Offsetting of VAT credits with other taxes – increase of the threshold to Euro 2 million

Prepared by Alessia Zanatto, Luca Ghelli, Francesca Elvira Romito

According to article 22, no. 1, Law Decree “Sostegni bis”, entered into force starting from 26 May 2021, for the year 2021, the threshold to offset tax credits (including VAT) with other taxes or social contributions, via the F24 form, or through simplified tax refund procedure, has been increased up to Euro 2 million. It should be noted that article 147 of Law Decree no. 34 approved on 19 May 2020 (so-called “Decreto Rilancio”), for the year 2020, had already increased the threshold to offset tax credits (including VAT) with other taxes from Euro 700.000 up to Euro 1 million (Law no. 388 of 23 December 2000, article 34, paragraph 1, provides the possibility to offset tax credits (including VAT) up the amount of Euro 700.00).

As indicated in the explanatory report to the Law Decree “Sostegni bis”, due the epidemiological emergency from COVID-19, the above provision has been introduced in order to make more efficient the cash flow related to tax management.

It is worth pointing out that the above provision only affects the amount of the calendar year threshold. Therefore, it does not change the requirements to apply for the simplification (e.g. conformity visa).

Premised above, considering that the deadline for the submission of the VAT return expired on 30 April 2021, taxable persons should evaluate to submit an integrative VAT return, within 10 days before to offset VAT credit with the other taxes, in order to change the usage of the VAT credit arising from the annual VAT return submitted within the above term or to affix a conformity visa.

Let’s Talk

For more information please contact:

Alessia Angela Zanatto

PwC TLS Avvocati e Commercialisti


Luca Ghelli

PwC TLS Avvocati e Commercialisti

Senior Manager