Edited by Energy team
On June 27, the Constitutional Court published the Decision no. 111/2024, regarding the legitimacy of the Energy Windfall Tax provided for by Article 37 of Decree-Law no. 21 of March 21, 2022, converted, with amendments, into Law no. 51 of May 20, 2022.
Such Tax – which targeted entities that produce, import, distribute, or sell electricity, natural gas, or petroleum products – was applied (under certain conditions) to the difference (if positive) between the output and input transactions carried out for VAT purposes during the period 1 October 2021 and 30 April 2022 compared to the period between 1 October 2020 and 30 April 2021.
The purpose of this Windfall Tax was to target the alleged extra profits deriving from the anomalous trend in the prices of energy products, recorded in 2022.
The Constitutional Court confirmed the legitimacy of the Energy Windfall Tax 2022 but stated that the inclusion of excise duties in the taxable base of the Windfall Tax is in breach of the principles set forth by Articles 3 and 53 of the Italian Constitution.
Firstly, because excise duties cannot represent an increase in “tax capacity” for operators who charged such duties to final consumers in their invoices, because then such charges have to be repaid to the Tax Authorities.
In the second instance, including the excise duties in the taxable base of the Windfall Tax results in a discrimination among the taxpayers subject to the Tax at hand: in fact only those taxpayers who charge the excise duties on goods released for consumption include these charges in their sales invoices. This circumstance triggers a distortive effect compared to those operators who are allowed to transfer goods under suspension of excise duty.
In light of the principles held by the Constitutional Court, those taxpayers who have carried out sales subject to excise duties should be allowed to ask for a partial refund of the tax at hand.
Let’s Talk
For more information