INFOFLASH PAYROLL OCTOBER 2024

Reform of Civil Penalties for Omission and Evasion of INPS/INAIL Contributions

Article 116, Paragraph 8, Letter a) of Law No. 388/2000, Governing Contribution Omission, Has Been Revised as Follows:

  • In cases of non-payment or late payment of contributions or premiums, the amount of which can be identified from mandatory filings and/or records, a civil penalty is applied annually at the official reference rate plus 5.5 percentage points. If the contributions or premiums are paid within 120 days in a single installment, voluntarily, before any notification or request from the competent authorities, the surcharge is not applied. The civil penalty cannot exceed 40% of the amount of contributions or premiums unpaid by the legal deadline.

The notable change here is the introduction of a form of “voluntary correction” for INPS payments, allowing the employer to make the payment within 120 days from the due date, subject to an annual surcharge equal to the current official reference rate, which stands at 3.65%.

 

Article 116, Paragraph 8, Letter b), of Law No. 388/2000, Governing Contribution Evasion, Now States:

  • In cases of evasion involving false or omitted mandatory filings, records, or declarations, made with the specific intention of not paying contributions or premiums by concealing existing employment relationships, paid wages, or generated income, or hiding facts or information relevant to determining the contribution obligation, a civil penalty of 30% per year is due. However, the civil penalty cannot exceed 60% of the amount of contributions or premiums unpaid by the legal deadline. If the debt situation is voluntarily disclosed before any notifications or demands by the competent authorities, and in any case within twelve months from the original payment deadline, the parties are subject to a civil penalty equal to the official reference rate plus 5.5 percentage points annually, provided that the contributions or premiums are paid in full within 30 days of the disclosure. If payment is made within 90 days, the penalty increases to the reference rate plus 7.5 percentage points. In any event, the civil penalty cannot exceed 40% of the unpaid contributions or premiums by the legal deadline. For installment payments, the reduced penalty rate applies from the payment of the first installment, with full penalty rates reinstated in case of non-payment or underpayment of subsequent installments.

The noteworthy update here is that, if an undisclosed debt is regularized within 12 months of the due date, payment can be made within 90 days of the disclosure, subject to a rate equal to the reference rate plus 7.5%.

 

The Decree Has Also Introduced a New Provision, Letter b bis), as Follows:

  • In the case of a debt situation detected ex officio by the Social Security Institutions or following inspection activities, the civil penalty for omission and evasion is reduced by 50% if contributions and premiums are paid in full within 30 days of the notification. For installment payments, the reduced penalty applies starting with the payment of the first installment but reverts to the full amount if subsequent installments are missed or underpaid.

Thus, if a debt situation is detected ex officio or following an inspection, for omissions, a penalty of 50% of the reference rate plus 5.5% is applied, while for evasion, the penalty stands at 15%.

 

Regime Governing the Non-Payment of Employee Contributions by Employers

To conclude this overview on penalties, below is the current regime for employers failing to pay social security withholdings on behalf of employees, as outlined in Article 2, Paragraph 1-bis, of Decree-Law No. 463/1983, as amended by Decree-Law No. 48/2023:

  • Failure to pay withholdings on employees’ wages exceeding €10,000 annually is punishable by imprisonment for up to three years and a fine of up to €1,032. If the unpaid amount is €10,000 or less annually, an administrative pecuniary penalty ranging from one and a half to four times the unpaid amount is applied. The employer is not subject to criminal penalties or administrative fines if the withholdings are paid within three months of the notification or ascertainment of the violation.

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