Taxes and Their Effective Values


Value added tax has always been at the center of the political and economic debatealthough it is a tax that aims to finance state services, and not only, is it often perceived by taxpayers as the arch enemy. However, not all economic transactions are the same, and in fact some, for various reasons, are not subject to this tax.

Before going into the merits of the question and the various operations, it should be specified that the VAT exempt operations in article 10 have nothing to do with the VAT excluded operations in article 15. In order to benefit from the VAT exemption of article 10 it is good to know that they are necessary formalities, such as:

  • Billing
  • Notation in the accounting records

Indication of VAT exempt operations relating to article 10 in the VAT return

Furthermore, article 1, paragraph 108, of Law establishes that the tax losses generated by these subjects can be used by the taxpayer in subsequent years only to eliminate business or self-employment income.

Even for minimal taxpayers it is possible to have tax losses that can be carried forward without limits in subsequent years. The art. 1 paragraph 108 of the 2008 Finance Law refers to what is contained in art. 84 paragraph 2 of the TIUR: the business losses realized by the minimum taxpayers in the first 3 years of activity can make use of the unlimited carryover over time.

Flat rates (2015 Stability Law)

Lump-sum taxpayers cannot cause losses as the calculation of income is based on a percentage that is applied only to revenues. The hypothesis may arise in which social security contributions, paid up to the achievement of an income equal to 0 (therefore that it is never negative), are able to reduce this outcome. Using the tax return calculator offers the right calculation in this cases.

However, it may be that these subjects bring with them losses that come from years prior to their entry into this regime. It is possible to subtract from the flat-rate income the losses that have been produced by the schemes previously adopted, however the following cases must first be specified:

Simplified accounting

The art paragraph 2 of the TIUR: in this case the losses are compensated by referring to the income of the same tax year.

Ordinary accounting

Losses can only be carried forward within the fifth year. If the losses are related to the first 3 tax periods, then there is no time limit.

Minimum system

Carry-over is authorized provided that the fifth period is not exceeded. Reference is made to the entire amount that can be contained in the various annuities, while for the losses of the 3 previous periods the rules of the financial years in ordinary accounting apply.