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Two-year composition with creditors: main clarifications and changes announced in early 2025

published on 6 June 2025 | reading time approx. 4 minutes

During 2024, taxpayers admitted to the two-year composition with creditors were able to apply the new tool introduced by Legislative Decree 13/2024 for the first time. In recent months, the institution has been the target of several clarifications and evolutions, which should be taken into account for the purpose of handling the agreements already concluded as well as for the correct use of the instrument under consideration for the coming years.

Computation of advance payments for the year 2025

In the event of adherence to the composition with creditors for the years 2024-2025, the Italian Tax Authority has clarified that the advance payments for the 2025 tax period calculated using the historical method must be determined with reference to the direct taxes and IRAP due for 2024. Hence, in the case of using the historical method, the advance payment is determined on the basis of the so-called “difference line” of the RN panel, as in previous years.

Furthermore, since this is the advance payment due for the second tax period of the agreed biennium (i.e. 2025), the 10 per cent surcharge (3 per cent for IRAP) applicable only for the second advance payment due on the first tax period (in this case, 2024) will not be due.

ATECO 2025 update with no impact

The Italian Tax Authority has clarified that the changes introduced with the new ATECO 2025 classification do not trigger the cause of termination related to the change in the activity carried out during the two-year concordat period compared to the activity performed in the tax period preceding the biennium as such.

Indeed, the change of ATECO code is not in itself likely to cause the two-year composition with creditors to cease if the taxpayer continues to apply the same ISA. Termination also does not occur in the event that, as a result of the entry into force of the ATECO 2025 classification, the taxpayer finds himself applying a different ISA. This is because, in such a scenario, the variation is not the result of a substantial change in the activity exercised, thus eliminating the fundamental prerequisite for the application of the cause of termination.

Filing a supplementary declaration for the year 2023

The submission of a supplementary return requires the re-computation of the proposal for the mere purpose of verifying the cause of termination provided for in Article 22, paragraph 1(b), Legislative Decree No. 13/2024 (“different quantification of income or value of net production than those on the basis of which the acceptance of the proposal of arrangement took place”). Errors in favor/disfavor of the taxpayer do not affect the taxpayer's quantification of the proposal; it remains pegged to the figures in the original return.

Notice of tax assessment for the year 2023

A notice of tax assessment for fiscal year 2023, which has been issued to a company that has adhered to the composition with creditors for the years 2024-2025, may cause termination of the arrangement if undeclared revenues/income or nonexistence/deductibility of costs/expenses in an amount exceeding 30 per cent or other violations of no minor amount pursuant to Art. 22, Paragraph 1(a) of Legislative Decree No. 13/2024 are established.

Introduction new grounds for exclusion of the institute

The outline of the legislative decree containing supplementary and corrective provisions on tax compliance, two-year composition agreement, tax litigation and tax penalties (A.C. 262 of 04.07.2025) introduced two new disqualifying reasons applicable as of adherence to the composition with creditors for the years 2025-2026. Specifically, the institute cannot be accessed by:

the taxpayer who, with reference to the tax period prior to those to which the proposal relates, individually declares self-employment income and at the same time is a partner in a professional association, Professional Company under Italian law (Società tra Professionisti - STP) or law firm;
the professional association, Professional Company under Italian law (Società tra Professionisti - STP) or law firm in case all partners individually declaring self-employment income do not join the institute in the same tax periods.

Composition with creditors for the year 2025-2026 deadline

Decree No. 202/2024, the so-called “Decreto Milleproroghe,” postponed from 04/15/2025 to 04/30/2025 the deadline for the Italian Tax Authority to make the software for data acquisition/processing of the arrangement proposal available.

Likewise, the Corrective Decree-bis of the Tax Reform, which was approved by the Council of Ministers on 03/13/2025, delayed the deadline for adhering to the proposal from 07/31/2025 to 09/30/2025.

Incremental flat tax for composition with creditors for the year 2025-2026

Taxpayers adhering to the composition with creditors for the years 2025-2026 may apply the optional tax regime, provided for in Article 20-bis, Legislative Decree No. 13/2024, under which the so-called “Incremental Flat Tax”:

is structured in 3 tax rates (10 per cent/12 per cent/15 per cent) which are applicable based on the ISA score obtained by the taxpayer in the period prior to the period to which the proposal refers (2024);
is to be applied on the difference between the agreed income and the income declared for the previous tax period (2024) adjusted pursuant to Articles 15 and 16, Legislative Decree No. 13/2024 i.e. net of extraordinary components.

The Corrective Decree-bis provides that, starting with the accessions to the composition with creditors for the years 2025-2026, the aforementioned rates are applicable to the extent of a difference not exceeding Euro 85,000.

In that case, only the portion above that amount, the tax is to be applied in the following measures:

43 per cent for IRPEF subjects, ex art. 11, paragraph 1, letter c), TUIR;
24 per cent for IRES subjects, ex art. 77, TUIR.

With reference to “transparent” subjects, the assessment of the exceeding of the aforementioned limit of Euro 85,000 must be carried out considering the income accepted by the partnership/professional association.