Italy: Missed Payments Of Witholding Taxes

Last Updated: 30 August 2011

The Italian Social Security Authority (INPS), with its Circular Message no. 71 dated May 4th 2011, has clarified the application of penalties foreseen by article 39 of the Employment Law, with reference to the missed payment of withholding taxes and social security contribution on self-employment income by the purchaser.

In the above mentioned case, the purchaser/employer is sentenced with up to 2 years imprisonment and with a penalty up to € 1.032,91, unless he pays all duties within 3 months from the notification or from violation assessment.

INPS has clarified that rules set by the Employment Law are applicable only to purchasers who are getting working services from the followings:

  • Project workers
  • Self-employees considered subordinated employees
  • Professionals listed in public bodies
  • Corporate Independent Directors and Auditors
  • Participants to Boards or Commissions
  • Occasional workers (less than 30 days in a year and a gross salary lower than € 5.000).
  • Retired workers
  • Non professional sportsmen.

The responsibility of the violation is always connected to the subject responsible for the fulfillment.

INPS has identified a specific occasion when the criminal violation can't be configured: when the purchaser and the worker can be considered as one subject, since in this case no subordination's relationship is existing.

Provisions set by article 39 of the law n. 183, enforced on November 24th 2010, can be applied starting from EMens communications related to November 2010, submitted within December 16th 2010.

2. ARDUOUS WORKS: Implementation Decree

With the Legislative Decree n. 67 dated April 21st 2011 the Italian Government has introduced in the Italian jurisdiction the anticipated retirement for employees making arduous works.

Art. 1, paragraph 1 of Legislative Decree n. 374/1993 gives the definition of "arduous activities": they are those ones requiring a particularly intense and continuous psychic and physical commitment, conditioned by factors that can't be prevented with appropriate measures.

Article 2 of the Ministry Decree dated May 19th 1999 has identified the above mentioned activities in works done:

  • In tunnels, caves or mines
  • In particularly restricted spaces
  • In low pressure spaces
  • In high or low temperatures spaces
  • For asbestos elimination

The Legislative Decree n. 67/2011, has extended the beneficiaries category introducing:

  • Overnight workers
  • Assembly line workers
  • Drivers of public transports (buses, tube, trains).

2.1 Employees working overnight

Two categories of overnight workers has been identified:

  • Employees working on duties within 6 hours between midnight and 5.00 a.m. for a minimum period worked in one year:
    • Not lower than 78, for those ones who matured requisites to access to pre-retirement between July 1st 2008 and June 30th 2009
    • Not lower than 64 for those ones who matured requisites to access to pre-retirement starting from July 1st 2009.
  • Other overnight workers working for a minimum period of 3 hours between midnight and 5.00 a.m. for at least one year.

2.2 Anticipated retirement general requisites

In order to apply for advanced retirement, the employee has:

  • To have matured requisites for anticipated retirement starting from January 1st 2008;
  • Having paid social security contribution for at least 35 years;
  • Make an arduous work at the moment of application;
  • Have made an arduous work for:
    • A minimum of 7 years during the last 10 years until December 31st 2017
    • Form January 1st 2008 for a minimum period equal to ½ of the his/her working life.

2.3 Anticipated retirement specific requisites

In order to apply for anticipated retirement additional specific requisites are required:

  • Starting from January 1st 2013 workers must be at least 58 years hold and the sum of his/her age and years of social security contribution paid must be at least 94.
  • For years 2011 and 2012: age 57 and age plus social security contribution's years paid must be at least 94.

2.4 Application procedures

In order to access to the anticipated retirement, employee has to apply with a specific form, including all relevant documents, within:

  • September 30th 2011, if he/she will matured all requisites within December 31st 2011;
  • March 1st of the relevant year if he/she will mature all requisites starting from January 1st 2012.

2.5 Employer's fulfilments

Employer having overnight workers must annually communicate, through electronic procedures, to the Regional Employment Authority and to relevant Social Security Authority all relevant information and details on the overnight work.

Employer having Assembly line workers must communicate, through electronic procedures, to the Regional Employment Authority and to relevant Social Security Authority all relevant information and details within 30 days from its beginning.

For the first time of application this communication has to be submitted within June 25th 2011.

If the employer misses to submit above mentioned communications, he's punished with an administrative penalty from Euro 500,00 to Euro 1.500,00.

If the anticipated retirement is benefit by the employee on the base of untrue documentation, the subject who has submitted the documentation will be deem responsible for payment to Social Security Authority of a sum equal to the double amount unduly received.


The new tax reduction mechanism for year 2011 can be applied on employments second level's negotiations related to National Collective Agreements.

In order to apply the alternative tax (10% instead of the ordinary one) on particular salaries paid to employees, the employer has to:

  • Sign an autonomous national collective agreement (applicable for big companies)
  • Apply the agreement provided at the national level
  • Wait until a second level agreement in its area.

3.1 Un-retroactivity of the agreements

With its Circular Message n. 19/E dated May 10th 2011, the Italian Tax Agency has clarified its position on the tax reduction for 2011.

It has underline that in order to correctly prove the existence of a local second level agreement it must be done in writings before paying employees applying the reduced withholding tax rate.

Employers can regularize until August 1st 2011 all undue reductions.

3.2 Tax and Social Security contributions' reductions for year 2011

If all conditions are met, together with the tax rate reduction, employee has to right to receive even a contribution's reduction.


  • A second level employment agreement must foresee the tax reduction connected to productivity's objectives or overwork time;
  • The tax rate reduction can be applied on a maximum gross salary of € 6.000,00;
  • The employee must receive a total gross salary of the year NOT EXCEEDING Euro 40.000,00.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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