Law No. 136 of 17 December 2018 (hereinafter the “Conversion Law”) which converted Decree Law No. 119 of 23 October 2018 (hereinafter the “Decree Law”), containing, among other things, measures on the subject of so-called fiscal pacification, thus finalizing – inter alia – the provisions set forth in Articles 1, 2 and 6 of the aforementioned Decree, relating to the facilitated settlement of tax disputes.
In particular, the Decree provides for the possibility of settling both (i) tax audit reports and tax assessments, before going in front of the tax court (Articles 1 and 2) and (ii) tax disputes attributed to the tax courts (Article 6).
(i) Settlement of tax audit reports and tax assessments, before going in front of the tax court With reference to the possibility of settling tax audit reports and tax assessments notified to the taxpayer by 24 October 2018, it has been provided that the taxpayer is entitled to settle such a pending position by paying the entire amount of the higher taxes being challenged (relevant penalties and interest are not due).
Tax audit reports may be settled by submitting an application and by paying the amounts due by 31 May 2019.
Tax assessments may be settled by paying the amounts due before they became final.
The due amounts may be paid in installments.
(ii) Settlement of tax disputes attributed to the tax courts Moreover, the possibility of settling tax disputes attributed to the tax courts has been provided for, with reference to all those which are pending at all stages and levels of proceedings, including those in the Supreme Court, when the first instance appeal has been notified by 24 October 2018. Disputes may be settled by submitting an application by 31 May 2019 and by paying the amounts due with respect to taxes, excluding penalties and interest, for an amount equal to the amount of the value of the dispute, having regard to the judgments deposited by 24 October 2018, according to the following terms:
- 100%, in the event the taxpayer loses the case in the last filed judgement,
- 40%, in the event the Italian Revenue Agency loses the judgment at first instance, or
- 15%, in the event the Italian Revenue Agency loses the second-degree decision.
Furthermore, it is possible to settle the litigation by paying:
- an amount equal to 90% of the value of the dispute, in the case of an appeal pending at first instance on 24 October 2018;
- an amount equal to 5% of the value of the dispute in the event of an appeal pending before the Supreme Court on 19 December 2018, where the Italian Revenue Agency has been unsuccessful in the first and second instances.
Moreover, when the Decree was converted into law, it was provided that in the event of partial acceptance of the appeal, or in any case, of a loss shared between the taxpayer and the Revenue Agency, the amount of the taxes net of interest and any eventual penalties are due in full in relation to the part of the act confirmed in the court ruling and to a reduced extent (according to the percentages indicated above), for the part of the tax assessment that was annulled.
In the case of disputes relating only to tax penalties, if these are related to taxes, nothing is due if the dispute relevant to the related taxes has been settled. If, on the other hand, the dispute concerns only penalties not linked to taxes, the definition is perfected by the payment of penalties reduced to:
- 15%, in the event the Italian Revenue Agency loses its case in the last or only non-custodial judicial decision, pronounced by the date of entry into force of the Decree;
- 40% in all other cases.
The amounts listed above are due net of payments already made for the pending judgment and may be paid in installments.