Italy: Legal Interest Rate – Increased To 2,5% From 2012 – Tax And Pension Contribution Effects

Last Updated: 25 January 2012
Article by Batini Colombo Saottinis' Tax Team


With the Ministry Decree dated 12.12.2011, published on the Official Gazette no. 291 dated 15.12.2011, the legal interest rate, stated by article 1284 of the Italian Civil Code, has been increased from 1,5% to 2,5% on a yearly basis.

The increase has effects with relation to some tax and contribution laws.


The new interest rate is applicable starting from January 1st 2012.


The increase has effects with relation to some tax measures.


The increase of the legal interest rate implies the increase of amounts due under the self regularization institute set by article 13 of the Legislative Decree no. 472 dated December 18th 1997.

In order to regularize insufficient or delayed payments of taxes through the self regularization, the amount due has to be increased by the reduced penalty and legal interests calculated at the legal rate maturing day by day starting from the day following the date when the fulfilment expired up to the date of effective payment.

The legal rate to be applied is the one if force in every single period under a pro - rata temporis criterion and therefore:

  • 1,5%, until 31.12.2011;
  • 2,5%, from 1.1.2012 up to the payment date. In example, the self regularization of the missed payment of the second instalment of the corporate income tax (IRES) expired on November 30th 2011, paid on February 10th 2012, implies the application of the legal rate as follows:
  • 1,5%, for the period 1.12.2011 - 31.12.2011;
  • 2,5%, for the period 1.1.2012 - 10.2.2012.


The increase of the legal interest rate to 2,5% operates even in case the tax payer has opted for a payment into instalments of amounts due under alternative tax litigation's measures:

  • acceptance of invitations to cross-questionnaires, under article 5 of the Legislative Decree no. 218 dated 19.6.97; on instalments following the first one, interests are calculated starting from the day following the payment of the first instalment;
  • acceptance of tax audits' reports, under article 5-bis of the Legislative Decree no. 218 dated 19.6.97; on instalments following the first one, interests are calculated starting from the day following the notification date of the partial assessment report;
  • accepted assessment, under article 8 of the Legislative Decree no. 218 dated 19.6.97; on instalments following the first one, interests are calculated starting from the date of acceptance of the assessment;
  • acquiescence of the assessment, under article 15 of the Legislative Decree no. 218 dated 19.6.97; on instalments following the first one, interests are calculated starting from the day following the payment of the first instalment;
  • judicial appeasement, under article 48 of the Legislative Decree no. 546 dated 31.12.92; in instalments following the first one, legal interests are calculated starting from the date of appeasement's agreement.

"Crystallization" of the legal interest rate

With relation to the accepted assessment the Circular Message of the Tax Agency no. 28 dated 21.6.2011 (§ 2.16) has clarified that the legal interest rate to be applied is the one referred to the year of its perfecting, remaining the same even if the payment of the instalments will be made in the following years.

The same principle is applied to all the other measures mentioned above.


The new 2,5% legal interest rate is applied to interests' calculation not agreed in writings, with relation to:

  • mortgages (art. 45 paragraph 2 of the Italian General Tax Law - TUIR);
  • to interests concurring to form the corporate income (art. 89 paragraph 5 of the Italian General Tax Law - TUIR).


The increase of the legal interest rate to 2,5% can't be applied, instead, to the alternative/substitutive tax due for the re-calculation of participations' purchase cost or lands, under article 5 and 7 of the Law no. 448 dated 28.12.2001 n. 448 (Financial Law 2002) and subsequent amendments and integrations.

In that case interests due for payments by instalments is fixed at 3%, since its amount is not connected to the legal interest rate.


With a further Ministry Decree coefficients related to the calculation of register, mortgage, cadastral, inheritance and donation taxes, will be updated to the new legal interest rate, for the following tenancies and rents:

  • perpetual and undetermined tenancies;
  • undetermined time pensions;
  • lifetime pensions;
  • lifetime usufruct rights.

Effective date

The new coefficients will be applied to public and judicial instruments published or issued, to notarized and not notarized private agreements submitted for their registration, and inheritances or donations opened or made, starting from 1.1.2012.


The modification of the legal interest rate affects also civil penalties foreseen for the missed or delayed payment of social security of pension contributions, under article 116 paragraph 15 of the Law no. 388 dated 23.12.2000 n. 388 (Financial Law 2001).

In case of missed or delayed payment of these contributions, in fact, penalties are reduced to 2,5% starting from 1.1.2012, in case of:

  • objective uncertainties due to conflicting jurisprudential orientations or administrative determinations on the existence of the contribution obligation;
  • fraudulent activity by third parties, reported to the judicial authority;
  • turn-down, corporate reorganization having a particular social and economic relevance, relating the contingent and local employment situation and productive situation of the sector.

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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Batini Colombo Saottinis' Tax Team
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