Tax credits: the Ministry of Economy and Finance (MEF) clarifies “non-entitled” vs “non-existing” credits
July 2, 2025
The 1 July 2025 guidance from the Ministry of Economy and Finance (MEF) clarifies what counts today as a “non-existing” tax credit and as a “non-entitled” credit, how recovery works, and the related penalties. It is an operational piece that brings predictability to audits and taxpayer defence. (MEF guidance 1/7/2025; Leg. Decree No. 87/2024; Leg. Decree No. 74/2000).
The difference, in simple terms.
- “Non-existing” credit: the legal requirements are missing (in whole or in part), or they are created through fraudulent documentation or artifices. In short: the credit does not actually exist. (Leg. Decree No. 87/2024 within Leg. Decree No. 74/2000).
- “Non-entitled” credit: the subsidised activity exists, but the credit is used incorrectly (missing required formalities, exceeding limits, or in the wrong timing/manner) or lacks additional elements required for recognition. (Leg. Decree No. 87/2024 within Leg. Decree No. 74/2000).
The label affects deadlines and sanctions: “non-existing” credits face longer recovery periods and heavier sanctions than “non-entitled” ones; the criminal threshold for undue offset remains €50,000, with different penalties for each case. Recovery rules also cover notification, payment and limitation periods (Presidential Decree, Pres. Decree No. 600/1973, Art. 38-bis; Leg. Decree No. 471/1997; Leg. Decree No. 74/2000).
The guidance explicitly addresses tax credits for research and development, technological innovation, and design and aesthetic innovation, and underscores the value of certification to qualify investments: when properly issued, it binds the tax administration and helps prevent disputes (Decree-Law, Decree-Law No. 73/2022, Art. 23, as converted by Law No. 122/2022).
