ITALY Law and Practice Contributed by: Marco Valdonio and Gabriella Cappelleri, Maisto e Associati
of the auditors. The Report is not enforceable against the taxpayers and does not contain a request for payment of higher taxes and/or pen - alties. Later, the IRA serves the taxpayer with a draft tax assessment (Draft Assessment), which is not enforceable like the Report. To raise an enforceable claim against the tax - payer, the IRA issues a tax assessment notice (the Guardia di Finanza are not entitled to issue tax assessments). Note that, in certain cases, a tax assessment notice could also be issued in the absence of previous audit activity. Before the tax assessment notice is served, the taxpayer has the following options: • to accept wholly (with or without conditions) the content of the Report with a reduction of penalties to ⅙; • to accept wholly or partially the findings of the Report and of the Draft Assessment, spontaneously correct the violations by pay - ing the amount due (higher tax and interest) and the applicable minimum penalty (if any) reduced to 20% ( ravvedimento operoso ), and submit amended tax returns; • to file observations/comments to the com - petent IRA office (the law provides a 60-day freezing period after the issue of the Draft Assessment during which the IRA cannot issue a tax assessment notice to give the tax - payer time to provide observations); and/or • to submit a formal application to start dis - cussions with the competent IRA office to redetermine the findings in a settlement procedure. Based on the Report, the Draft Assessment and taking into account the discussion with, and the observations of, the taxpayer, the competent
office may withdraw/amend the claims or issue the formal tax assessment notice. Once the formal tax assessment notice is served to the taxpayer, the latter has the following options. • Within 15 days from the service date, to submit a formal settlement application to the competent office, which allows the taxpayer and the IRA to discuss the content of the tax assessment notice and to negotiate a reduc - tion/withdrawal of the adjustments raised (note that such alternative is not available if a settlement phase had already taken place before the issue of the tax assessment notice); this application suspends the appeal deadline by 30 days. In the case of a settle - ment, penalties, if any, are reduced to ⅓ of the minimum applicable. If the negotiation fails, the taxpayer can still appeal before the competent First Instance Tax Court no later than the extended Appeal Deadline. • Within 60 days (or 90 days, in case the above application is submitted and related negotia - tion fails) from the service date, file the appeal against the tax assessment notice before the competent First Instance Tax Court. • Accept the claim and pay the relevant amounts within the 60 days; in this case the penalties are reduced to ⅓ of the amount charged in the tax assessment notice. The taxpayer is entitled, before filing the appeal, to pay ⅓ of the penalties indicated in the tax assessment notice, if any, thus reducing the risk of negative litigation. However, if the taxpayer prevails in court, the penalties paid will not be reimbursed. Furthermore, it is worth mentioning that in the event the taxpayer does not submit a settlement
217 CHAMBERS.COM
Powered by FlippingBook