Abstract
Based on the reinforced relations between Tax Authorities and taxpayers as suggested by the OECD, the tax law has introduced the cooperative compliance regime, marking the passage from the ex post control of income tax returns to the ex ante cooperative dialogue on the tax base. Under this regime, the relations between tax authorities and large companies are based on a preliminary dialogue to settle interpretative disputes over income tax returns before the taxpayer submits his tax return. The purpose is to guarantee large companies a considerable reduction in the risk of ex post assessment, tax disputes and penalizing consequences and to favor the spontaneous emergence of the taxable base. However, this work examines the numerous criticisms of the cooperative compliance regime that may hamper the success of this scheme.
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Notes
- 1.
The discipline of the cooperative compliance regime is contained in the articles 3–7 of Legislative Decree of 5 August 2015, n. 128 (the so-called “Decree on legal certainty”). By means of these norms the Government has implemented the criteria on tax risk management contained in art. 6, paragraph 1, of delegated law n. 23 of 2014 aimed at creating a fairer, transparent and growth-oriented tax system. To complete the discipline of the CC regime, two measures were taken by the Director of the Revenue Agency: that of 14 April 2016, n. 54237 and that of 26 May 2017, n. 101573. On the CC regime, see G. Salanitro, Profili giuridici dell’adempimento collaborativo tra la tutela dell’affidamento ed il risarcimento del danno, in Riv. dir. trib., n. 5, 2016, 623 ss.
- 2.
Cf. G. Marino (Ed.) Corporate Tax Governance, Milan, 2018, 20 ss. On this subject reference may be made to the author’s monograph, Dal controllo fiscale sul dichiarato al confronto preventivo sull’imponibile. Dall’accertamento tributario alla compliance, Padova, 2017, 163 s.
- 3.
On the point M. Basilavecchia, L’etica dell’amministrazione finanziaria tra responsabilità ed autotutela, in Etica Fiscale e Fisco Etico, in Neotera, n. 2, 2015, 31 s. states: “when it is called to carry out its essential tasks of assessment, the Agency feels in a certain sense authorized to interpret the rules in the way that is most functional to the achievement of its quantitative objectives”. On the subject, see also G. Marongiu, Navigando tra le norme tributarie: alla ricerca di qualche certezza; G. Gaffuri, Stato di diritto nel procedimento di accertamento (linee essenziali di una relazione) both in the Stato di diritto e Stato sociale nell’attuale esperienza fiscale—Atti del XXXII Congresso nazionale ANTI, in Neotera, n. 1, 2014, 5 s. and 6 ss.
- 4.
Cf. L. Carpentieri, L’ordinamento tributario tra abuso ed incertezza del diritto, in Riv. dir. trib., 2008, I, 1053 ss.; F. Gallo, Brevi considerazioni sulla definizione di abuso del diritto e sul nuovo regime del c.d. adempimento collaborativo, in Dir. prat. trib., n. 6, 2014, 952 s. On the subject, see also the author’s monograph Dal controllo fiscale sul dichiarato al confronto preventivo sull’imponibile. Dall’accertamento tributario alla compliance, cit., 92 (note 85 of Chapter 2) and 162 (note 5 of Chapter 4).
- 5.
The Court of Cassation in the first judgments concerning the abuse of the law (tax Section), 21 October 2005, n. 20398 on dividend washing, 26 October 2005, n. 20816 and 14 November 2005, n. 22932 on dividend stripping officially recognized the taxpayer’s unfair conduct, even though no exceptions were made to this effect by the defendant’s office. For an in-depth analysis, G. Falsitta, L’interpretazione antielusiva della norma tributaria come clausola generale immanente al sistema e direttamente ricavabile dai principi costituzionali, in AA.VV, Elusione ed abuso del diritto tributario, Milano, 2009, 19 which stated that the Cassation preferred “to follow the road of circumvention and the detectability of exceptions that benefit finance”.
- 6.
In the past, R. Lupi, Manuale professionale di diritto tributario, Milano, 1998, 107 s. already pointed out that officials’ circumspection is not so much guided by harassment of the taxpayer, but to the understandable tendency to “cover their backs”. This attitude is the result of the spreading in the Offices “of a bureaucratic-formalistic mentality that mortifies the spirit of initiative and tends to avoid responsibility”. There is even a risk that the Administration will act as if it were the legislator “certainly not by rewriting the rules, but by reasoning without considering the existing rules”; so that “the casual attitude with which the Offices revert to the ‘ability to pay’, disregarding the legislative decision-making yields to the impulse to ‘punish the crafty ones’ even at the cost of destroying the certainty of the rules and often at the cost of considering ‘cunning behavior’ as completely normal, just because by acting in another way they would have paid higher taxes”.
- 7.
Article 7, paragraph 4, of Legislative Decree n. 128/2015 identifies the subjects who can apply to the new cooperative compliance regime in the large companies, as being those who achieve a volume of business or revenues of not less than ten billion euros and those who had already submitted an application to the Pilot Project on the cooperative compliance regime, and who are equipped with an internal system for the management of tax risk and with a volume of business or revenues of not less than one billion euros. This subjective perimeter is then substantially expanded by the 2016 Measure of the Director of the Revenue Agency which allows entry into the regime, regardless of the volume of business or revenues, to companies wishing to implement the response given by the Revenue Agency during tax ruling on new investments. Regarding the possibility, governed by the 2016 Measure of the Director of the Revenue Agency, to extend the subjective perimeter by “entrainment” of companies that, regardless of the prescribed dimensional requirements, perform functions in relation to the tax risk control system, provided that “this inclusion is necessary for the purpose of a complete representation of the company processes” see also the author’s monograph Dal controllo fiscale sul dichiarato al confronto preventivo sull’imponibile. Dall’accertamento tributario alla compliance, cit., 172 ss.
- 8.
In the Italian tax system, legal certainty—understood as the predictability, on the side of the taxpayer, to realize the legal consequences of their actions—has often been undermined by a complex, confusing and cumbersome tax law, characterized by an abundance of laws and a succession of obscure and contradictory provisions. On this subject see A. Berliri, Sulle cause dell’incertezza nell’individuazione e interpretazione della norma tributaria applicabile ad una determinata fattispecie, Dir. prat. trib., 1979, I, 3; ID., Ancora sulle cause della mancanza di certezza nel diritto tributario, in Giur. imp., 1984, I, 417; E. Della Valle, Affidamento e certezza del diritto tributario, Milano, 2001, 16 ss.; R. Schiavolin, Il principio di certezza del diritto e la retroattività delle norme impositrici, in A. Di Pietro & T. Tassani, I principi europei nel diritto tributario, Padova, 2014, 27 s. On the definition of “Legal certainty”, see V. M. Corsale, Certezza del diritto - I) Profili teorici, in “Enc. Giuridica Treccani”, VI, Roma, 1988; L. Gianformaggio, Certezza del diritto, in “Digesto disc. priv.”, Sez. civ., II, Torino, 1988; S. Praduroux, Certezza del diritto, in “Digesto disc. priv.”, Sez. civ., Agg. I, Torino, 2014.
- 9.
On the tax interest of the State, see E. De Mita, Interesse fiscale e tutela del contribuente: le garanzie costituzionali, Milano, 2006; P. Boria, L’interesse fiscale, Torino, 2002, 130; ID., Sistema tributario, in “Digesto, disc. priv.”, Sec. comm., vol. XIV, Torino, 1997, 29 ss.; ID., Commento all’art. 53 Cost, in R. Bifulco, A. Celotto, & M. Olivetti, Commentario alla Costituzione, vol. I, Torino, 2006, 1055 ss.; ID., Il bilanciamento di interesse fiscale e capacità contributiva nell’apprezzamento della Corte Costituzionale, in L. Perrone & C. Berliri, Diritto tributario e Corte Costituzionale (i 50 anni della Corte Costituzionale), Napoli, 2006, 57 ss.. In this regard, see also L. Antonini, Dovere tributario, interesse fiscale e diritti costituzionali, Milano, 1996.
- 10.
Once the CC regime has been opened, the Office of cooperative compliance assigns to the taxpayer at least two key officials who have the task of encouraging the establishment of an effective and continuous ex ante dialogue between the office and the taxpayer. On this subject, see the 2017 Measure of the Director of the Revenue Agency, in point 1.1 letter (r).
- 11.
See point 4.8 of the 2017 Measure of the Director of the Revenue Agency.
- 12.
G. Salanitro, Profili giuridici dell’adempimento collaborativo tra la tutela dell’affidamento ed il risarcimento del danno, cit., 639 has a critical position on the point. He states that: “there is a ‘common evaluation’ if together we evaluate a given fact, expressing its judgment. But the judgment is certainly reserved for the tax authority. It would perhaps have been better to speak of a ‘common verification’ of the factual element, in the sense of verification carried out together, exchanging all the data and information, without prejudice to the assessment carried out by the tax authority. Certainly there is no agreement, either because the legislator does not use this term, or because we are in the cognitive phase where an agreement is not even abstractly conceivable”.
- 13.
See point 5.4 of the 2017 Measure of the Director of Revenue Agency.
- 14.
Even in the absence of an explicit regulatory provision, it seems logical to believe that the reasoned opinions should be given the same effectiveness as the answers to the tax ruling regulated by article 11 of the Taxpayers’ Statute. Unlike tax ruling in the cooperative compliance regime, the tax office can examine in advance, by exercising the ordinary powers of fiscal control, the factual elements constituting the operations characterized by fiscal risks; instead, this control cannot take place in tax ruling where the effectiveness of the response is subordinated to the truthfulness of what was declared by the taxpayer in the request for a reply.
- 15.
If the taxpayer does not share the positions of the tax office on the tax treatment of the circumstances in question, the positions for which there is no agreement are considered “suspended positions” and will be subject to contradiction even after the presentation of the tax return in order to achieve the desired shared performance of tax duties with a view to reducing tax litigation. If the review should gives a negative result, the suspended positions will instead be subject to tax assessment.
- 16.
These positions refer to those cases that were the subject of precautionary dialogue on which the parties, by mutual agreement, decided to postpone the preliminary dialogue and, therefore, the possible signing of the relative agreement to the subsequent tax period in order to be able to gain, jointly, all the insights necessary to ensure transparency and certainty for the tax relationship.
- 17.
As defined in point 1 (d) of the Measure of the Director of the Revenue Agency n. 54237/2016.
- 18.
See art. 4, paragraph 1, of Legislative Decree n. 128/2015. It should be remembered that the legislator has not provided for a standardized system of fiscal control for companies wishing to adhere to the cooperative compliance regime. The Revenue Agency is, therefore, free to confirm the tendential validity, for the purposes of the new system of cooperative compliance, of the internal control models already implemented in the company as long as they guarantee a strong tax coverage. However, the Measure of the Director of the Revenue Agency n. 54237 of 2016, in point 3.3, has provided the following minimum requirements that this system of internal control of tax risk must possess: (a) a clear and documented tax strategy. The tax strategy is the document, written and signed by the company’s top management, aimed at defining the company’s objectives in relation to the fiscal variable and reflecting the degree of risk appetite on the part of the company; (b) a clear assignment of roles to persons with appropriate skills and experience, according to criteria for the separation of duties; (c) effective procedures aimed at detecting risk through the mapping of tax risks associated with business processes, to measure risk by determining the entity of tax risks in qualitative or quantitative terms; to manage and control risk through the definition of actions aimed at overseeing tax risks and preventing the occurrence of events; (d) effective monitoring procedures that, through a self-learning cycle, allow the identification of possible errors in the functioning of the system and the consequent activation of corrective actions; (e) adaptability of the enterprise to the main changes affecting the company, including changes to tax legislation; (f) annual report to be sent to the management bodies for examination and consequent evaluations, containing the results of the periodic review and of the checks carried out on the tax obligations, the planned activities, the related results and the measures put in place to remedy any shortcomings that may emerge as a result of monitoring.
- 19.
See point 3.2 of the Measure of the Director of the Revenue Agency n. 101573 of 2017.
- 20.
The Revenue Agency has the task of assessing the tax risk control system inspired by criteria of transparency, reasonableness and proportionality both at the time of admission to the cooperative compliance regime and during the permanence of the company under the same scheme; an assessment can, however, end with the proposal of interventions on the tax risk control system in order to stimulate the emergence of the correct measurement of the tax bases.
- 21.
Measure of the Director of the Revenue Agency, May 26, 2017, n. 101573.
- 22.
The Measure of the Director of the Revenue Agency, in point 1.1 letter (i), established that the risk map is drawn up for business processes and for each activity involved and highlights, where quantifiable, the economic value of the activities into which the process is divided, the associated tax risks, the relevance of the same for the purposes of achieving the company objectives, as well as the controls set up to protect them.
- 23.
The Measure of the Director of the Revenue Agency in point 1.1 letter (j), established that by “significant tax risks”, reference is made to the tax risks linked to those cases for which the duties of cooperation and transparency set forth in art. 5 of Legislative Decree n. 125/2015 are effective, on the basis of the common assessment of quantitative and qualitative materiality thresholds set between taxpayers and tax authorities in the initial meeting, or in a subsequent meeting.
- 24.
See art. 6 of Legislative Decree n. 128/2015.
- 25.
Upon receipt of the request by the taxpayer, the Revenue Agency, within fifteen days, assesses the suitability of the application and the sufficiency of the documentation produced and responds to the request within forty-five days. Subsequently, the taxpayer must inform the Agency of the behavior actually adopted if it differs from what is represented in the opinion issued by the tax authority.
- 26.
All those who join the scheme are included in the special list published on the Revenue Agency’s institutional website.
- 27.
This category includes: cases that may generate significant tax risks (for which, on the basis of a common assessment between the taxpayer and the Office of the quantitative and qualitative materiality thresholds, the duties of transparency and cooperation governed by the Measure are considered operative); aggressive tax planning operations; the cases that do not fall within the aforementioned thresholds (and are, therefore, excluded from the notification obligation), but that the taxpayer autonomously decides to communicate during the preventive discussions with the Office because it considers them uncertain, controversial and, in any case, a source of potentially significant tax risk.
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Conte, D. (2019). Tax Risk Management Between Tax Authorities and Large Companies: The Cooperative Compliance Regime. In: De Vincentiis, P., Culasso, F., Cerrato, S.A. (eds) The Future of Risk Management, Volume I. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-14548-4_16
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