Interest and Damages for Delayed Payments in Italy

In the activity of credit management, the possibility of obtaining compensation damages for delay is a fundamental topic.

The measure of interest actually obtainable on payments outstanding is more and more important in order to evaluate whether it is convenient to reach an amicable settlement and to accept a rescheduling of payment in favour of the debtor or not.

Equally, the measure of the damages which will be recognised because of the delay, cannot be overlooked with regard to the evaluation as a whole of the costs and the risks involved in commencing proceedings in order to enforce the debt or alternatively to acquire the legal possibility to write off the credit.

It must in fact be remembered that, according to the tax law of Italy and other countries, losses arising from the impossibility of recovering a debt may not be considered in balance sheets without the commencement of insolvency proceedings (see Art. 66 of Italian Testo Unico sulle Imposte Dirette); or in