Prepared by Carlo Romano, Flaminia Ferrucci and Rubina Fagioli
The law 31 August 2022, n. 130 (hereinafter, “Law”), published in the Official Gazette on 1st September 2022, sets forth new provisions related to the tax justice and the judicial tax proceedings.
Specifically, Article 5 of the Law aims at reducing the burden of the Italian Supreme Court allowing taxpayers to settle the judicial tax proceedings with a low value and where taxpayers have won (also partially) in at least one of the prior instances of the merit.
More precisely, and in brief, pursuant to Article 5 taxpayers can settle the pending judicial tax proceedings in which it has won:
- in both instances of the merit and if the value of the controversies does not exceed 100.000 euro, by paying 5% of their value,
- in one of the two instances of the merit, even partially, if the value of the controversies does not exceed 50.000 euro, by paying 20% of their value.
Therefore, taxpayers cannot settle the judicial tax proceedings in which the Revenue Agency has won in both instances of the merit and the controversies concerning, even just partially:
- traditionally European Union-owned amounts, like those provided by Article 2, paragraph 1, lett. a), of the (UE, Euratom) 2020/2053 Council’s decision of December 14, 2020,
- the value added tax paid on imports,
- recovery of State aids.
One issue arises about the definition of pending proceedings that are eligible to the settlement. Indeed, pursuant to Article 5, paragraph 1 of the Law, the pending judicial tax proceedings that can be settled are those in which the appeals before the Supreme Court have been notified up to July 15th, 2022. Whereas, according to paragraph 4 of the same Article 5, “the pending controversies are those in which the appeals before the Supreme Court have been notified to the counter-party within the date of entry into force of the Law”. Therefore, pursuant to Article 5, paragraph 4, of the Law the judicial tax proceedings that can be settled are those where appeals have been notified within 16 September 2022.
For the purposes of the value of the controversy, paragraph 1 of Article 5 provides that it is necessary to make reference to Article 16, paragraph 3, of Law 289/2002, according to which the value corresponds with the amount of the taxes assessed in the first instance of the merit, without considering the interests and the penalties related to the taxes, even if applied with a separate deed of assessment and without considering eventual reductions obtained in previous merit instances. In case of controversy about the sole penalties, the value of the controversy is determined having regards to the said penalties.
The settlement is completed with the submission of the specific request within 120 days by September 16, 2022, day of entry into force of the Law, and with the payment of the amounts due. If no amounts are due, the settlement is completed with the sole submission of the request. In fact, for the purposes of the settlement any payments already made by the taxpayers during the previous proceedings, are taken into account and taxpayers cannot ask for the refund of the sums already paid, even though they have exceeded those sufficient for the purposes of the settlement. This is the case, for sample, of the taxpayer who has lost in the second instance and has been obliged to pay all the amounts requested by the Revenue Agency, having, therefore, paid more than what theoretically due for the purposes of the settlement (i.e., 20%).
It is irrelevant the nature of the deed appealed in the first instance of the merit, and so it can be represented by a deed of assessment, notice of settlement, or a tax bill.
More detailed instructions related to the procedure of the settlement of the judicial tax proceeding before the Supreme Court will be included in a decree of the Director of the Revenue Agency to be issued in the following days.
For a deeper discussion, please contact:
PwC TLS Avvocati e Commercialisti