Factual assessment in criminal proceedings bind the tax courts (Supreme Court, order n. 25632/2021)

Prepared by Carlo Romano, Marco Longobardi and Giulia Faustini

On 22nd of September last, Italian Supreme Court ruled on the binding nature of a criminal judgement of acquittal in tax proceedings concerning the same facts (order no. 25632/2021), highlighting two important and closely connected issues: on the one hand, the fact that an external judgment is not subject to any procedural preclusion; on the other hand, more generally, the fact that the assessment on the same facts made in criminal proceedings is binding on the tax judge’s decision.

The case and the grounds of the appeal filed before the Supreme Court

In the case at stake, Italian Revenue Agency issued five notices of assessment (following tax audits concluded by the Tax Police by means of a Tax Audit Report), increasing the income, for CIT purposes, declared by a company for fiscal years 1983 to 1987. This company, after having lost in the first instance before the Tax Court of Bolzano, filed an appeal before the Tax Court of second instance, submitting (with the filing of an explanatory memoranda) the final criminal judgement with which the criminal judge had decided for acquittal (of the company’s legal representative) with reference to the same facts discussed in the tax proceedings at stake. In this regard, the second instance Tax Court upheld the taxpayer’s appeal, stating that the criminal judgment (that was favourable in that case) should also be extended to the tax proceedings concerning the same facts. Therefore the Italian Revenue Agency filed an appeal before the Italian Supreme Court, claiming: 1) the nullity of the judgment due to the apparent explanation, since it was not possible to identify the ratio decidendi; 2) the violation of the principle of correspondence between requested and pronounced, since the judges based their decision on a judgment (the criminal one) produced before the hearing (with the filing of the final briefs); 3) the violation of Article 654 of the Code of Criminal Procedure and of Article 7 of Legislative Decree 546/1992, since, specifically, the criminal judgment could not be effective against the Revenue Agency which had not participated in the proceedings in which the judgment was issued and, more generally, since “the binding effect of the criminal judgment could never automatically operate in tax proceedings”.

The analysis developed by the Supreme Court

The judges of legitimacy defined the issue to the “importance to be assigned to the criminal judgment in the course of the tax proceedings”. Firstly, the Supreme Court ruled on the timeliness of the production of the judgment (which took place “almost at the end of the second instance proceeding”), in accordance with the now well-established rule that “the objection regarding the external judgement is not subject to preclusion as regards its allegation in the proceedings on the merits, since it does not depend on any dispositional will of the party and, in view of its public importance, can be detected ex officio” (Supreme Court no. 48/2021; in accordance with judgement no. 27161/2018).

According to the settled case-law orientation, the assessment of external (as well as internal) judgement is not subject to the procedural foreclosures, since such a judgment serves to remove situations of uncertainty and, therefore, the court is always required to detect its existence, also ex officio, not being bonded, for this purpose, by the position taken by the parties in the proceedings.

The Supreme Court’s decision

The order in question has the merit of pointing out that the factual assessment made by the criminal judges with a final judgment seems to be sufficient to bind the tax judges and is not subject to procedural foreclosures, if carried out in a “critical” manner. In fact, an acquittal is effective in tax matters if the Tax Court carries out an explicit and not uncritical assessment on the same facts analysed by in the criminal proceeding. In the case at stake, the Italian Revenue Agency did not claim this circumstance nor proved that the facts on which the assessments (both criminal and tax) were based were distinct from each other. Well, with reference to the apparent lack of argumentation objected by the Revenue Agency, the judges of legitimacy confirmed the decision of the Tax Court of second instance since: a) there is an explicit reference to the assessment made by the judges of appeal according to which “the facts disputed by the Tax Police are the same as those on which the criminal judge ruled for the acquittal with the formula «because the fact does not exist»”; b) the Revenue Agency did not produce any contrary evidence on any difference between the facts ascertained in criminal and tax proceedings.


The Supreme Court, in its decision no. 25632/2021, has ruled that a criminal acquittal is fully effective in tax proceedings if the facts alleged in both proceedings (criminal and tax) are the same (in the same sense: Supreme Court order no. 30941/2019 and no. 16262/2017). For the sake of completeness, it should be noted that the Supreme Court itself – in a more extensive manner – has previously ruled that an irrevocable criminal judgment of acquittal from tax offences issued with the formula “because the fact does not exist” does not automatically give rise to a final judgment in tax proceedings even if the facts ascertained are the same. Indeed, such judgment of acquittal must be considered as a “possible” source of evidence and the “tax judge, in exercising his powers of assessment, must verify its relevance in the specific context in which such decision is intended to operate” (Supreme Court Order no. 34219/2019, in accordance with Order no. 17258/2019 and Sentence no. 10578/2015). Finally, it should be noted that tax audits and tax assessments often originate from the same facts alleged in criminal proceedings and “transposed” to tax proceedings by referring to minutes or interviews or general information acquired in criminal proceedings. Well, the difficulty for the taxpayer to defend himself in tax proceedings if he has not had access (or has had limited access) to such information, would certainly be mitigated if – as represented in the order at stake- the criminal ruling of acquittal might have binding effect in tax proceedings concerning the same facts assessed in the criminal proceeding (even without the assessment of additional evidence). This should also be the case if a criminal dismissal order is issued, obviously, in relation to the same facts that are the subject matter of the tax proceedings, since in many circumstances it is not possible to agree with the jurisprudential orientation according to which the decision to dismiss a criminal case does not prevent the same fact from being defined, assessed and qualified differently by the civil or tax court, especially in view of the aberrant effects to which the now anachronistic and inefficient double track system can lead.

In the light of the above, a clarification by the Joint Sections of the Italian Supreme Court would be desirable in order to define the extensibility of the effects of the criminal dismissal order in the tax proceedings if the facts of the case are the same, as confirmed by the Supreme Court, most recently, in Order No. 25632/2021.

Let’s Talk

For a deeper discussion, please contact:

Carlo Romano

PwC TLS Avvocati e Commercialisti


Marco Longobardi

PwC TLS Avvocati e Commercialisti