Abstract
The legislature adopted a GAAR in 1990. This provision finds tax avoidance when the following components exist: tax saving, lack of valid business purpose, use of abnormal legal arrangements, and specific intent. The GAAR is not of general application, applying to seventeen listed transactions. A six-step approach is used to determine whether a transaction violates the anti-avoidance rule. A transaction must be identified as one on the GAAR list. The tax saved as a result of the transaction must be greater than if a normal, non-circuitous arrangement had been used. If the transaction lacks a valid business purpose, the taxing authority may disregard the transaction and deny the expected tax benefits. A judicial anti-avoidance doctrine has developed so that the courts may address transactions not specifically covered by the GAAR. Support for the development of this anti-abuse principle was derived by the courts initially from European Court of Justice case law protecting the fundamental freedoms secured for community members, but more recently support has also been found in the Italian Constitution. Development of the judge-made abuse of law doctrine has led to efforts to reform and expand the GAAR.
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Notes
- 1.
For a comprehensive introductory reading in English to the Italian legal system, reference could well be made to J.S. LENA, U. MATTEI (Eds.), Introduction to Italian Law, Zuidpoolsingel, 2002.
- 2.
In this respect, it is quite curious to remark the existence of a domestic law review, written in Italian, titled “Trust”.
- 3.
P. DE BARROS CARVALHO, Curso de direito tributário, São Paulo, 2008, 14.
- 4.
An introductory reading in this respect may be G. MARONGIU, I fondamenti costituzionali dell’imposizione tributaria, Torino, 1991.
- 5.
In particular, Art. 76 and 77 of the Italian Constitution.
- 6.
The scope of Application of this legislative instrument is provided by its Art. 1.
- 7.
A. HENSEL, Zur Dogmatik des Begriffs Steuerumgebung, in ID. (Ed.) Festgabe der Bonner Juristenfacultät für E. Zitelmann, München, 1923, 244.
- 8.
F. PAPARELLA, “Riflessioni in margine all’art. 10 della Legge 1990, n. 408, relativo alla ristrutturazione delle imprese”, (1995) 6 Dir. prat. trib., 1835.
- 9.
A. LOVISOLO, “L’evasione e l’elusione tributaria”, (1984) Dir. prat. trib., 1287.
- 10.
See for instance Art. 11 of Directive No. 90/434/EEC (“Mergers Directive”) or Art. 1 of Directive No. 90/435/EEC (“Parent Subsidiary Directive”). The case law of the ECJ has somewhat suffered from terminological inconsistencies in the Italian versions of its decisions with respect to the notions of tax avoidance and tax evasion. In this respect, see P. PISTONE, “L’elusione fiscale come abuso del diritto. Certezza giuridica oltre le imprecisioni terminologiche della Corte di Giustizia Europea in materia di I.v.a”, (2007) 3 Riv. dir. trib., 17.
- 11.
A. CONTRINO, Elusione fiscale, evasione e strumenti di contrasto. Profili teorici e problematiche operative, Bologna, 1996, 25.
- 12.
Reference in this respect should be made to the extensive study “Comparing the General Anti-avoidance Rule of Income Tax Law with the Civil Law Doctrine of Abuse of Law” by Zoe and John Prebble, published in the April 2008 issue of European Taxation (151–170).
- 13.
In the lack of excerpts of case law or documents issued by the Tax Authorities dealing with the contours of tax mitigation, reference should once more be made to scholarly classification. See, in English, V. UCKMAR, “Tax Avoidance and Tax Evasion General Report”, in Cahiers de droit fiscal international, Vol. LXVIII a, Amsterdam, 1983, passim.
- 14.
Such is stated in J. PREBBLE, Z. PREBBLE, “Comparing the General Anti-avoidance Rule of Income Tax Law with the Civil Law Doctrine of Abuse of Law,” (2008) 4 European Taxation, 168.
- 15.
As a matter of fact, the debate on abuse of rights is not a new one. For an introductory overview in French with a comparative approach see C. DAVID, “L’abus de droit en Allemagne, en France, en Italie, aux Pays-Bas et au Royaume -Un essai de comparation”, (1991) 1 Riv. dir. fin., 220 and, in Italian, with focus on the German experience, P. PISTONE, Abuso del diritto ed elusione fiscale, Padova, 1995.
- 16.
ECJ, Case C-255/02, Decision of 21st February 2006, “Halifax c. Commissioners of Customs & Excise”.
- 17.
It should be remarked that reference to the abuse of right principle had already been made the European Court of Justice in Case C – 206/94, Case C – 367/96, Case C – 167/01.
- 18.
ECJ, Case No. 255-02 of 21st February 2006, “Halifax c. Commissioners of Customs & Excise”, Paragraph 74.
- 19.
For a Commentary, see B. SANTACROCE, “Il concetto comunitario di abuso del diritto in una recente circolare delle Entrate sull’elusione nell’IVA”, (2008) 1 Dialoghi Tributari, p. 117.
- 20.
See, in particular, Court of Cassation, Decision, No. 8487/2009.
- 21.
In this sense, L. POTITO, “Le “valide ragioni economiche” di cui all’art. 37-bis del D.p.r. n. 600/1973: considerazioni di un economista d’azienda,” (1999) 1 Rassegna tributaria, 63.
- 22.
Such an approach has however been severely criticized in literature (See, on this specific aspect and among the most recent publications, G. ZIZZO, “Ragioni economiche e scope fiscali nella clausola antielusione,” (2008) 1 Rassegna tributaria, 170) and it has often been eventually dismissed by Court Decisions.
- 23.
Literally: “without valid economic reasons.”
- 24.
In this sense, see, among the most recent literature I. VACCA, “Abuso del diritto ed elusione fiscale”, (2008) 1 Riv. dir. trib., 1069, according to whom the introduction of Art. 10 of Law No. 408/1990 was an “absolute novelty.”
- 25.
For an accurate review and analysis of the case law of the Court of Cassation with respect to the last forty years (up to the end of the XX Century), reference should be made to G. ZOPPINI, “Prospettiva critica della giurisprudenza “antielusiva” della Corte di Cassazione (1969–1999),” (1999) 1 Riv. dir. trib., 919.
- 26.
The thesis of the “counter-reformist” import of the introduction of an anti-avoidance clause has also recently been set forth by G. FALSITTA, “L’interpretazione antielusiva della norma tributaria come clausola generale immanente al sistema e direttamente ricavabile dai principi costituzionali,” (2009) Corriere Giuridico, 296.
- 27.
See C. GARBARINO, Manuale di tassazione internazionale, II Ed., Milano, 2008, 882 et seq.
- 28.
For an updated introductory reading in English to this topic, see L. DELL’ANESE, Tax Arbitrage and the Changing Structure of International Tax Law, Milano, 2006.
- 29.
For an analytical survey of the matter see P. LUDOVICI, “La rilevanza dei tributi esteri ai fini dell’art. 37-bis del D.P.R. 600/1973,” in G. MAISTO (Ed.), Elusione ed abuso nel diritto tributario, Milano, 2009, 263.
- 30.
In particular, Circular Letter No. 32/9/2267 of 1980 and Circular Letter No. 42/12/1587 of 1981.
- 31.
See also L. DELL’ANESE, “L’evoluzione della disciplina anti-abuso di trattato nelle convenzioni contro le doppie imposizioni sottoscritte dagli Stati Uniti,” (1998) 3 Dir. prat. trib, 697.
- 32.
F. MUCCIARELLI, “Abuso del diritto, elusione fiscale e fattispecie incriminatrici”, in G. MAISTO (Ed.), Elusione ed abuso del diritto tributario, Milano, 2009, 436.
- 33.
See, in particular, F. GALLO, “Rilevanza penale dell’elusione,” (2001) Rass. trib., 321.
- 34.
For an introductory overview in English language, see R. CORDEIRO GUERRA, P. MASTELLONE, “The Judicial Creation of a General Anti-Avoidance Rule Rooted in the Constitution,” forthcoming in European Taxation. Among the scholarly contributions to the current debate in Italian see, inter alia, A. MANZITTI, I. VACCA, R. LUPI, D. STEVANATO, “Contrasto all’elusione e incertezza del diritto,” (2009) 1 Dialoghi Tributari, 32; R. LUPI – D. STEVANATO, “Tecniche interpretative e pretesa immanenza di una norma generale antielusiva,” (2009) 6 Corr. trib., 403; A. LOVISOLO, “Abuso del diritto e clausola generale antielusiva alla ricerca di un principio,” (2009) I Riv. dir. trib., 89; G. MARONGIU, “Abuso del diritto o abuso del potere?,” (2009) 13 Corr. trib., 1077.
- 35.
Court of Cassation, Decision No. 221221/2006 (direct taxes); Court of Cassation, Decision No. 11226/2007 (direct taxes); Court of Cassation, Decision No. 18374/2007(stamp duty); Court of Cassation, Decision No. 18218/2007 (excises); Court of Cassation, Decision No. 8772/2008 (direct taxes); Court of Cassation, Decision No. 10257/2008, (direct taxes); Court of Cassation, Decision No. 14509/2008 (excises); Court of Cassation, Decision No. 23633/2008 (direct taxes); Court of Cassation, Decision No. 30055, 30056 and 30057/2008 (direct taxes).
- 36.
See for example: Court of Cassation, Decision No. 8772/2008.
- 37.
Court of Cassation, Decision No. 10257/2008.
- 38.
Court of Cassation, Decision No. 25374/2008.
- 39.
This concept of “open texture” or “penumbra” has been coined by H.L.A. HART. ID., The concept of law, II Edition, 1961, Oxford.
- 40.
In particular, ECJ Case C-223/03, Decision of 21st February 2006, “University of Huddersfield Higher Education Corporation v HMRC”; ECJ, Case C-425/06, Decision of 21st February 2008, “Ministero dell’Economia e delle Finanze v Part Service srl”; ECJ, Case C-279/93, Decision of 14th February 1995, “Finanzamt Köln-Altstadt v Schumacker”; Case C-330/91, Decision of 13th July 1993 “The Queen v IRC ex parte Commerzbank”; ECJ, Case C-250/95, Decision of 15th May 1997, “Futura Participations SA v Administrations des Contributions.”
- 41.
Case C-196/04, Decision of 12th September 2006, “Cadbury Schweppes plc v Commisioners of Inland Revenue,” fn. 13 at [50].
- 42.
Ibid., fn. 13 at [51].
- 43.
Court of Cassation, Decisions No. 30055, 30056 and 30057/2008.
- 44.
Article 53 provides that “all taxpayers must contribute to public expenditures in accordance with their ability to pay.”
- 45.
And somewhat anticipated by Circular Letter No. 21/2006.
- 46.
See also P. PICCONE FERRAROTTI, “Sull’applicabilità dell’art. 37, 3o co., del d.p.r. n. 600 del1973 al cosiddetto dividend washing,” (2000) 11 Rassegna Tributaria, 933.
- 47.
Proposta di Legge N. 2521, di iniziativa del Deputato M. Leo.
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Garbarino, C. (2012). Italy. In: Brown, K. (eds) A Comparative Look at Regulation of Corporate Tax Avoidance. Ius Gentium: Comparative Perspectives on Law and Justice, vol 12. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2342-9_9
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