Tax Debt Restructuring in Rome
Tax settlements and insolvency proceedings.
In Brief
Tax debt restructuring in Rome: agreements with the tax authorities, tax settlements, insolvency proceedings. Marzo Associati.
Business Insolvency Management
We support businesses in financial difficulty through the tools provided by the Business Insolvency Code, with a specific focus on renegotiating tax debt.
Tax Settlement:
Negotiations with the Italian Revenue Agency (Agenzia delle Entrate) to reduce tax debt and extend payment terms (Art. 182-ter L.F. / Codice della Crisi).
Restructuring Agreements:
Assistance in drafting court-approved recovery plans.
Rottamazione e Definizione Agevolata:
Assessment of the opportunities offered by "tax truces" to reduce penalties and interest.
Sovraindebitamento:
Procedures for managing the financial distress of persons and entities not subject to bankruptcy proceedings and of professionals.
Tax Debt Restructuring in Rome: From Distress to Recovery
The accumulation of tax debts is one of the main obstacles to the recovery of distressed businesses. The Italian system, long characterised by the Italian Revenue Agency (Agenzia delle Entrate)'s inflexibility in negotiations, has undergone a profound transformation with the Business Insolvency Code (D.Lgs. 14/2019) and the 2020–2022 reforms, which introduced much more effective tools for reducing tax debt and extending payment terms.
The Business Insolvency Code: New Tools
The CCII introduced an early warning system and tools for resolving business distress, including:
- Negotiated Resolution of Business Distress: an out-of-court procedure involving an independent expert who facilitates negotiations with creditors, including the tax authorities;
- Restructuring Agreements with a Tax Settlement: an agreement with at least 60% of creditors + separate negotiations with the Italian Revenue Agency (Agenzia delle Entrate)/INPS;
- Composition with Creditors: collective insolvency proceedings binding on all creditors, with the possibility of offering the tax authorities less than the nominal debt;
- Restructuring Plan Subject to Court Approval (PRO): a hybrid instrument introduced in 2022.
Tax Truces and Tax Amnesty Settlements (Rottamazione): Exceptional Opportunities
Alongside insolvency proceedings, the Italian Government has periodically introduced exceptional measures for settlement on favourable terms (known as "tax truces"): tax amnesty settlements (rottamazione) for tax payment notices (cartella), with penalties and interest waived; settlements on favourable terms for pending disputes; and amnesties for formal irregularities. The Firm continuously monitors the application windows for these measures and assists clients in assessing their advantages compared with ordinary procedures.
Tax Debt Settlement under art. 63 CCII: Requirements, Procedure and Cram-Down
L'art. 63 of D.Lgs. 14/2019 (Business Crisis and Insolvency Code — CCII) governs tax debt settlements within debt restructuring agreements and compositions with creditors. To qualify for a settlement, the business must be in financial distress or insolvent and submit a proposal to the Italian Revenue Agency (Agenzia delle Entrate) and INPS supported by: (1) a piano economicofinanziario attestato by an independent professional entered in the register of statutory auditors; (2) a perizia on the liquidation value of the assets, demonstrating that the proposal offers the tax authorities more than they would receive in a bankruptcy liquidation. The mechanism of tax cram-down — introduced by D.L. 125/2020 (conv. L. 159/2020) and confirmed in the CCII — allows the Court to approve the restructuring agreement even where the Italian Revenue Agency (Agenzia delle Entrate) votes against it, if: the amount offered to the tax authorities is at least equal to the realisable value in liquidation; and the offer is no less than that made to other creditors of equal rank. This instrument has radically changed the balance of bargaining power in negotiations with the tax authorities: the Italian Revenue Agency (Agenzia delle Entrate) no longer has an absolute veto, and the prospect of a judicial cram-down encourages an out-of-court agreement. The Italian Revenue Agency (Agenzia delle Entrate) generally has 30 giorni from receipt of the proposal to give its opinion.
Tax Amnesty Settlement (Rottamazione-Quater) and Settlements on Favourable Terms: Exceptional Opportunities
The L. 29 dicembre 2022, n. 197 (2023 Budget Law), under art. 1, cc. 231-252, introduced the so-called "rottamazione-quater" for tax payment notices (cartella), which allowed debts referred to the Collection Agent between 1 January 2000 — 30 June 2022 to be settled on favourable terms by paying only the principal (taxes and contributions), with all penalties, late-payment interest and interest entered on the collection roll waived. The instalment plan provided for up to 18 rate with payment deadlines in 2023–2025. Failure to pay a single instalment results in exclusion from the tax amnesty settlement (rottamazione), with the loss of all benefits and reinstatement of the original debt. Exceptional tax truces — tax amnesty settlements (rottamazione), settlements on favourable terms for pending disputes, and amnesties for formal irregularities — have been introduced almost annually in recent years, making continuous monitoring by a tax adviser essential to avoid missing application windows. The Firm Marzo Associati continuously monitors relief measures and assists clients in comparing tax amnesty settlements (rottamazione) or settlements on favourable terms with formal insolvency procedures (tax debt settlements and restructuring agreements), taking into account the business's overall debt exposure and liquidity position.
Ordinary Instalment Arrangements: When Restructuring Is Not Possible
The conditions for a tax debt settlement or composition with creditors are not always met. In many cases, the most accessible solution is an ordinary instalment arrangement for tax debt with the Italian Tax Collection Agency (ADER), allowing payment in up to 120 monthly instalments (10 years) for amounts exceeding €120,000, subject to the submission of appropriate documentation on the debtor's financial circumstances. Those in financial difficulty may obtain a temporary suspension of enforcement action while their instalment application is being assessed. Our Firm assists with preparing the necessary documentation, managing relations with the Collection Agent and assessing the relative advantages of ordinary instalment arrangements and insolvency solutions, taking into account the overall position regarding financial debts and private creditors.
Experience in Financial Distress Negotiations with the Tax Authorities in Rome
The Firm Marzo Associati, based at Via Ancona 20, Roma, has gained substantial experience in negotiations with the Provincial Directorates of the Italian Revenue Agency (Agenzia delle Entrate) in Rome and Lazio, in preparing documented tax debt settlement proposals and in managing proceedings before the Court of Rome and the major Italian courts.
Domande Frequenti — Debt Restructuring
What Is a Tax Debt Settlement and Which Tax Debts Can Be Restructured?
+
A tax debt settlement (art. 63 D.Lgs. 14/2019 — Business Crisis Code) is an instrument allowing businesses in financial distress to negotiate a reduction in tax and social security debts with the Italian Revenue Agency (Agenzia delle Entrate) and INPS within restructuring agreements or compositions with creditors. Debts that can be restructured include income taxes, VAT (subject to limitations), IRAP, withholding taxes and social security contributions. Unpaid VAT and withholding taxes can be reduced only in liquidating compositions with creditors. The Firm assesses the feasibility and advantages of a settlement on a case-by-case basis against alternatives (tax amnesty settlement (rottamazione), ordinary instalment arrangements and composition with creditors).
What Is the Difference between a Restructuring Agreement and a Composition with Creditors?
+
A restructuring agreement (art. 57 CCII) is an agreement between the debtor and at least 60% of creditors, approved by the Court, which does not require a majority vote by non-participating creditors but imposes the effects of the agreement on them. A composition with creditors is a collective insolvency procedure binding on all creditors in the same class if approved by the majority. A restructuring agreement is quicker and more flexible, while a composition with creditors is more suitable where there are numerous dissenting creditors or tax debts predominate. The choice depends on the structure of the liabilities and the objectives of the recovery plan.
Can the Italian Revenue Agency (Agenzia delle Entrate) Be 'Forced' to Accept a Tax Debt Settlement?
+
Yes, through the 'tax cram-down' mechanism introduced by the 2020 reform (D.L. 125/2020) and confirmed in the Business Crisis Code. If the Italian Revenue Agency (Agenzia delle Entrate) votes against the tax debt settlement proposal, the Court may nevertheless approve the agreement if: (1) the proposal offers the tax authorities more than liquidation would, and (2) the offer is no less than that made to creditors of equal rank. This has made tax debt settlements much more effective by removing the Agency's absolute veto. Our Firm has experience in structuring proposals that meet the cram-down requirements.
Can a Professional with Substantial Tax Debts Access Over-Indebtedness Procedures?
+
Yes. The over-indebtedness procedures under the Business Crisis Code (artt. 65 ss. CCII) are available to those not subject to bankruptcy proceedings: individuals, professionals, small business owners below the statutory thresholds and innovative start-ups. There are three main procedures: the Consumer Plan (only for personal debts unrelated to business activities), the Minor Composition with Creditors (for those carrying on business activities), and Controlled Liquidation. Over-indebtedness procedures can include tax debts in the restructuring, with scope for a substantial reduction in the debt owed to the tax authorities. The Firm assists professionals in financial difficulty in selecting and preparing the most suitable procedure.
Specialist Professionals
Debt Restructuring — Where We Operate
Our Firm provides services in ristrutturazione debito from our office in Rome to clients throughout Italy. We also assist businesses and individuals in Milan, Naples, Florence, Turin, Bologna and the main cities in Lazio.
Do you need assistance?
Our team is available for a tailored consultation.