Biennial Tax Settlement 2026–2027: Key Changes to Know Before the Deadline

The deadline for deciding whether to opt into the new Biennial Tax Settlement scheme (Concordato Preventivo Biennale, CPB) is approaching. For the 2026–2027 period, the deadline is set for 31 October 2026; since this falls on a Saturday, it is postponed to 2 November.

The settlement allows VAT-registered taxpayers subject to the ISA tax reliability indicators to agree in advance with the Italian Revenue Agency on their taxable income for a two-year period. Once the proposal has been accepted, the income actually earned is no longer relevant for tax purposes during the two-year period. Tax must instead be paid on the agreed income, whether it is higher or lower than the income actually earned.

One of the main changes for the new period is the extension of maximum proposed-income increases to taxpayers with lower ISA scores. Until now, limits on increases compared with declared income applied only to taxpayers with an ISA score of 8 or higher, with caps ranging from 10% to 25%. A 30% cap will now also apply to taxpayers with ISA scores between 6 and 8, while a 35% cap will apply to those with scores between 1 and 6.

A new termination provision linked to the international situation has also been introduced. The settlement will cease to apply if actual income falls by more than 30% compared with the agreed income due to armed conflicts in the Middle East, provided that this impact is demonstrated by an annual increase of more than 5% in the consumer price index.

As already provided for the 2025–2026 period, the reduced substitute tax regime remains in place. A rate of 10%, 12% or 15%, depending on the taxpayer’s ISA score, applies to the portion of agreed income exceeding the income declared in the previous year. However, the reduced tax applies only to an excess of up to €85,000; ordinary tax rates apply above this threshold.

Another change for 2026–2027 concerns the hyper-depreciation allowance. Initially incompatible with the CPB, Decree-Law No. 38/2026 made the two measures fully compatible by including hyper-depreciation among the adjustments that may amend the agreed income.

As regards incentives, the Government is reportedly considering introducing a “loyalty bonus” in the Omnibus Decree expected to be discussed by the Council of Ministers on 4 August. The measure would be intended for taxpayers who renew their participation after the first 2024–2025 period.

Possible measures include extending the exemption from compliance certification for tax offsets, removing the certification or guarantee requirement for VAT refunds, shortening tax assessment periods and eliminating interest on instalment payments. The reintroduction of a special voluntary correction procedure for the 2020–2024 tax years has also not been ruled out.

However, none of these measures has yet become law. They remain proposals under consideration, which is a further reason not to rush the decision.

Lastly, an important clarification applies to taxpayers who decide not to renew. The 2026 advance tax payment calculated under the historical method must still be based on the agreed income for 2025, without any recalculation based on actual income, regardless of the decision made for the new two-year period.

Tax & Legal Research Hub

Centro Studi e Pianificazione Fiscale

Responsabile

Dott. Valerio Locatelli

Coordinatore

Dott. Giancarlo Marengo