ITALY Law and Practice Contributed by: Marco Valdonio and Gabriella Cappelleri, Maisto e Associati
application but only submits observations, this would always be without prejudice to the pos - sibility of the parties initiating, by mutual agree - ment, the settlement procedure, where the pre - requisites for a settlement emerge as a result of the observations. Tax Litigation Procedure The First Instance Tax Court schedules a hear - ing; the taxpayer is entitled to file additional doc - umentation and briefs before the Court within certain time limits. Pending the appeal, the taxpayer is still in a posi - tion to negotiate a settlement with the compe - tent IRA office, which must be concluded within the date scheduled for the first hearing before the First Instance Tax Court. If the negotiation is successful, the penalties, if any, are reduced to 40% of the minimum applicable. The decision issued by the First Instance Tax Court may be appealed both by the IRA Office and by the taxpayer before the competent Sec - ond Instance Tax Court. Pending the second instance procedure, the taxpayer may further negotiate a settlement (if the negotiation is suc - cessful, the penalties, if any, are reduced to 50% of the minimum applicable). The decision issued by the Second Instance Tax Court may be appealed by both parties before the Supreme Court but only for reasons based on violation of legal provisions (ie, generally, factual circum - stances and amounts cannot be challenged). Starting from 2024, pending the Supreme Court litigation, the taxpayer may further negotiate a settlement (if the negotiation is successful, the penalties, if any, are reduced to 60% of the minimum applicable amounts). It is possible that the Supreme Court, rather than issuing a final judgment, will refer the case back to a different chamber of the Tax Court that issued the deci -
sion (generally the Second Instance Tax Court), so that the litigation process can continue. Provisional Collection Pending Litigation The tax assessment notice containing a transfer pricing claim is enforceable (ie, the taxpayer has to pay on a provisional basis, as a rule, ⅓ of the higher taxes assessed and interest pending tax litigation within the appeal deadline, as possibly extended if a settlement application is filed). Under motivated and exceptional circumstanc - es, the IRA can decide on provisional collection for the full amount of the assessment. If the taxpayer does not pay within the above- mentioned deadline, the IRA will instruct the col - lection agent to start the collection procedure (the collection procedure cannot generally be started in the 30 days following the filing of the appeal). After this 30-day period, “grace” period of 180 days is in any case granted under law to all taxpayers. The suspension is not granted in the case of precautionary measures (eg, seizure of assets) and when the IRA Office claims that the collection is at risk. After the First Instance Tax Court decision, to the extent unfavourable for the taxpayer, the col - lection agent can collect up to ⅔ of the higher taxes and penalties as determined by the deci - sion, plus interest. After the Second Instance Tax Court decision, to the extent unfavourable for the taxpayer, the Collection Agent may request 100% of the taxes and penalties as determined by the decision, plus interest. The taxpayer can also ask for a suspension of the collection according to the following proce - dures.
218 CHAMBERS.COM
Powered by FlippingBook