Deductible bad debt provisions in Italy — the 0.50 % limit and the 5 % cap
Write-downs of trade receivables not covered by credit insurance, including provisions for credit risk, are deductible each year up to 0.50 % of the face value of the receivables. The deduction stops once write-downs and provisions deducted reach 5 % of the receivables on the year-end balance sheet; anything above 5 % is added back to income (TUIR art. 106).
2026 rules — verified on September 25, 2026Free, no account
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Sources and assumptions
- Gazzetta Ufficiale — TUIR (DPR 917/1986) art. 106 « Svalutazione dei crediti e accantonamenti per rischi su crediti » — tax year 2026, verified on September 25, 2026
Excerpt from the source : « Le svalutazioni dei crediti risultanti in bilancio, per l'importo non coperto da garanzia assicurativa, che derivano dalle cessioni di beni e dalle prestazioni di servizi indicate nel comma 1 dell'articolo 85, sono deducibili in ciascun esercizio nel limite dello 0,50 per cento del valore nominale o di acquisizione dei crediti stessi. »
- Gazzetta Ufficiale — TUIR art. 106 — tax year 2026, verified on September 25, 2026
Excerpt from the source : « La deduzione non e' piu' ammessa quando l'ammontare complessivo delle svalutazioni e degli accantonamenti ha raggiunto il 5 per cento del valore nominale o di acquisizione dei crediti risultanti in bilancio alla fine dell'esercizio. »
Calculation assumptions
- Both limits are calculated on the face value of trade receivables on the year-end balance sheet.
- The provision already deducted is the total of write-downs and provisions deducted in earlier years and not yet absorbed by bad debt losses.
- Financial intermediaries (full deduction), bad debt losses (art. 101) and IRAP are not covered.
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This result is provided for information purposes only and does not constitute personalised tax advice. Check your situation with the tax authorities or a professional.