The applicants, [ALFA] (hereinafter referred to as “[…]”), a Swiss legal company, and its tax representative for VAT purposes in Italy, [BETA] (hereinafter referred to as “[…]”), considering also the additional supplementary documentation submitted following the request of the undersigned to better clarify the terms of the matter, hereby state the following, briefly summarized.
As a preliminary point, the applicants clarify that the parties involved in the transactions subject to the request for clarification are as follows:
– [ALFA], VAT registration number […] (i.e., “[…]”), represented for VAT purposes in Italy by [BETA], tax code and VAT registration number […] (“[…]”).
– [BETA], tax code and VAT registration number […] (“[…]”). This company is not only the VAT representative of [ALFA] but is also the contracting party in the distribution contracts entered into with [ALFA], in the capacity of producer/seller.
– [DELTA] (tax code […]), formerly [GAMMA], incorporated into [BETA] on […].
As a result, the companies [GAMMA] and [EPSILON], mentioned in the first-degree judgment discussed below, are [BETA], which, in turn, has incorporated [EPSILON], hereinafter referred to as “[…].”
Having stated the above, [ALFA] has had distribution contracts in place since 1999 with its Italian affiliates, namely [BETA] and [EPSILON], the latter being merged into [BETA] on […].
According to the terms of the existing contracts, for the correct application of the transfer pricing policy, it was possible for [ALFA] to make payments to [BETA] and/or [EPSILON] (and vice versa, for the latter to make payments to [ALFA]) as adjustments to transfer pricing (“TP adjustments”).
These adjustments could be made as follows:
– “increasing,” meaning the price charged to [ALFA] (the buyer) by [BETA] and/or [EPSILON] (the sellers) was increased from the original price, and consequently, the sellers issued an invoice (or debit note) to [ALFA].
– “decreasing,” meaning the price charged to [ALFA] (the buyer) by [BETA] and/or [EPSILON] (the sellers) was reduced from the original price, and the sellers issued a credit note to [ALFA].
All transactions were subject to VAT in Italy, as they involved contractual modifications to the price of products sold in Italy.
The Provincial Tax Office II of […] and the Regional Tax Office […] did not agree with the application of VAT to credit notes and invoices/debit notes and, therefore, issued the following tax assessments:
– With regard to the tax years 2014 and 2015:
The Provincial Tax Office II […] notified [ALFA], as the buyer, the tax assessments no. […] for the tax year 2014 and no. […] for the tax year 2015, which denied the deduction of VAT applied by [BETA] and/or [EPSILON] (the sellers) to the invoices issued for TP adjustments.
In separate appeals, [ALFA] and its tax representative [BETA] challenged the aforementioned tax assessments before the Provincial Tax Commission of […], seeking their annulment based on alleged illegitimacy and lack of foundation in the merits. The first-instance judge ruled on the consolidated cases with a judgment deposited on […], 2021, upholding the legitimacy and validity of the tax adjustments made by the Tax Office and granting the secondary claim of the applicants concerning the annulment of the claim for default interest and penalties.
The Tax Office, therefore, appealed the above-mentioned judgment before the Regional Tax Commission […], challenging the annulment of the claim for default interest and penalties, and [ALFA] filed counterarguments with an incidental appeal. The proceedings are still ongoing.
– With regard to the tax year 2016:
On […], 2022, the Regional Tax Office […] (DRE) issued the following notice to [BETA], as the seller, with reference to a credit note issued to [ALFA], as the buyer, challenging the deductibility of the applied VAT and requesting payment of interest and penalties.
– With regard to the tax year 2018:
On […], 2022, the DRE […] (Regional Tax Office) issued the following notice to [ALFA], as the buyer, contesting the deductibility of the VAT applied by [BETA] on specific invoices and requesting payment of interest and penalties.
Also, on […], 2022, the DRE […] issued the following notice to [BETA], as the seller, contesting the deductibility of VAT concerning a credit note issued to [ALFA], as the buyer, and requesting payment of interest and penalties.
[ALFA] and [BETA] have duly filed appeals against the three aforementioned tax assessments, and the dispute is currently pending before the Court of First Instance in […].Having laid out the background of the ongoing disputes, [ALFA] and [BETA] now intend to take advantage of the facilitated resolution of tax disputes provided for by Article 1, paragraphs from 186 to 202, of Law No. 197 of December 29, 2022 (Budget Law 2023). For this purpose, they request clarification regarding the possibility, once the disputes are settled, to request the refund of VAT from the Tax Administration, in accordance with Article 30-ter, paragraph 2, of Presidential Decree No. 633 of October 26, 1972 (VAT Decree).
In the supplementary documentation, the applicants have also clarified that “Based on the above, the entities that should apply the provisions of Article 30-ter of Presidential Decree 633/1972 and request the refund of the VAT not due will be the companies that have acted as sellers in the relevant transactions, namely:
a. [BETA], with reference to the invoices issued to [ALFA] for the tax years 2014 and 2015.
b. [ALFA], with reference to the credit note received from [BETA] concerning the tax year 2016 (Notice no. […]).
c. [BETA], with reference to the invoices issued to [ALFA] for the tax years 2018 (Notice no. […]).
d. [ALFA], with reference to the credit note received from [BETA] concerning the tax year 2018 (Notice no. […]).”
Source: gov.it
