Legal interest rate for the year 2023 at 5%
The Decree of the Ministry of Economy and Finance of 13 December 2022, published in Official Gazette No. 292 of 15 December 2022, set the legal interest rate in force as of 1 January 2023.
With this decree, a decisive increase was envisaged compared to last year: the rate will in fact rise from 1.25% to 5%.
The parameters that lead to the increase in the amount of legal interest due as of 1 January 2023, in accordance with Article 1284 of the Civil Code, are:
- the gross annual average yield of government bonds, with a maturity not exceeding twelve months
- the rate of inflation recorded in the year.
This increase, from a practical point of view, determines the amount of interest due for the late payment of taxes to be calculated by means of the voluntary settlement payments procedure. For example, if a taxpayer intends, in 2023, to pay taxes due in 2022 by benefiting from the voluntary settlement payments procedure, the additional interest will have to be calculated:
- applying the rate of 1.25% from 1 January to 31 December 2022;
- by applying the rate of 5% from 1 January 2023 to the day on which the payment is made.
The determination of the amount of statutory interest also affects business relationships between companies: in fact, the interest rate to be applied on transactions between the parties, if not specifically set out in the contractual documents, is determined at the statutory rate (i.e. 5% from 1 January 2023).
***
LDP remains at your disposal for any further clarifications.
Milano, 02/01/2023
Best regards,
LDP
