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TAX EXEMPTION FROM DEBT
A tax exemption from a debt that has been uncollectable until the present, was regulated mainly by the normative that determined that losses on debts could be fiscally deductable when the debtor had been subjected to bankruptcy proceedings or when the loss results from "elements certain and precise" (art. 110 comma 5 Italian Decree 22/12/1986 n°917).
According to the financial Administration and the ministerial procedure (cfr. among others Italian Ministerial Decree 01/04/1981 n°9/016, 06/08/1976 n°9/124 e 16/05/1979 n°9/656) the criteria of certainty and precision had to be analytically proved by the creditor with proof of adequate documentation.
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THE NEW LAWS FOR THE DEDUCTABILITY OF DEBTS
The Italian law 134/2012 that went into effect that converted the Italian Development Decree 83/2012 introduced the new criteria of deductibility regarding losses on debts, determining that the" certain and precise elements subsist in and case" when "over the course of a period of six months, from the expiration of the payment of the debt" and when the debt is of a modest entity" (art. 101 co. 5 Italian TUIR).
According the normative that is in effect, the following are considered modest sums:
- sums that do not exceed a total of € 2.500,00 for companies that invoice up to 150 million euros;
- sums that do not exceed € 5.000,00 for companies that invoice over 150 million euros.
Starting from 2012, it is possible to obtain a tax exemption of debts that are of modest sums, based on the above mentioned requirements, without the obligation of providing the proof of documentation of the uncollectable debt.
Regarding tax exemptions of debts that are relative to dates prior to this period, the previous normative continues to apply, attributing the obligation of the creditor to provide specific proof, documenting the state of the debt being uncollectable.
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THE REPORT OF UNCOLLECTABILITY
According to the Department of Public Security of the Ministry of the Interior (Circular n°557/Pas/6909/12015) the report from the debt recovery firm that attests the debt to be uncollectable, considering the attempt to collect the debt to be unfruitful, constitutes a document that can be used fiscally towards a tax exemption. »
Read the article.
The report that this institution issues in the case of an unfruitful result of debt recovery.
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DETERMINING THE STATE OF INSOLVENCY OF THE DEBTOR
The final report stating that the debt is uncollectable, is not the only document issued by the debt recovery firm that can be validly utilized as tax exemption of the unpaid debt. Through informative methods offered by specialized firms that work in debt recovery, it is possible to obtain ample and in depth documentation attesting the state of insolvency of the debtor. This, in order to prove the subsistence of all "certain and precise elements" requested by the law, to be able to legitimately obtain a tax exemption of the debt owed.
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