October 25, 2021

Desk Solver

Business The Problem Solver

Snapshot: tax litigation in Italy

Court docket actions

Skilled courts

Which courts have jurisdiction to listen to tax disputes?

As a basic rule, the tax courts have jurisdiction more than all tax disputes. Tax litigations are aimed at verifying the procedural legality of the see of evaluation and the substantive legality of the tax obligation. Disputes relating to acts of enforcement subsequent notification of the discover of payment are excluded from the jurisdiction of the tax courts. The only enforcement matters that are heard prior to the tax courts are disputes concerning the executive suitable for the selection of taxes.

The tax courts are:

  • the provincial tax court (to start with instance) of the territory wherever the tax office issuing the challenged deed is situated
  • the regional tax court (second instance), which can overrule judgments issued by the provincial tax courts found in the appropriate location and
  • the Supreme Court docket (3rd and final occasion), which procedures on choices issued by the regional tax court docket, but only on authorized grounds.

Lodging a claim

How can tax disputes be brought ahead of the courts?

Report 19 of Legislative Decree No. 546/1992 provides a list of challengeable deeds. These consist of:

  • notices of assessment
  • deeds furnishing for the application of monetary penalties
  • notices of payment
  • registrations of mortgages on genuine estate belongings
  • deeds connected to cadastral skills
  • denials of tax refunds, penalties and interests not thanks and
  • the denial or revocation of added benefits.

 

Litigation is initiated by filing an charm which must incorporate:

  • the indication of the provincial tax court docket to which the charm is submitted
  • the identification of the taxpayer and his, her or its authorized consultant
  • the taxpayer’s residence or registered business office or domicile
  • the indication of the tax workplace from which the appeal is filed and
  • the matter make any difference of the charm, and the grounds of the appeal.

 

In specific, the subject matter matter of the charm is made up of two components: petitum (the declare submitted with the tax court) and causa petendi (the grounds in guidance of the claim).

The charm should be served to the tax workplace that has issued the deed currently being appealed and submitted in advance of the provincial tax courtroom. The notification of the attraction must manifest by means of certified electronic mail.

The enchantment should be served inside of 60 days of the provider of the deed getting appealed. The taxpayer will have to, within just 30 times of the day on which the attraction was served to the counterparty, file the attractiveness on the web working with the SIGIT program (Tax Courtroom Data Procedure) with the capable provincial tax court, alongside with supporting documentation.

Following an enchantment has been submitted, the provincial tax courtroom verifies that the tax due for the participation in tax court litigation has been paid out (Tax Court docket Payment, or just Slash). Lower is only paid at the time, and there is no price tag for the subsequent submitting of briefs and documents. The amount of money of the Minimize is dependent upon the worth at stake in the dispute. The greatest amount is €1,500.

There is no minimum amount threshold amount for pleasing. However, for deeds issued by the Italian Earnings Company claiming a lot less than €50,000 of taxes, taxpayers who intend to attractiveness need to submit an software for tax mediation.

Mixture of promises

Can tax claims affecting various tax returns or taxpayers be introduced alongside one another?

On the foundation of the case regulation of the Italian Supreme Court, it is attainable to file a solitary charm about several notices of evaluation or diverse persons only if the challenged obligation to pay back taxes is the same.

Pre-claim payments

Must the taxpayer fork out the quantities in dispute into courtroom prior to bringing a assert?

The submitting of the charm does not, per se, interrupt the selection treatments.

If the taxpayer information an charm ahead of the provincial tax court, the Italian Earnings Agency can ask for the payment of 1-3rd of the assessed tax additionally interest (but no penalties), though the litigation is pending just before the to start with instance court.

If the initially occasion judgment is good for the taxpayer, he, she or it has the right to be reimbursed of the interim payment.

In the reverse scenario, pending the litigation prior to the regional tax court, the taxpayer is asked for to pay up to two-thirds of the taxes assessed and relevant desire and penalties.

Further more to the detrimental choice of the regional tax court docket, all the remaining amount of money because of have to be paid out.

To prevent these interim payments, the taxpayer can question the courts of initially or next occasion (even even more to the enchantment prior to the Supreme Courtroom) to hold off the assessment enforcement. The tax court will buy a suspension where the payment may result in severe harm to the taxpayer (periculum in mora) and the attraction appears to be nicely-grounded (fumus boni juris).

Cost restoration

To what extent can the charges of a dispute be recovered?

In tax litigations, the tax courtroom shall demand the unsuccessful occasion to bear the prices of litigation.

Beneath short article 15(2) of Decree No. 546/1992, the prices of litigation can be (fully or partly) allocated equally only if equally get-togethers eliminate the lawsuit or for serious and excellent factors, to be exclusively described in the judgment.

Third-get together funding

Are there any limitations on or principles relating to 3rd-social gathering funding or insurance policy for the expenditures of a tax dispute, which include bringing a tax declare to courtroom?

No.

Courtroom choice maker

Who is the selection maker in the court? Is a jury demo obtainable to hear tax disputes?

The provincial and regional tax courts are built up of a panel of a few judges.

Tax concerns are ruled by the Fifth Chamber of the Supreme Courtroom, which is manufactured up of a panel of 5 judges.

There is no jury trial in tax disputes.

Time frames

What are the regular time frames for tax trials?

From the filing of the charm in advance of the provincial tax court to the suitable judgment: approximately one particular year.

From the filing of the attractiveness before the regional tax courtroom to the pertinent judgment: around one year.

From the submitting of the appeal prior to the Supreme Court to the appropriate judgment: around five years (more time time frames are generally experienced).

Disclosure necessities

What are the specifications concerning disclosure or a responsibility to existing facts for trial?

Tax courts have the power to access and request data relating to the specifics submitted by the functions. However, judges can’t oblige the get-togethers to post documents that they consider vital to achieve a conclusion.

The parties can post paperwork to guidance their arguments within just 20 no cost calendar days ahead of the day of the hearing.

Permitted proof

What proof is permitted in a tax demo?

Only documentary evidence is permitted in a tax demo.

Confessions and witness testimony are not admissible in a tax trial.

Witness testimony excludes third parties’ recorded statements in the Tax Police’s minutes or the tax authority’s audit reports. This kind of indirect evidence can be utilized in judicial conclusions so prolonged as they are not the sole foundation for the conclusion. Constant case legislation has frequently taken this placement.

For advanced issues, the tax courts may ask for technical suggestions from the Italian Revenue Agency or public administrations. On the other hand, specialists can not testify, but just provide for penned studies.

Similarly, the judge could request entry to inspections, facts, information and technological reviews from community administrations guidance.

There is no provision for translation of evidence.

Permitted illustration

Who can characterize taxpayers in a tax trial? Who signifies the tax authority?

In tax litigations, the taxpayer have to appoint a professional authorized counsel who is authorised to represent consumers in proceedings before the tax courts.

The taxpayer may surface without legal representation if they are folks entitled to support ahead of the tax courts or if the volume in dispute is fewer than €3,000.

The Italian Income Agency is represented in the proceedings by its individual officers or by the condition attorney’s.

Publicity of proceedings

Are tax trial proceedings public?

Even if tax litigations in Italy are held without the existence of the get-togethers or their authorized counsel, the events may possibly ask for to be authorized to illustrate their arguments orally. In certain, just about every occasion may well file a request for general public listening to to be served on the other social gathering and filed with the tax court docket inside 10 cost-free calendar days before the hearing date.

As a consequence of the coronavirus emergency, exactly where community hearing can not be undertaken, there is the possibility to ask for for a remote listening to by means of Skype for Organization software.

Burden of proof

Who has the burden of proof in a tax demo?

Frequently, the load of proof in tax litigation rests with the Italian Revenue Agency issuing the detect of assessment.

Nonetheless, where by a unique presumption is mandated by legislation, or when the proof is considerably nearer to the taxpayer (eg, deductibility of expenditures), the load of proof is on the taxpayer.

Circumstance administration course of action

Describe the circumstance administration approach for a tax demo.

The briefing method is as follows:

  • inside of 60 days from the notification of the observe of assessment, the attraction ought to be submitted
  • within 30 days from the notification of the appeal, taxpayers must file the charm and submit the documentation ahead of the tax courtroom
  • inside of 60 days from the notification of the appeal, the Earnings Company will have to file its reply and develop the documentation prior to the tax court (the Italian Revenue Company may well also surface immediately in advance of the tax court all through the community listening to)
  • if asked for, the hearing for the suspension of the notice of evaluation is scheduled by the tax courtroom
  • if requested, the community hearing is scheduled by the tax court
  • inside of 20 no cost calendar days before the day of the hearing, get-togethers can file other paperwork
  • in 10 totally free calendar times in advance of the date of the listening to, get-togethers can file replies and
  • soon after the listening to, the tax court docket problems its choice (there is no deadline).

Enchantment

Can a courtroom selection be appealed? If so, on what basis?

The enchantment in advance of the regional tax courts need to be submitted within 60 days of obtaining notification of the provincial tax court’s judgment. If there is no notification of the judgment, the enchantment ahead of the regional tax courts could be filed within 6 months of the filing of the judgment.

There are several demands for appeals before the regional tax court docket. These incorporate: a summary of the proceedings, the matter issue of the enchantment and the distinct grounds for charm. Like the attractiveness right before the provincial tax court, the charm prior to the regional tax courtroom should comprise the two a petitum and a causa petendi.

The appellant may possibly not propose requests that have not been submitted in the litigations of initially occasion. Memoranda and files obtained for the duration of the litigation right before the provincial tax court are routinely submitted to the regional tax court for critique. Concerns and objections that are not lifted in the proceedings of second instance are routinely waived.

The regional tax court’s judgment might be appealed right before the Supreme Courtroom, solely on legal grounds.

An charm ahead of the Supreme Court could be proposed on the following grounds:

  • jurisdiction
  • violations of guidelines relating to territorial jurisdiction
  • violation and misapplication of principles of legislation
  • invalidity of the selection or of the proceedings and
  • a lack of examination on a decisive point of the dispute.

 

The charm right before the Supreme Courtroom will have to be submitted within 60 times of the notification of the regional tax court’s judgment. If there is no detect, the enchantment may perhaps be submitted with the Supreme Court docket inside six months of the filing of the regional tax court’s judgment.