The entry into force of the tax sanctions reform: the retroactivity puzzle

1. The fact

   The implementation of the tax delegation was completed with the publication of Legislative Decree 87/2024 in the Official Gazette in June, entering into full force on September 1, 2024. According to coverage in specialized financial outlets such as Il Sole 24 Ore and Ipsoa, the reform significantly reduces penalty rates for unfaithful and omitted tax returns. The matter is currently in its initial application phase: a critical juncture in which Revenue Agency offices and Tax Courts of Justice must determine whether to extend the new reduced penalties to conduct carried out before the summer of 2024.

   The issue arises from the literal wording of Article 5 of the decree, which establishes a strict temporal boundary: the new rules apply solely to violations committed on or after the date of entry into force. This restriction immediately triggered scholarly debate, as it excludes thousands of pending proceedings concerning prior tax years, creating a dual sanctioning system based exclusively on the date the violation was committed.

2. 

   The norms at play

   The centerpiece of the reform is Article 2 of Legislative Decree 87/2024, which amends the 1997 system by reducing, for example, the penalty for unfaithful tax declaration from 90% to 70% of the tax due. Article 3 of Legislative Decree 472/1997 represents the pre-existing foundational rule, establishing that where the law in force at the time of the violation differs from subsequent legislation, the more favorable law (favor rei) shall apply, provided the administrative decision has not become final.

   Finally, Article 5 of Legislative Decree 87/2024 functions as a transitional provision, specifying that the reductions apply only to violations committed from September 1, 2024, onwards. This generates a potential hierarchical conflict between a general principle (favor rei) and a specific provision restricting its temporal scope.

3. What case law says

   Established case law from the Court of Cassation has clarified on numerous occasions that the favor rei principle in tax law is not merely a statutory option, but a direct reflection of the constitutional principles of reasonableness and proportionality. According to constitutional precedent, a penalty that the legislature itself has deemed excessive by reducing its amount should not continue to be applied in its original measure solely for budgetary reasons or calendar cut-offs, absent objective justification.

   European jurisprudence has likewise reaffirmed that punitive measures must reflect the State's updated assessment of the wrongdoing. Consequently, the retroactivity of the milder sanction is recognized as a protected principle, exemptions from which must be strictly necessary and non-arbitrary to prevent unjustified disparate treatment of identical factual circumstances.

5. Analysis drafted and verified with edit.legal

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8. What it teaches professionals

   1. Litigation audit: professionals should promptly audit pending proceedings concerning violations committed prior to September 1, 2024, assessing the grounds to request a penalty recalculation.
   2. Legal arguments: defense pleadings should formally challenge the constitutional legitimacy of Art. 5 of Legislative Decree 87/2024 concerning the principle of retroactivity of the more favorable sanction.
   3. Monitoring practice guidance: practitioners must closely track upcoming guidelines from the Tax Administration, which may offer partial administrative relief options to mitigate litigation risks.

References: D.Lgs. 14 giugno 2024, n. 87D.Lgs. 18 dicembre 1997, n. 472Art. 3 Costituzione ItalianaArt. 25 Costituzione Italiana

Editorial oversight: Avv. Federico Papa·ICAMUpdated 3 September 2026Content drafted with AI support and subject to editorial source checks. Despite these controls, inaccuracies may remain: reports and rectification requests are welcome. Report a correction