An end to a long-standing issue of overdue debts that have been repeatedly recycled in the lists published by the Independent Authority for Public Revenues (AADE) may finally be near. A new provision, included in the draft law on the new Customs Code currently under consultation, aims to radically change how unrecoverable debts are classified, paving the way for AADE to clear a multi-billion-euro portfolio.
The regulation does not amend the core law of the Public Revenue Collection Code but introduces significant administrative improvements—tightening criteria, speeding up procedures, and expanding the responsibilities of AADE officials regarding debt classification.
According to official sources, the goal is to substantially reduce the amount of ‘dead’ debt exceeding €26 billion by prioritizing the collection of more recent and realistically recoverable debts.
Under the new process, old debts are evaluated based on their age, starting with the oldest. The assessment focuses on the debtor’s assets. A debt can be marked as unrecoverable if the total value of real estate (and related rights) does not exceed 5% of the debt amount or €100,000, according to valuation or property tax records. If the asset value exceeds €100,000, then twice this amount is subtracted from the debt before determining its recoverability.
Regarding movable assets such as bank accounts or vehicles, the total value should not exceed €30,000. If it does, again, double the asset value is deducted from the debt.
Special cases include deceased debtors with no heirs or assets, and businesses declared bankrupt more than ten years ago, who can immediately enter the debt freeze process.
Additionally, the authority thresholds have increased: Heads of Tax Offices and Customs can now handle cases up to €300,000, while larger amounts require approval from the Director of AADE.
The framework also includes the publication of major debtors with obligations over €150,000, along with prioritization of active cases. According to sources, more efficient operations within the tax administration will support increased collections and relieve AADE from the burden of managing old, uncollectible debts.