Changes to Succession and Donation Taxes in Italy: Key Updates Effective January 2025

Changes to Succession and Donation Taxes in Italy: Key Updates Effective January 2025

In October 2024, Legislative Decree No. 139 of September 18, 2024, was published in the Official Gazette No. 231. Among other measures, it introduces significant updates to succession and donation taxes, which will now need to be paid without waiting for the tax assessment notice from the Italian Revenue Office.

This decree implements the fiscal delegation law (Law No. 111/2023), aimed at rationalizing and simplifying these taxes, as well as registration, stamp, and other non-VAT taxes.

The changes, effective from October 3, 2024, will apply starting January 1, 2025.

Succession and Donation Taxes Before the Changes

Succession and donation taxes are indirect taxes levied on the transfer of assets and rights through inheritance, donation, or gratuitous transfer. These taxes are paid by the recipients of such assets.

The main regulations governing these taxes are Legislative Decree No. 346/1990 (Unified Text on Successions and Donations) and Legislative Decree No. 262/2006, which specifically define rates and exemptions.

Until January 1, 2025, under the 1990 Unified Text, these taxes are calculated by the Italian Revenue Agency based on the details provided in the succession declaration and any substitute declarations, if applicable.

The current process is as follows:

1. The competent office quantifies the tax due based on the declaration.
2. The tax assessment notice is issued to the obligated parties within three years of registering the declaration.
3. Taxpayers must pay the assessed amount within 60 days of receiving the notice, either in full or in installments, as permitted.

Principles of the Fiscal Delegation Law

The fiscal delegation law introduces a reform aimed at rationalizing and simplifying the administration of individual taxes, including succession and donation taxes.

Specifically, it seeks to simplify documentation requirements, streamline the declaration submission process, and enhance payment methods, particularly through digital platforms. Among the most innovative features is the introduction of self-assessment, allowing taxpayers to calculate and pay their taxes without waiting for the tax assessment notice from the Revenue Agency.

Self-Assessment for Succession and Donation Taxes

Legislative Decree No. 139/2024 implements this self-assessment mechanism in line with the delegation law’s principles.

While self-assessment is not entirely new in the Italian tax system (already applied to mortgage, cadastral, and stamp duties), the new rules now extend it to succession and donation taxes.

Under the new regime:

• Taxpayers will calculate and pay the tax themselves, eliminating the need for the Revenue Agency to issue an assessment notice.
• Self-assessed taxes must be paid within 90 days of filing the succession declaration.

This shift places the responsibility on taxpayers to ensure accurate calculations. For inheritances opened after January 1, 2025, taxpayers must determine the taxes owed and pay them independently, while the Revenue Agency’s role will focus on verifying compliance.

If discrepancies are found, the agency will issue a supplementary tax notice, obligating the taxpayer to pay the additional tax and any penalties.

Additional Simplifications

Further changes include:

• Removing the requirement to attach cadastral extracts and documents related to property sales in the previous six months to the succession declaration.
• Mandating the submission of succession declarations exclusively via digital platforms (except for non-residents, who can use registered mail).
• Maintaining the obligation to pay cadastral, mortgage, and stamp duties at the time of filing the succession declaration.

These updates aim to streamline the tax collection process, with a revised Unified Text on Successions and Donations expected to codify the new rules.

The Central Role of Italian Lawyers and Notaries

The reforms place notaries at the forefront of the tax liquidation process. Their expertise is crucial for accurate tax calculations, providing clients with reliable assessments of amounts due and helping them avoid surprises.

Lawyers and Notaries continue to serve as key advisors, guiding clients through succession procedures and fostering more informed financial planning. Their experience ensures a smoother process from start to finish, reinforcing their indispensable role in Italian tax matters.