Observatory › Assessment and tax litigation › Unpaid VAT: does an instalment plan rule out the offence?

Unpaid VAT: does an instalment plan rule out the offence?

Since 29 June 2024, failing to pay declared VAT is not automatically a criminal offence: Article 10-ter of Legislative Decree 74/2000, as replaced by Legislative Decree No. 87 of 14 June 2024, punishes an omission exceeding €250,000 per tax period only if the debt is not being extinguished through a validly requested and duly honoured instalment plan. A liquidity crisis, on its own, is not an automatic excuse: it operates only under the conditions set out in Article 13, paragraph 3-bis.

The punishability threshold and the new deadline

The offence currently in force punishes with imprisonment from six months to two years anyone who fails to pay, by 31 December of the year following the filing of the annual return, the VAT due under that same return for an amount exceeding €250,000 per tax period, where the debt is not being extinguished through an instalment plan under Article 3-bis of Legislative Decree 462/1997. The €75,000 figure that appears in some press summaries is not the punishability threshold: it matters only as the residual debt after forfeiture of the instalment plan, under Article 15-ter of Presidential Decree 602/1973 — if the residual exceeds that amount, punishability is restored. The moment of consummation, moreover, is no longer the December advance payment: it is 31 December of the year following the return.

The instalment plan that rules out the offence

The instalment plan referred to by the rule is the one for amounts due following the automated assessment of the return: up to twenty equal quarterly instalments, with the first instalment due within sixty days of receiving the irregularity notice. The practical consequence is that the criminal-law shelter depends on an act by the tax office: if the notice has not yet arrived, the taxpayer does not have the tool provided by the rule and must consider alternative ways of extinguishing the debt. On the transitional-law question, the Court of Cassation (Third Criminal Section, No. 38438/2025, filed 27 November 2025) held that an instalment plan in progress is an element that rules out the elements of the offence, recognising the retroactive application of the more favourable regime under Article 2, paragraph 4, of the Criminal Code.

Liquidity crisis: when it excludes punishability

Before the reform, the Court of Cassation’s case law — following the Joint Sections’ decision No. 37424/2013 — treated a liquidity crisis as ordinary business risk, holding the offence punishable on the basis of general intent. The new Article 13, paragraph 3-bis, of Legislative Decree 74/2000 now excludes punishability where the failure results from causes not attributable to the offender and arising after the VAT was collected, requiring the court to assess a non-transitory liquidity crisis due to the uncollectibility of receivables from a third party’s established insolvency or over-indebtedness, to unpaid certain and due receivables from public administrations, or to the unavailability of measures suitable for overcoming the crisis. The Court of Cassation (No. 16526/2025) has recognised its retroactive application, but with strict pleading requirements: it is for the defendant to identify the specific elements and to prove that they arose after the VAT was collected.

In practice

The taxpayer, assisted by the professional adviser, must watch three moments.

• Within sixty days — of receiving the irregularity notice, join the instalment plan under Article 3-bis of Legislative Decree 462/1997 and meet every quarterly deadline, aiming to reach 31 December of the following year with the plan current and in order.
• Monitor forfeiture — under Article 15-ter of Presidential Decree 602/1973: minor non-compliance is tolerated (a delay of no more than seven days on the first instalment; a shortfall of no more than 3% and in any case €10,000).
• If criminal proceedings have already started — Article 13, paragraph 1, requires the debt (tax, administrative penalties and interest) to be extinguished in full before the opening of the first-instance trial is declared; if the instalment plan is still in progress, paragraph 3 grants a three-month term for the residual amount, extendable once for a further three months at most, with the limitation period suspended.
• Documents to keep — the irregularity notice and the instalment plan, F24 payment receipts for every instalment, account statements and payment schedules, reminders and recovery actions against debtors, evidence of debtors’ insolvency or of unpaid receivables from public administrations, and minutes of corporate bodies on the measures adopted to address the crisis.

That said, the framework described here has an expiry date: Articles 10-ter and 13 of Legislative Decree 74/2000 are repealed, with effect from 1 January 2027, by Legislative Decree 173/2024 as amended by Decree-Law 200/2025; until 31 December 2026 they remain fully applicable. On the longer VAT-deduction deadline, see the article «VAT deduction: the two-year deadline»; the Firm covers this area in the section on business taxation and in the other articles of the Fiscal Observatory.

Frequently asked questions

Is the punishability threshold €75,000 or €250,000?

€250,000 per tax period. The €75,000 figure matters only as the residual debt after forfeiture of the instalment plan, under Article 15-ter of Presidential Decree 602/1973.

Is a lack of liquidity enough, on its own, to rule out the offence?

No. A cause not attributable to the taxpayer and arising after the VAT was collected is required, with the features set out in Article 13, paragraph 3-bis, of Legislative Decree 74/2000, and the burden of pleading falls on the defendant.

Does the more favourable regime also apply to years before 2024?

Yes: according to the Court of Cassation (No. 38438/2025 and No. 16526/2025), by application of Article 2, paragraph 4, of the Criminal Code, since Legislative Decree 87/2024 did not set out transitional rules.

• Legislative Decree No. 74 of 10 March 2000 (“d.lgs. 74/2000”), Article 10-ter, as replaced by Legislative Decree No. 87 of 14 June 2024 (in force since 29 June 2024).
• Legislative Decree 74/2000, Article 13, paragraphs 1, 3 and 3-bis.
• Legislative Decree No. 462 of 18 December 1997, Article 3-bis (instalment plan for amounts due after automated assessment: up to twenty quarterly instalments, first instalment within sixty days).
• Presidential Decree No. 602 of 29 September 1973, Article 15-ter (forfeiture of the instalment plan and minor non-compliance).
• Legislative Decree No. 87 of 14 June 2024 (Official Gazette No. 150 of 28 June 2024, in force since 29 June 2024).
• Court of Cassation, Joint Criminal Sections, 12 September 2013, No. 37424 (general intent and irrelevance of a liquidity crisis under the previous regime).
• Court of Cassation, No. 16526/2025 (Article 13, paragraph 3-bis: retroactivity and pleading requirements).
• Court of Cassation, Third Criminal Section, No. 38438/2025, filed 27 November 2025 (instalment plan in progress and exclusion of the offence’s elements, retroactive application).
• Legislative Decree No. 173 of 27 November 2024 and Decree-Law 200/2025, converted with amendments by Law 26/2026 (postponement to 1 January 2027 of the repeal of Articles 10-ter and 13 of Legislative Decree 74/2000).