As usual, the VAT advance payment for the current year must be made by December 27th using one of the following methods:
| HISTORICAL | 88% of the last VAT payment of the previous year |
| FORECAST | 88% of the turnover of the last month or quarter of the current year |
| OPERATIONS PERFORMED | 100% VAT due on transactions carried out up to December 20 of the current year |
HISTORICAL METHOD
With the ” historical method “, the taxpayer determines the advance payment in an amount equal to 88% of the reference base (debit balance) identified according to the liquidation periodicity adopted; in particular:
| TAXPAYER | REFERENCE BASE | |
| Monthly | Debit balance for liquidation of previous December year | |
| Monthly “postponed” | Debit balance for the previous year’s December settlement made on the basis of the transactions of the previous year’s November | |
| “Special” quarterly | Debit balance for the 4th quarter of the previous year | |
| Quarterly (debit balance) | Debt from annual VAT declaration relating to the previous year (balance + advance payment) The 1% interest applied in the annual declaration must not be considered ( Resolution no. 157/E of 2004 ). | |
| Quarterly (credit balance) | Debit balance without considering the higher advance payment from the previous year (i.e. the amount due for the previous year, equal to the difference between the advance payment and the annual VAT credit) |
1) A monthly taxpayer presents the VAT settlement balance for the month of December year x-1, gross of the advance payment, equal to €5,320.
The VAT advance payment for year x is equal to €4,681.60 (5,320 x 88%).
2) A quarterly taxpayer paid €1,717 (€1,700 of which is the debit VAT balance + €17 plus 1% interest) using the VAT form for year x, having paid €1,230 as an advance payment. Given that the VAT due for 2015 is €2,950 (€1,717 – €17 + €1,250), the VAT advance payment for year x amounts to €2,596 (€2,950 x 88%).
3) A fuel distributor presents a VAT settlement balance for the 4th quarter of year x-1, gross of the advance payment, equal to €7,680.
The VAT advance payment for year x is equal to € 6,758.40 (7,680 x 88%).
SPECIAL CASES
Adjustment of parameters/sector studies
For those who adjusted to the sector parameters/studies in the previous year, the calculation of the VAT advance payment is not affected by this choice (the adjustment was, in fact, made “off-declaration”). If, in addition to ordinary tax management, you are considering the facilitated settlement of old tax liabilities, consult our complete guide on the Scrapping of Quinquies: Guide to the 2026 Facilitated Settlement .
Separate accounts
For entities that adopt the separate accounting regime (pursuant to art. 36 , Presidential Decree no. 633/1972):
- by option : the turnover is determined in a unitary manner and therefore the periodic VAT payments are cumulative for all activities;
- by obligation (with different payment frequency): the advance payment must be proportionate to the amount due at the time of:
- liquidation December of the previous year: for “monthly” and “special quarterly” activities;
- VAT return for the previous year: for “quarterly” activities.
Change in periodic liquidation regime
If a taxpayer, following a change in turnover, has adopted a different periodic settlement regime than the previous year, specific methods for determining the taxable base are provided; in particular:
| Switching from quarterly to monthly regime | If the VAT payer switched from the quarterly regime in the previous year to the monthly regime in the previous year, they must compare the “forecast data” for the current year with the “historical data,” consisting of: 1/3 of the tax paid in the VAT return for the current year; 1/3 of the VAT paid for the fourth quarter of the previous year (“special” quarterly reports). |
| Switching from monthly to quarterly regime | If the VAT payer switched from the monthly regime in the previous year to the quarterly regime in the current year, they will have to compare the “forecast data” for the current year with the “historical data” represented by the sum of the VAT payments for the months of October, November, and December of the previous year, net of any deductible excess resulting from the payment for December of the previous year. |
4) Suppose that the Verdi company, which pays quarterly in year x-1, becomes monthly in year x; if the VAT due in the declaration for year x-1 is equal to €6,600, we will have that:
– the taxable base for year x is equal to €2,200 (6,600/3)
– the advance payment for year x will be equal to €1,936 (2,200 x 88%).
5) Suppose that the Neri firm, which was monthly in year x-1, becomes quarterly in year x; taking into account the balances of the following periodic liquidations:
| October year x-1 | 2,850 euros |
| November year x-1 | 1,780 euros |
| December year x-1 (deposit + balance) | 2,240 euros |
| 6,870 euros |
The amount of the advance payment due for year x will be equal to €6,045.60 (6,870 x 88%).
Former minimum/flat-rate taxpayers
The taxpayer (formerly a minimum or flat-rate taxpayer) who adopted the ordinary VAT regime in the current year, filing monthly/quarterly VAT payments, without having a reference base for the previous year, is not required to pay the VAT advance payment.
Extraordinary operations
On the occasion of the following operations:
- transfer
- company transfer
- succession or donation
- merger/split/transformation
Generally, a situation of continuity occurs between the parties participating in the transaction (if the deed does not exclude the subrogation of the VAT debt/credit).
Therefore, where there is a ” transfer ” of VAT debt/credit, the beneficiary takes over by ” continuity” all the active and passive positions of the ” transferor “, including the obligation to pay the VAT advance on the basis of the situation existing in the previous year.
It is, however, also possible to use one of the calculation methods examined below.
FORECASTING METHOD
As an alternative to the historical method, it is possible to adopt the so-called ” forecast method “ ; in this case, the advance payment is calculated based on an estimate of the transactions that will be carried out by the end of the reference period.
To this end it is necessary:
- that the advance payment is not less than 88% of the amount actually due;
- make a correct estimate of the invoices to be issued/received by the end of the year.
Taxpayers who apply this criterion risk underpaying their VAT; in this case, they may proceed with a voluntary disclosure of their tax due by the VAT return filing deadline.
METHOD OF OPERATIONS PERFORMED
As an alternative to the historical and forecast methods, a further criterion is envisaged based on the determination of the “effective” amount of the advance payment taking into account the transactions carried out as of December 20 (pursuant to art. 6 of Presidential Decree no. 633/72) and not only those invoiced and recorded.
As specified in Circular No. 40/1993, this method, in order to determine the VAT relating to transactions carried out, takes into account not only the tax relating to the transactions recorded in the period, but also that relating to the transactions for which the conditions determining the taxable moment have occurred (delivery/shipment, payment of the consideration, issuance of the invoice, etc.).
In practice, the amount to be paid, in the amount of 100% (and not 88%), emerges from the algebraic sum of the following elements:
| ELEMENTS | ALGEBRAIC SUM OF: |
| with + sign | – the VAT payable relating to transactions recorded (or which should have been recorded) in the period: 1/12 – 20/12 , for monthly taxpayers 1/10 – 20/12 , for quarterly taxpayers – the VAT payable relating to transactions carried out up to 20/12 , but not yet recorded as the terms for issuing the invoice or registration have not yet expired. To this end, the following must be considered: sales via DDT up to December 20 for which the relevant deferred invoice has not been issued; invoices issued for the receipt of advance payments up to December 20, not yet recorded; invoices issued up to December 20 (even if not collected), not yet recorded. Deferred invoices issued by December 15 if monthly or by October 15 if quarterly, relating to deliveries/shipments made in November (or September if quarterly), are not included in the calculation of the advance payment. |
| with sign – | – the input VAT relating to purchases and imports recorded (purchase register) in the period: 1/12 – 20/12, for monthly taxpayers; 1/10 – 20/12, for quarterly taxpayers; – the input VAT relating to intra-Community transactions , for which the output VAT has already been considered (due to double registration); – any input VAT carried forward from the settlement relating to the previous period (November or 3rd quarter). |
Third party accounting
Taxpayers who outsource accounting may (optionally) determine the advance payment equal to 2/3 of the VAT due based on transactions recorded in November that will give rise to the December 2016 payment.
Road transport
Road hauliers who ( art. 74 , Presidential Decree no. 633/72):
- record invoices issued within the quarter following the quarter of issue;
- for the purposes of calculating the advance payment they use the “ transactions carried out ” method;
determine the VAT due by means of the sum :
- of invoices issued in the 3rd quarter recorded in the period 1/10 – 20/12
- of invoices issued between 1/10 and 20/12 even if registered in the first quarter of the following year.
For these subjects, it is recommended to apply the “forecast” method, as it is possible to determine with certainty the VAT due for the fourth quarter of 2016, as also “suggested” by the Ministry of Finance in circular no. 328 of 20 December 1995 .
Cash VAT settlement
For taxpayers who adopt the “cash” VAT settlement (art. 32-bis, Legislative Decree 83/2012):
- VAT payable on the sale of goods/services becomes due at the time of payment of the relevant consideration; in particular, the tax is due one year after the transaction has been carried out ( art.6 , Presidential Decree 633/72), unless the buyer or client has been subjected to bankruptcy proceedings before this deadline.
- Input VAT relating to purchases is deductible upon payment of the relevant fees and in any case after one year from the moment the transaction is considered to have taken place.
For VAT advance payment purposes, entities using this regime must apply the “ordinary” rules; specifically, applying the transaction-based method allows for the VAT relating to uncollected active transactions carried out in the period 1/12 – 20/12 or 1/10 – 20/12 to be disregarded. However, it is not possible to consider VAT relating to passive transactions recorded in the same period but not yet paid.
SUBJECTS EXCLUDED FROM THE DEPOSIT PAYMENT
Taxable persons are exempt from paying the VAT advance payment if:
| START OF ACTIVITY | they started their activity during the year |
| CESSATION OF BUSINESS | Monthly taxpayers: ceased their activity by 30/11 Quarterly taxpayers: ceased their activity by 30/09 |
| WITH VAT CREDIT IN THE PREVIOUS YEAR | in December of the previous year, they had a VAT credit for which they may or may not have requested a refund (monthly taxpayers); in the liquidation relating to the 4th quarter of the previous year they presented a VAT credit (quarterly taxpayers); in the declaration relating to the previous year they had a VAT credit (quarterly “by option”) they plan to highlight a VAT credit in the annual declaration for the current year (quarterly “by option”) they plan to close the last liquidation of the current year with a deductible tax surplus |
| AGRICULTURAL ENTERPRISES | exempt agricultural producers ( art. 34, paragraph 6 , Presidential Decree no. 633/72) |
| ENTERTAINMENT | carry out entertainment activities ( art. 74 of Presidential Decree no. 633/72) |
| FLAT RATES | they apply the flat- rate regime ( law no. 398/91 ) |
| MINIMUM | have adopted the minimum regime (art. 27, paragraphs 1 and 2 , Legislative Decree no. 98/2011) have left the minimum/flat-rate regime with application of the “ordinary” regime |
| FLAT RATE | they adopted the new flat-rate regime (law no. 190/2014). |
| EXEMPTED OR NON-TAXABLE TRANSACTIONS | they have carried out exclusively transactions that are exempt or not taxable for VAT purposes. |
DEDUCTION OF THE ADVANCE PAYMENT
The amount paid can be deducted at the first “useful opportunity” , that is:
| TAXPAYER | USE OF THE DEPOSIT | |
| Monthly (also “with third parties”) | December liquidation | (16/01 following year) |
| Special Quarterly | 4th quarter liquidation | (16/02 following year) |
| Quarterly | VAT declaration | (16/03 following year) |
| Separate activities under mixed VAT settlement regime | December settlement, 4th quarter settlement, VAT declaration | (16/01 following year)(16/02 following year)(16/03 following year) |
PAYMENT TERMS AND METHODS
As usual, the VAT advance payment must be made:
- by December 27th
- via telematic F24, directly or through an authorized intermediary
- using the following tax codes:
- “ 6013 ” (monthly contributor)
- “ 6035 ” (quarterly taxpayer)
- indicating the year for which the advance payment is being made as the reference period .
If the amount to be paid is less than €103.29, no payment will be made.
It is also recalled that the aforementioned VAT advance payment:
- it cannot be paid in installments ( art. 20 of Legislative Decree no. 241/1997);
- it can be offset against tax and/or social security credits still available;
- The 1% increase is not applicable to taxpayers with quarterly payments “by option” (Circular No. 40/1993); these taxpayers must apply the interest increase only to payments relating to the first three quarters and to those made as a balancing payment when filing their annual tax return.
Record of the advance payment
As is known, there is no longer a requirement to record periodic VAT payments in the VAT register; however, recording the amount paid as an advance VAT payment in the register of issued invoices/payments or in the register of payment records may prove useful in the event of audits.
VAT advance payment and annual declaration
The VAT advance payment and the related calculation method must be indicated in the annual VAT return.
SANCTIONS AND EFFECTIVE REPENTANCE
In the event of failure to pay the VAT advance payment or insufficient payment, a 30% penalty applies. However, the taxpayer may resort to the “ravvedimento operoso” procedure to rectify their situation; specifically, the violation can be regularized with the payment of the following reduced penalty:
| Reduced penalty (tax code “8904”) | Deadline for payment |
| from 0.1% to 1.4% | Within 14 days of the deadline, keeping in mind that 0.1% will be applied for each day of delay. |
| 1.5% | Between the 15th and 30th day after the expiry date. |
| 1.67 % | Within 90 days of expiration. |
| 3.75% | After 90 days and within the deadline for submitting the declaration relating to the year of the violation. |
Please note that, upon regularization, in addition to the amount due and the reduced penalty, interest at the rate of 0.2% per year must also be paid (tax code “1991”).
FAILED VAT PAYMENT
For the crime of failure to pay VAT, the penalty threshold is set at 250,000 euros for each tax period.
Therefore, anyone who , within the deadline for the payment of the advance payment relating to the following tax period:
- fails to pay the VAT due on the basis of the annual declaration
- if the amount exceeds €250,000 for each tax period.
The offense is therefore committed if the violation continues beyond the deadline for payment of the advance payment for the following year. It is advisable to monitor the omitted payment resulting from the VAT form for year x by December 27, year x.