Extraordinary measures to minimize the impact of the COVID-19 emergency have been recently approved by the Italian government (see Law Decree No. 18 dated 17 March 2020). Some of those measures may have a significant impact on tax litigation activities in a broad sense (i.e., activities connected, but not limited, to judicial proceedings).
The scope of the measures is to facilitate both taxpayers and the Italian Tax Administration to navigate through the ongoing sanitary emergency, by providing an automatic hypothesis of suspension/postponement of the deadlines to which they are usually subject. The suspension/postponement, which will be better described below, could be briefly grouped as follows:
- suspension of certain tax obligations / tax payments, without the application of administrative penalties (ref. articles 62 and 68);
- suspension of tax audit and tax assessment activities, as well as the deadlines for the Tax Office to reply to tax rulings requests and automatic extension of the deadline for the Tax Office to issue tax assessments for FY 2015 (and FY 2014, should the taxpayer have omitted to file the relevant tax return) (ref. articles 67);
- suspension of the deadlines for filing appeals before provincial and regional tax courts and the Italian Supreme Court, postponement of the deadlines for filing final briefs and automatic postponement of the hearings (ref. article 83);
- suspension of the deadlines connected to the pending administrative procedures (albeit mandatory) (ref. article 103).
The law decree is immediately effective but has to be converted into law within 60 days of its approval (i.e., before 16 May 2020), so that some amendments may intervene. As of today, some amendments to the measures concerning the tax litigation activities have already been approved and will be commented on below.
Suspension of tax and contribution obligations and tax payments – Article 62
- For taxpayers having their fiscal domicile, legal seat or place of business in the Italian territory, all tax obligations expiring between 8 March and 31 May 2020 are suspended with the sole exception of: (i) payments, (ii) applications of withholding taxes, including those related to the additional regional and municipal taxes, and (ii) filing of pre-filled tax returns for FY 2020 which falls under a specific law provision (see Article 1 of Law Decree No. 9 dated 2 March 2020). Such tax obligations shall be carried out by 30 June 2020, without the application of penalties.
The following payments, expiring between 8 March 2020 and 31 March 2020, which should be made by corporate entities or professionals, having their fiscal domicile, legal seat or place of business in the Italian territory and whose revenues or fees for FY 2019 do not exceed EUR 2 million, are automatically suspended:
- deductions at source of income from employment;
- social security contributions and mandatory insurance premiums.
Such payments shall be made in the full amount by 31 May 2020, without interest and penalties, or in a maximum of five monthly instalments. The amounts already paid cannot be refunded.
With specific reference to VAT payments of taxpayers having their fiscal domicile, legal seat or place of business in Bergamo, Cremona, Lodi and Piacenza provinces, the suspension shall apply regardless of the thresholds mentioned above.
Such payments shall be made by 31 May 2020, without interest and penalties, in their full amount or in a maximum of five monthly instalments. The amounts already paid cannot be refunded.
With specific reference to taxpayers having their fiscal domicile, legal seat or place of business in Bertonico, Casalpusterlengo, Castelgerundo, Castiglione D’Adda, Codogno, Fombio, Maleo, San Fiorano, Somaglia, Terranova dei Passerini and Vo’:
- tax payments and tax obligations expiring between 21 February 2020 and 31 March 2020 are suspended;
- deductions at source of income from employment are suspended.
Such payments shall be made and such obligations shall be fulfilled by 31 May 2020, without interest and penalties, in their full amount or in a maximum of five monthly instalments. The amounts already paid cannot be refunded.
- Withholding taxes on self-employment incomes shall not apply for taxpayers having their fiscal domicile, legal seat or place of business in the Italian territory and whose revenues or fees for FY 2019 do not exceed EUR 400,000, not having incurred any costs for employees in February 2020. In order to take advantage of this option, taxpayers shall issue a specific statement and shall pay the amount of withholding taxes not applied by the withholding agent by 31 May 2020, in full or in a maximum of five installments, without interest and penalties.
Suspension of Italian Tax Authority activities – Article 67
- Deadlines concerning tax audits, assessments, collection and litigation activities to be carried out by the Italian Tax Authority are suspended from 8 March 2020 to 31 May 2020 (with the exclusion of audit activities concerning formal violations, as clarified by the Explanatory Notes to the Law Decree).
- For the same period of time, the terms within which the Italian Tax Authority shall provide taxpayers with a reply to tax rulings requests filed according to article 11 of Law No. 212/2000 are suspended.
- For the same period of time, the terms for the Tax Office to reply to the taxpayer’s request under the cooperative compliance regime according to art. 6 of Legislative Decree no. 128/2015, the terms for the Tax Office to reply to tax rulings on new investments according to art. 2 of Legislative Decree no. 147/2015, the terms relating to the request to access the cooperation and collaboration procedure according to art. 1-bis of Law Decree no. 50/2017, the terms relating to the request for advanced ruling agreement for companies with international activity according to art. 31-ter of Presidential Decree no 600/1973, the terms relating to requests for secondary adjustment on incomes deriving from transactions between affiliated companies with international activity according to art. 31-quater of Presidential Decree no. 600/1973 and the terms of the so-called “Patent Box” procedures according to art. 1, par. 37-43, of Law no. 190/2014, are suspended.
- For the period of suspension, the above-mentioned applications may be submitted only by electronic forms, using certified email (i.e., pec).
- Statute of limitation for the activities of the Revenue Agency are automatically extended by two years, pursuant to article 12 of Legislative Decree No. 159 of 24 September 2015. Therefore, tax assessments concerning FY 2015 will expire on 31 December 2022 instead of 31 December 2020. Also FY 2014 will be included in the extension mentioned above, only in the case of omitted filing of the relevant tax return.
Suspension of the notice of payments issued by the Collector Agents – Article 68
- The terms for paying tax amounts indicated in: (i) notice of payments issued by the Collector Agent, (ii) tax assessment immediately effective issued by the Italian Revenue Agency, Customs Authorities and Local Authorities, (iii) debit notices issued by the social security institutions and (iv) injunctions of the Local Authorities, expiring between 8 March 2020 and 31 May 2020, are automatically suspended and shall be made in full by 30 June 2020. The amounts already paid cannot be refunded. The law decree does not take a clear position on the application of interests and penalties. However, based on its ratio, we may assume that they do not apply.
- Furthermore, the deadline for the payment of the amounts due under the so-called "rottamazione-ter" (expiring on 28 February 2020) and / or the so-called "Saldo e Stralcio" (expiring on 31 March 2020), are postponed to 31 May 2020.
- The notifications of write-offs in respect of the instalments entrusted to Collector Agents falling due in 2018, 2019 and 2020 must be made by 31 December 2023, 31 December 2024 and 31 December 2025 respectively.
Mention for the waiver of suspension – Article 71
Taxpayers that decide not to benefit from the automatic suspensions provided by one or more of the provisions mentioned above, will be mentioned in the official website of the Ministry of Economy and Finances, in order to obtain a reputational advantage.
Suspension of the terms related to tax litigation proceedings – Article 83
- The hearings of pending tax litigation proceedings falling between 9 March 2020 and 15 April 2020, shall be postponed and rescheduled after 15 April 2020.
The present article provides also for a suspension until 15 April 2020 of the following judicial activities:
- notification of appeals against any act falling within the jurisdiction of the provincial tax courts, including those subject to a mandatory attempt to reach a settlement pursuant to article 17-bis, paragraph 2 of Legislative Decree No. 546/1992;
- notification of appeals against the tax court's decisions (the text of the law decree is not straightforward on this. However, this interpretation is the sole in line with the ratio legis);
- term for the issuance of any kind of tax court's decisions;
- any other deadline related to judicial proceedings already pending or to be started before provincial and regional tax courts, falling between 9 March 2020 and 15 April 2020.
- Should one of the deadlines mentioned above start to run in the time-frame between 9 March 2020 and 15 April 2020, it will be considered as running as of 15 April 2020. While, in case of looking-back deadlines falling (entirely or partially) in the time-frame between 9 March 2020 and 15 April 2020, the relevant hearing will be postponed in order to grant that such deadline will expire after 15 April 2020.
- In addition, the heads of judicial offices have the possibility to adopt measures aimed at minimizing the risks arising from the epidemiological emergency, such as the limitation of physical access to tax courts, the pleading of the hearings remotely, the payment of the courts stamp and the filing of court's briefs by electronic means only.
Suspension of the terms related to the pending administrative procedures – Article 103
- Deadlines connected to administrative procedures (albeit mandatory) pending as at 23 February 2020 or started after 23 February 2020 are automatically suspended for a time-frame running from 23 February 2020 and until 15 April 2020. Also the 90-days term for the deemed negative answers to the requests of refund filed by the taxpayers follow in the present provision.
- In particular, this provision is aimed at avoiding the creation of delays or “meaningful” silence in the activities of the Public Administration.