The "Preliminary settlement" is moving up

The fiscal reform has also established the system of the "preliminary settlement", that is an agreement with the Tax authorities whereby the taxpayer commits to reach certain projected income levels and receipts or fees levels. In exchange, the Tax Authorities shall grant a number of benefits such as the application of a reduced rate, the simplification of some obligations for documentary evidence and less chance of being assessed. The "preliminary settlement" responds to the need, felt by many small economic operators, to know their tax liability before the taxable period. It is aimed at entrepreneurs, individuals as well as companies, artists and professional people, provided that their receipts or fees are not higher than EUR 5,164.569.

Although not yet formally introduced, the "preliminary settlement" has had a trial run for the years 2003 and 2004. According to this system, any business income or income from independent activities declared for 2003 and 2004 and exceeding that declared for 2001, is taxed at a proportional rate of 23% for individuals, rather than the ordinary progressive IRPEF rates. The rate is increased to 33% for individuals, companies and other entities having declared for the year 2001 income exceeding EUR 100,000.

Those taxpayers who opt for a "preliminary settlement" are temporarily exempt from the obligation to issue dockets and receipts for tax purposes.