Within the framework of the significant recently enacted changes concerning the judicial tax system, it has been introduced the possibility to settle tax disputes pending before the Court of Cassation as of 15 July 2022 and those disputes for which the appeal to the Court of Cassation has been notified by 16 September 2022.

Law No. 130 of 31 August 2022, published in the Official Gazette No. 204 of 1 September 2022, introduced significant changes in the area of the judicial tax system, in order to pursue the objectives identified by the National Recovery Plan (Piano nazionale ripresa resilienza – PNRR), approved by the Italian government in 2021 to give new economic impetus to the country.

Among the various measures outlined therein, Article 5 introduces the possibility to settle tax disputes still pending before the Court of Cassation as of 15 July 2022, and those for which the appeal to the Court of Cassation has been notified by 16 September 2022, with the aim of reducing the backlog of inactive tax disputes at the final (legitimacy) stage.

In particular, the following litigation proceedings can be settled:

– disputes whose value does not exceed €100,000, in which the Revenue Office has been unsuccessful in both previous instances, through the payment of an amount equal to 5% of the value of the dispute;

– disputes whose value does not exceed €50,000, in which the Revenue Office has been unsuccessful in whole or in part, during one or both instances, with the payment of an amount equal to 20% of the value of the dispute.

Thus, taxpayers cannot settle tax disputes if they have been unsuccessful in both instances. It is also not possible to settle disputes concerning:

– the European Union's traditional own resources (e.g. custom duties) and VAT collected on importation;

– sums due as a result of State aid recovery.

By express law provision, the value of the dispute is determined by considering the amount of the tax contested only in first instance, net of penalties and interest. If the dispute only relates to the imposition of penalties, the value is made up by the sum thereof.

For the purposes of the settlement, any payments already made during the proceedings shall be taken into account. There is no possibility of requesting the reimbursement of sums that have already been paid in excess of the amount due for the settlement.

The voluntary settlement of the dispute is finalized by submitting the appropriate application and paying the amounts due within 120 days from the entry into force of Law No. 130/2022 (i.e. 16 September 2022). If there are no amounts to be paid, the settlement is completed through the mere submission of the application.

For the purposes of the settlement, any payments already made for any reason throughout the pending proceedings shall be taken into account. In any event, it should be noted that the identification of the methods to implement the settlement procedure is subject to additional ad hoc regulations to be issued by the Director of the Italian Revenue Agency.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.