Prepared by Carlo Romano, Valentino Guarini and Daniele Conti
The increasing infections with novel coronavirus SARS-CoV-2, causing the COVID-19, and the subsequent adoption of high restrictions for economic activities and individuals’ freedoms of movement have obviously affected even the performance of public bodies, including on tax authorities’ rulings requested by taxpayers as well as on the assessment and collection of taxes.
In pursuance of the measures referred to in the decree-law 17 March 2020, no. 18, the Revenue Agency published three circular letters aimed at expressing its own position as to certain issues governed by the aforementioned decree.
Handling of tax ruling requests
Article 67 of the decree provides, inter alia, for the suspension from March 8th to May 31st of the deadlines for issuing tax rulings, also where additional documentation has been requested to the taxpayer.
In this regard, by means of circular letter 20 March 2020, no. 4/E, Revenue Agency meant to and instruct, and clarify for the benefit of, local directorates. First of all, it should be noted that the suspension of deadlines is also applicable to (i) rulings on new investments, (ii) rulings within the cooperative compliance regime and (iii) include missing requirements in requests deemed insufficient (e.g. due to failed identification of the type of ruling requested, or of the legal provisions for which interpretation, application or disapplication is requested, or in case the proposed solution or the address and contact details are lacking).
The suspension is also concerned with the deadlines for taxpayers to respond to the Revenue Agency’s requests (for instance, for the inclusion of missing requirements in the submitted ruling requests or for supplementary documentation).
From a practical standpoint, the residual available time for the Revenue Agency and for any fulfillment by the requesting applicants will be running again from June 1st.
In any case, in the meantime, the Revenue Agency will still be able to continue to receive requests for rulings and legal opinions, which, as already established by the decree, will be received electronically. Furthermore, as specified in the circular and compatibly with the ongoing emergency, the competent offices of the Revenue Agency will keep on working on the requests for rulings. In this regard, the previous urgent directives of the same Revenue Agency deemed non-deferrable the sole rulings subject to close deadlines and until such deadlines would have not been expressly suspended by the law (namely, by Article 67 of the decree at hand). Such newly issued circular letter no longer distinguishes between closely expiring rulings or not, as the Revenue Agency offices could work all the files upon taking appropriate organizational measures.
Of course, as mentioned in the circular letter, the Revenue Agency will not be able to access the companies’ premises in light of the particular ongoing emergency, that is the rationale underlying the same decree-law.
Circular letter no. 4/E, recalling article 67 of the decree-law, also highlights the suspension of:
- 120-day deadline for the conclusion of the preliminary admission procedure into cooperative compliance regime;
- 180-day deadline for the conclusion of the preliminary investigation related to the enhanced cooperation regime.
Beside the above, Article 67 also provides for the suspension of the deadlines related to advance pricing agreements (APA), transfer pricing corresponding adjustments and patent box applications.
However, we are aware that the officers of the Revenue Agency are still performing the activities related to the lastly mentioned procedures.
Payments due based on enforceable assessments
In the event of appeals before tax courts against deeds of assessment concerned with income taxes or VAT, Italian law provides for partial payment of the assessed amounts. Those deeds also allow the collection of assessed taxes (so-called enforceable assessments). With respect to the amounts due pending the firs-tier court proceedings, the law stipulates that the payment (ordinarily to the extent of one third of taxes and interest only) must be made within the deadline for the appeal (see Article 29 of decree-law 31 May 2010, no.78).
However, the suspension of the deadline for the appeal, expressly set forth by Article 83, paragraph 2, last part, of the decree-law of 17 March 2020, n. 18, entails also the suspension of deadlines for the payment of the amounts resulting from the enforceable assessment.
This is, in a nutshell, the clarification in the circular letter 20 March 2020, no. 5/E, of the Revenue Agency. From a practical standpoint, the deadline for the enforcement of the deeds of assessment at stake is suspended between March 9th and April 15th, 2020.
Obviously, the payment deadline is suspended also in case the amounts resulting from enforceable deeds of assessment are already entrusted with the collection agent, pursuant to Article 68 of the same decree-law. In such circumstances, the suspension operates in relation to the payments expiring from March 8th to May 31st, 2020. Despite the lack of express statements in the circular letter, even the payment demands related to the amounts resulting from the outcome of tax courts’ proceedings should benefit from the same suspension, therefore postponing the related payment to June.
As to the motions for preliminary injunction filed with tax courts, such as the motions for suspension of the collection of assessed taxes, we are aware that each tax court is setting out autonomous and internal rules for deciding those requests, in the context of article 83, paragraphs 1 and 3, of the decree-law. Therefore, we suggest to check the status of those proceedings with the appointed professional therein.
Settlement procedures
As well known, the filing of a request for settlement subsequent to the issuance of a deed of assessment suspends the deadlines for the latter to be appealed for 90 days. The rationale behind such rule is to allow the taxpayer and the Revenue Agency to agree on a solution of the tax claim (Article 6, paragraph 3, of legislative decree 19 June 1997, no. 218).
Decree-law 17 March 2020, n. 18, does not clarify whether the different rules on suspension of the deadlines thereby set forth are also applicable to the described settlement scenario.
Certain authors have highlighted this textual deficiency, trying to bridge the literal gap from an interpretative point of view, weighing respectively the administrative nature of the settlement procedure and the court litigation-related character of the deadline affected by the 90-day period for settlement.
Circular letter 23 March 2020, no. 6/E, did not take a clear position from a general point of view; however, it deems applicable the sole suspension of deadlines for appeals before courts rather than the suspension binding the tax authorities’ performance. The consequence is that of a suspension until April 15th (Article 83 on deadlines for court proceedings and appeals) and not until May 31st (Article 67 on the activities of the tax authorities, including tax assessment).
Beyond the natural doubts arising from such an approach, clearly according to the Revenue Agency the deadline for appeals before first-tier tax courts, i.e. normally 60 days following the notification of the deed of assessment, may benefit jointly from two suspensions:
- 90 days aimed at the conclusion of the settlement procedure initiated following the notification of the deed of assessment;
- from March 9th to April 15th, based on Article 83 of the decree-law, as interpreted by circular letter no. 6/E at hand.
Assuming the case of a deed of assessment served to the taxpayer on January 24th, 2020 and of a request for settlement submitted in the following days, the deadline for the appeal would expire 188 days later, i.e. on July 30th.
For deeds of assessment served from January 27th onwards, the additional impact of the court holiday period (which entails a corresponding deadline suspension) needs to be assessed.
Lastly, the circular letter outlines the procedures for initiating and managing the settlement procedure in general terms during the emergency period, preferring remote interactions through phone calls or videoconferencing, while communications and minutes are preferably made via certified email.
Furthermore, the Agency seems to prefer such remote interactions also in other scenarios where the participation or consent of the taxpayer is required. There is no further clarification or example in this regard, but one could easily refer to all those assessment procedures where the taxpayer shall be heard within the same preliminary investigation and in advance to any tax deed, e.g. in anti-abuse controversy pursuant to Article 10-bis of law 27 July 2000, no. 212 (statute of taxpayer’s rights).
There is one further position expressed by the Revenue Agency, namely in relation to the 20-day deadline for the payments due under the deed of settlement (executing the settlement itself): according to the said circular letter no. 6/E, such deadline does not benefit from any suspension in light of the decree-law at hand. Of course, such clarification is given by the Revenue Agency without prejudice to the still applicable rules concerned with taxpayers who, as of February 21st, had their tax domicile, registered or operative headquarters within the municipalities comprised by the initial “red zone” established by the Prime Minister’s Decree 1 March 2020.
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