effect from the tax year in which the event occurs and leaves the year already closed unaffected. Besides the exceptional circumstances already discussed, the main grounds are: cessation of the business activity; a change in the activity carried out, unless the new code is subject to the same synthetic index; joining the regime forfetario; merger, demerger and business contribution transactions, or changes to the ownership structure that increase the number of members; declaring revenue or fees exceeding the ISA limit increased by 50 percent, that is, above EUR 7,746,853.50. A taxpayer who declares revenue above EUR 5,164,569 without reaching this latter threshold falls outside the ISA regime but remains within the concordato.

The same saving clause applies to cessation: on renewal, changes to the ownership structure do not trigger it if the incoming partner or member, in the preceding year, received employment income or income treated as such, or earned business or self-employment income not exceeding 35,000 euros in total (Article 21(1)(b-ter) of Legislative Decree No. 13 of 2024, as amended by Article 28(1)(f)(1) of Legislative Decree No. 148 of 2026, applicable from the 2026-2027 two-year period). Points (b-quinquies) and (b-sexies) of the same Article 21 were amended symmetrically: the grounds for cessation relating to professional associations, partnerships of professionals and partnerships of lawyers now apply only where the activities fall within the same synthetic index.

Decadenza (Forfeiture)

Forfeiture is something quite different, and more severe: it wipes out both tax years of the two-year period. Article 22, as it stands following Article 28(1)(g) of Legislative Decree No. 148 of 7 August 2026 and applicable from the 2026-2027 two-year period, links it: to the assessment — in the tax years covered by the concordato or in the preceding one — of undeclared assets or of non-existent or non-deductible liabilities in an amount exceeding 30 percent of declared revenue or fees (point (a)); to the presence, established in the tax year preceding those covered by the concordato, of errors or omissions in the data communicated for the purposes of the proposal, such that the income or the net production value calculated on the corrected data exceeds the agreed figures by at least 30 percent (point (b)); to the commission of other violations that are “not of minor significance”, which the decree has made a self-standing ground under point (c); and to failure to pay the amounts due under the concordato (point (e)).

On this last point, the law grants a single opportunity for remedy: payment within sixty days of receiving the irregularity notice referred to in Article 36-bis(3) of Presidential Decree No. 600 of 29 September 1973. Payment must be made in full: paying in instalments does not avoid forfeiture. Ravvedimento (voluntary self-correction) carried out before receiving the notice, on the other hand, excludes it.

The “violations not of minor significance” are specified in paragraph 2: conduct with criminal relevance under Legislative Decree No. 74 of 2000; inaccurate or incomplete communication of ISA data such as to result in a lower agreed income exceeding 30 percent; failure to file income tax, withholding agent, or VAT returns; three or more violations, committed on different days, relating to the recording and transmission of takings; failure to produce documents and records during an on-site inspection; tampering with, or failure to install, electronic recording devices (registratori telematici).

Two situations covered by the previous text are no longer grounds for forfeiture, because the points that contained them have been replaced: an amending or supplementary income tax return resulting in a different quantification from the figures accepted (former point (b)), and the indication in the return of data not matching those communicated (former point (c)). Point (d), which linked forfeiture to the occurrence of one of the situations under Article 11 or to the loss of the requirements under Article 10(2), has moreover been repealed.

If the concordato is forfeited, the amount determined on the higher of agreed income and actual income remains due in any event: the taxpayer loses the benefits but not the obligation. This is the worst possible outcome, and it is the reason why joining should be accompanied by a preliminary check of the formal and substantive regularity of the taxpayer’s position.

Paragraph 3-bis, inserted into Article 19 of Legislative Decree No. 13 of 2024 by Article 28 of Legislative Decree No. 148 of 2026, opens a route that did not exist before: where an amending return under Article 2(8) of Presidential Decree No. 322 of 22 July 1998 removes errors or omissions in the data communicated, the agreed income is recalculated on the corrected data and the related penalties — including the one under Article 8 of Legislative Decree No. 471 of 1997 — may be settled through ravvedimento operoso under Article 13 of Legislative Decree No. 472 of 1997.

Alongside cessation and forfeiture there is, from the 2026-2027 two-year period, a third regime. Article 28(1)(a) and (1)(b)(2) of Legislative Decree No. 148 of 2026 inserted two new provisions into Legislative Decree No. 13 of 2024: Article 10(2-bis), under which opting in without the access requirements is of no effect; and Article 11(1-bis), under which opting in where a ground for exclusion exists is likewise of no effect. This is neither cessation nor forfeiture: it is original ineffectiveness. No act of the Agenzia delle Entrate is needed to declare it, and the protection of the year already closed, which is typical of cessation, does not operate. That is why the requirements and the grounds for exclusion must be checked before opting in, and the check documented.

The benefits of opting in

Article 34 provides that, for taxpayers who opt in, the assessments under Article 39 of Presidential Decree No. 600 of 1973 (d.P.R. n. 600/1973) cannot be carried out — that is, neither the analytical-inductive assessment nor the pure inductive assessment — unless the investigative activity reveals grounds for forfeiture of the agreement. The tax authorities’ investigative powers, VAT assessments, financial investigations and challenges based on other provisions remain, however, fully exercisable.

Article 19(3) also grants all taxpayers who opt in, irrespective of the ISA score achieved, the benefits of the reward regime provided for by Article 9-bis(11) of Decree-Law No. 50 of 24 April 2017 (decreto-legge n. 50/2017), converted into Law No. 96 of 21 June 2017 (legge n. 96/2017): exemption from the certification of conformity (visto di conformità) for offsetting tax credits of up to 70,000 euros a year for VAT and 50,000 euros for direct taxes and IRAP; exemption from the certification or the guarantee for VAT refunds of up to 70,000 euros a year; exclusion from the rules on non-operating companies (società non operative) under Article 30 of Law No. 724 of 23 December 1994 (legge n. 724/1994); exclusion of assessments based on simple presumptions; a reduction of at least one year in the statute-of-limitations deadlines for assessment; exclusion of the standard-of-living-based assessment (accertamento sintetico), provided the total assessable income does not exceed the declared income by more than two-thirds.

Where the agreement is renewed, Article 14(1-bis) of Legislative Decree No. 13 of 2024 — inserted by Article 28(1)(c) of Legislative Decree No. 148 of 7 August 2026 (d.lgs. n. 148/2026), applicable from the 2026-2027 two-year period — raises three of those benefits: the exemption from the certification of conformity for offsetting tax credits rises to 100,000 euros a year for VAT and to 70,000 euros for direct taxes and IRAP; the exemption from the certification or the guarantee for VAT refunds rises to 100,000 euros a year; and the reduction in the statute-of-limitations deadlines for assessment becomes a shortening of two years rather than one. A taxpayer renewing for 2026-2027 therefore applies the higher thresholds, while a taxpayer opting in for the first time remains subject to the ordinary thresholds of Article 19(3).

Paragraph 2 of Article 34 completes the picture from the opposite side: towards those who do not opt in, or who forfeit the agreement, the Agenzia delle Entrate and the Guardia di Finanza plan a stepping-up of control activity, drawing on all available databases, including the register of financial relationships (anagrafe dei rapporti finanziari). This is a piece of background information to be taken note of, not an argument in favour of opting in.

In practice: the cost-benefit reasoning

The assessment is built on three comparisons, in order. One premise holds for all the examples that follow: the benchmark is never the raw declared income, but the income adjusted under Articles 15 and 16, and the proposals indicated are those already worked out by the Agenzia delle Entrate, and therefore already include the phase-in mechanism under Article 7 of the ministerial decree.

First comparison: the proposal against the forecast. The proposed income is set alongside a reasoned forecast of income for 2026 and 2027, built on the order book, multi-year contracts, the trend of the first months, planned investment and already-known staff departures. Not on a straight-line projection of 2025.

Second comparison: the tax cost of the two alternatives. Consider a sole proprietorship under the simplified accounting regime (contabilità semplificata) with adjusted 2025 income of 60,000 euros and an ISA score of 8.5, offered a proposed income of 72,000 euros for 2026. The statutory cap is respected: for a score between 8 and 9 the increase cannot exceed 25 percent, i.e. 75,000 euros. The agreed excess is 12,000 euros.

Opting for the 10 percent substitute tax (imposta sostitutiva), 1,200 euros is paid on that 12,000 euros. Without the option, the same 12,000 euros falls entirely above the 50,000-euro threshold and is taxed at the 43 percent marginal IRPEF rate — the 2026 brackets are 23 percent up to 28,000 euros, 33 percent from 28,000 to 50,000 euros, 43 percent above that — equal to 5,160 euros. The comparison understates the gap: to that 5,160 euros must be added the regional and municipal surtaxes (addizionali), which the substitute tax instead absorbs, and which depending on tax domicile can amount to a few hundred euros. Social security contributions, note, remain based on 72,000 euros in both scenarios: the substitute tax has no effect on the contribution base.

Third comparison: the cost of a forecasting error. The same taxpayer, with an agreed income of 72,000 euros, closes 2026 with actual income of 45,000 euros. The IRPEF due on the agreed income is 23,160 euros (6,440 plus 7,260 plus 9,460 across the three brackets); the amount that would have been due on the actual income is 12,050 euros (6,440 plus 5,610). The additional burden is 11,110 euros of IRPEF alone, to which must be added the surtaxes, IRAP if due, and contributions, also calculated on 72,000 euros. The gap is 37.5 percent, and therefore exceeds the 30 percent threshold set by Article 19(2), but termination of the agreement does not apply if the fall is not attributable to one of the exceptional circumstances defined by law (circostanze eccezionali tipizzate).

How the phase-in and the cap work together. A professional with an ISA score of 5.2 and adjusted 2025 income of 40,000 euros receives a proposal built as follows. If the methodology identifies income of 62,000 euros for 2026, the additional income is 22,000 euros: under Article 7 of the ministerial decree only half of it counts, i.e. 11,000 euros, and the proposal is 51,000 euros. The 35 percent cap set for scores below 6 would allow up to 54,000 euros, so in this case it does not bite. On the 11,000-euro excess, the 15 percent substitute tax comes to 1,650 euros, against 3,730 euros of ordinary IRPEF (3,300 euros on the 10,000 euros between 40,000 and 50,000 at 33 percent, 430 euros on the 1,000 euros in excess at 43 percent), plus surtaxes.

If, instead, the methodology identified 100,000 euros, the additional income would be 60,000 euros and the phase-in mechanism would bring it to 70,000 euros: here the statutory cap would step in, bringing the proposal back down to 54,000 euros. This is the case in which the limit set by Article 9(3-bis) performs its function. It remains the case that in both scenarios the contribution base rises to the agreed level.

When the concordato is not worthwhile

There are situations in which opting in is, for the taxpayer, an unfavourable choice. They are worth listing without qualification.

When 2025 was an unusually good year. An extraordinary order, a year of exceptional margins, a recovery of receivables: the proposal starts from there and projects over two years a level of profitability that cannot be repeated.

When a contraction is already planned. The announced loss of a main client, the expiry of a multi-year contract that has not been renewed, the departure of a key associate, a competitor opening up. These are foreseeable events that do not qualify as exceptional circumstances and therefore remain entirely at the expense of the taxpayer who has opted in.

When significant investment is under way. Rising depreciation, financial charges, start-up costs for a new line of business: actual income falls while the agreed income stays fixed. It should also be considered that Decree-Law No. 38 of 2026 (d.l. n. 38/2026) has made the increased depreciation allowances and leasing instalments granted under the 2026 Budget Law irrelevant for the purposes of the agreed income, with a corresponding adjustment to the agreed income.

When the tax position is not fully in order. Returns omitted over the three-year period, definitively assessed debts close to the threshold, pending disputes over electronic transmission of receipts, ISA data filled in carelessly: the risk of retroactive forfeiture over the whole two-year period is concrete, and the outcome is worse than not opting in at all.

When the actual income-based requirements matter. Anyone claiming means-tested social benefits, bonuses or deductions calibrated to income must remember that Article 35(2) still requires reference to actual income.

When the activity is inherently irregular. Professions tied to court appointments or public contracts, seasonal activities exposed to weather, cyclical sectors: the volatility is structural, and the concordato turns it into tax risk.

The 2020-2023 substitute tax for those who renew

For taxpayers who renew, Legislative Decree No. 148 of 7 August 2026 introduced, in Article 29, a regime that for many is the very economic reason for renewing, and that must be assessed before 2 November 2026, because it presupposes a timely renewal. Taxpayers subject to the ISA who renew their opt-in for the 2026-2027 two-year period within the statutory deadline may subject the tax years from 2020 to 2023 to a substitute tax in place of income taxes and IRAP.

The tax base is not the income declared but the increase in that income: the difference between the business or self-employment income already declared for each year and the same income increased by a percentage that depends on the ISA score for that year. A corresponding criterion applies to the net production value for IRAP purposes.

The rates in the third column are those set by paragraph 4 for the 2022 and 2023 tax years; for 2020 and 2021 the same rates apply, reduced by 30 percent, on account of the COVID-19 pandemic. The IRAP rate is 3.9 percent in all cases, applied to the corresponding increase in the net production value. In no case may the substitute tax be less than 1,000 euros for each year.

A separate criterion applies to years in which the taxpayer did not apply the ISA because of one of the specified causes — a COVID-19 related ground of exclusion, the activity not having been carried on normally, or the carrying out of two or more activities not falling within the same index where the non-prevailing activities account for more than 30 percent — and only for taxpayers with revenue or fees not exceeding 5,164,569 euros who do not determine their income on a flat-rate basis: the increase is set at 25 percent, the rate on income at 12.5 percent and the IRAP rate at 3.9 percent, the whole reduced by 30 percent except where the applicable cause is precisely the carrying out of several activities beyond the 30 percent threshold.

Payment is made in a single instalment between 1 January and 15 March 2027, or in up to ten equal monthly instalments, with interest at the statutory rate from 16 March 2027. Where payment is made in instalments, the option is completed, for each year, only once all the instalments have been paid.

The effect is that the adjustments under Article 39 of Presidential Decree No. 600 of 1973 and Article 54, second paragraph, second sentence, of Presidential Decree No. 633 of 1972 are barred for the years settled. The regime is not completed if payment follows service of an audit report (processo verbale di constatazione), of a draft assessment notice under Article 6-bis of Law No. 212 of 2000, or of a notice recovering non-existent tax credits; and the bar ceases to apply in the event of forfeiture of the concordato, of precautionary measures or committal for trial for one of the offences under Legislative Decree No. 74 of 2000, subject to the exceptions set out in the provision, of forfeiture of the right to pay in instalments, or of an untrue declaration as to the causes justifying the regime for the atypical years.

One effect must be pointed out to the client before the decision is taken, because it arises from the renewal alone, even where the taxpayer does not take up the settlement of the earlier years: for those who renew, the statute-of-limitations deadlines for assessment falling due on 31 December 2026 are extended to 31 December 2027. For the years actually settled, the deadlines are instead extended to 31 December 2029.

The terms and procedures for notifying the option are left to a measure of the Director of the Agenzia delle Entrate which, at the date on which this guide was updated, has not yet been issued. Whether the regime is worthwhile depends on the ISA score for each year, on the amount of the income declared and on the assessment risk actually present: it must be calculated year by year, on real figures, and not estimated in the abstract.

Deadlines and formalities

For taxpayers whose tax period coincides with the calendar year, opting in to the 2026-2027 two-year period must be notified by 31 October 2026, a deadline postponed from 30 September by Article 7-bis of Decree-Law No. 38 of 2026 (d.l. n. 38/2026), converted into Law No. 88 of 2026 (legge n. 88/2026), and aligned with the deadline for filing the income tax return. Since 31 October 2026 falls on a Saturday, under Article 7(2)(l) of Decree-Law No. 70 of 13 May 2011 (decreto-legge n. 70/2011), converted into Law No. 106 of 12 July 2011 (legge n. 106/2011) — under which payments and formalities, including purely electronic ones, that fall due on a Saturday or public holiday are always postponed to the next working day — the deadline is Monday 2 November 2026. For taxpayers with a non-calendar tax year, the deadline is the last day of the tenth month following the close of the tax period.

Any withdrawal must be notified by the same deadline. The increase on the advance payment, due only for 2026, is paid with the second or single instalment according to the ordinary deadlines; taxpayers who renew are not required to pay it, by virtue of paragraph 3-bis inserted into Article 20 of Legislative Decree No. 13 of 2024 by Article 28 of Legislative Decree No. 148 of 2026, applicable from the 2026-2027 two-year period. Also for those who renew, and for the same two-year period, no interest is due on tax payments made in instalments under Article 20 of Legislative Decree No. 241 of 9 July 1997 (Article 14(1-ter) of Legislative Decree No. 13 of 2024).

What to do now

For anyone who wants to decide with full knowledge of the facts, the path is as follows.

By the end of August: verification of the requirements under Article 10 and the grounds for exclusion under Article 11, with a statement of tax debts and payment position updated to 31 December 2025, and a check of the tax returns for the 2023-2025 three-year period.

By mid-September: preparation of the 2025 ISA return and acquisition of the proposal through the Agenzia delle Entrate’s software application; at the same time, drafting of the 2026-2027 economic forecast based on company data, not on automatic projections. At this stage it should also be checked whether any extraordinary events have occurred in 2026 that would allow the proposal to be reduced under Article 5 of the ministerial decree.

By mid-October: a comparative simulation between ordinary taxation and the concordato, with and without the option for the substitute tax, including the effect on contributions, the surtaxes and the impact on the advance payment; if the debt position requires it, settlement of debts below the 5,000-euro threshold.

By 2 November 2026: decision and electronic filing.

In any case, it is worth keeping, in case of a future audit, the documentation behind the income forecast, printouts of the proposal and of the data transmitted, receipts for the settlement of debts and — should relevant events occur during the year — any documentary evidence of the exceptional circumstances.

The assessments in this guide are of a general nature and do not replace an examination of the individual case. The firm carries out the cost-benefit simulation by comparing the Agenzia delle Entrate’s proposal with a forecast of actual income, and sets out in writing the assumptions on which the forecast is based. It should be noted, however, that no simulation removes the underlying risk of the mechanism: the concordato is a two-year commitment to fixed figures, and the margin for error falls on the taxpayer.

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