Tax advances are prepayments for the current year’s taxes, calculated based on the income from the previous year. These apply primarily to IRPEF (personal income tax), IRES (corporate income tax), and IRAP (regional tax on productive activities), and are paid in two installments: June 30th and November 30th.
The amount of these advances can be determined using two methods:
- Historical method: This is based on the tax liability from the previous year. If the tax owed exceeds €51.65, the taxpayer must pay the advance.
- Provisional method: This allows the taxpayer to reduce the advance if they expect to earn less than in the previous year. However, this approach carries some risk, as underestimating income may result in penalties.
For substitute taxes, such as those in the flat-rate regime, 50% of the tax is paid in June, with the remaining 50% paid in November.
In addition to tax advances, VAT-registered individuals must also pay INPS advances for social security contributions. These contributions are calculated on the previous year's income (reduced to 80% for those enrolled in the INPS Separate Management for Professionals) and follow the same deadlines as taxes: June 30th and November 30th. Paying INPS contributions ensures that VAT-registered individuals secure their future pensions.
These advance payments are mandatory each year (except in specific cases, such as the closure of the business in the prior year) and serve to distribute the tax burden throughout the year, preventing large, lump-sum payments at year-end.
Payments are made using the F24 form, which can be completed online or submitted at banks and post offices.