- Application lodged on 26 March 2025
- Question referred by Corte di Giustizia Tributaria di secondo grado della Lombardia in Milan Italy
Summary
- Background: The Italian Revenue Agency appealed a decision by the Bergamo Provincial Tax Court that canceled a VAT-related tax debt notice against Isolanti Group Srl, questioning the compatibility of Italy’s simplified tax dispute resolution mechanism with EU law.
- Legal Questions: The court asked whether EU law principles, including fiscal neutrality and proportionality, preclude Italy’s simplified resolution mechanism, which excludes disputes involving VAT on imports but allows resolution for intra-Community VAT disputes.
- EU Law Concerns: The referring court questioned if the simplified resolution mechanism violates EU obligations to ensure full VAT collection and equal treatment of taxpayers, potentially favoring less scrupulous taxpayers and undermining EU budget resources.
- National Legislation: Law No 197/2022 allows disputes to be resolved by paying reduced amounts, raising concerns about its impact on VAT collection and whether it constitutes a general waiver of tax recovery, contrary to EU law.
- Implications for Competition: The court highlighted potential damage to free competition and the internal market by favoring foreign goods over EU-origin goods, questioning the exclusion of import VAT disputes from simplified resolution under EU law.
Articles of the EU VAT Directive
Articles 250 and 273 of Directive 2006/112/EC
Facts
- Parties Involved: The case involves an appeal by the Agenzia delle Entrate (Italian Revenue Agency) against the judgment of the Commissione tributaria provinciale di Bergamo (Bergamo Provincial Tax Court). The applicant at first instance is Isolanti Group Srl.
- Tax Debts: Following audits, the Revenue Agency determined that Isolanti Group had benefited from tax infringements related to VAT, specifically involving a third-party company that had issued false invoices as a “shell company.” Consequently, Isolanti Group was required to pay certain tax debts arising from these VAT-related issues.
- Notice of Assessment: On 24 March 2021, the Revenue Agency served Isolanti Group with a notice of assessment demanding payment of the identified tax debts, along with accrued interest and penalties.
- Legal Action: Isolanti Group challenged the notice of assessment by filing an application on 19 May 2021 before the Bergamo Provincial Tax Court, seeking cancellation of the tax debts. The Provincial Tax Court ruled in favor of Isolanti Group, canceling the contested notice in judgment No 172/2022.
- Appeal: The Revenue Agency subsequently appealed the Bergamo Provincial Tax Court’s decision to the Corte di Giustizia Tributaria di secondo grado della Lombardia (Tax Court of Appeal, Lombardy).
- Simplified Resolution Mechanism: On 3 August 2023, Isolanti Group filed a motion to suspend the dispute and sought the simplified resolution of the tax dispute under provisions of Law No 197/2022. The Revenue Agency later accepted this request for simplified resolution, leading to a recommendation that the dispute be concluded.
- Doubts About EU Law Compliance: The referring court expressed doubts about whether the simplified resolution mechanism set out in Law No 197/2022 complied with EU law, particularly regarding its exclusion of disputes over VAT on imports while allowing for disputes concerning intra-Community VAT.
- Concerns Raised: The court raised concerns about potential discrimination and the implications for the effective collection of VAT and the integrity of the EU budget, especially regarding the treatment of different types of VAT disputes under the simplified resolution mechanism.
Questions
- Do Article 4(3) TEU and Articles 250 and 273 of Directive 2006/112/EC (or the analogous Articles 2 and 22 of Directive 77/388/EEC) preclude the national legislation laid down in Article 1(193)(a) of legge 197 del 2022 (Law No 197/2022), in so far as it excludes from the mechanism of simplified resolution only disputes concerning [even] only partially the VAT levied on imports and not also those concerning even only partially [EU] VAT or VAT provided for by EU law, for which the simplified resolution of disputes is instead permitted?
- Do the principle of fiscal neutrality and the proper functioning of the common system of value added tax preclude the national legislation laid down in Article 1(193)(a) of Law No 197/2022 in so far as it – illogically or otherwise in a discriminatory manner – excludes from the mechanism of simplified resolution only disputes concerning the VAT levied on imports and not also those concerning even only partially [EU] VAT or VAT provided for by EU law, for which the simplified resolution of disputes is instead permitted, taking into account also the principle referred to in Article 4(3) TEU with which national rules and practices must comply?
- Is the mechanism of simplified resolution laid down in the abovementioned national legislation, even if considered compatible with EU law, contrary to the general principle of proportionality, in so far as it could result in a benefit for the private taxpayer of up to 95% of the unpaid tax and, consequently, an economic loss for the State budget, which is also significant from the point of view of EU law?
Source
Other ECJ Cases referred to
- Commission v. Austria (C-128/05) – Judgment of 28 September 2006. This case involved the interpretation of VAT law and the obligations of Member States regarding VAT collection.
- Commission v. Italy (C-132/06) – Judgment of 17 July 2008. This case addressed the legality of VAT amnesties and the obligations of Member States to recover VAT.
- Commission v. Italy (C-174/07) – Judgment of 11 December 2008. This case further explored Italy’s VAT regulations and their compliance with EU law.
- Belvedere Costruzioni (C-500/10) – Judgment of 29 March 2012. This case examined the compatibility of Italian tax law with EU VAT directives regarding the simplified resolution of tax disputes.
- Degano Trasporti (C-546/14) – Judgment of 7 April 2016. This case involved VAT and its implications on tax recovery and compliance within EU law.
- Elektrorazpredelenie Yug (C-31/18) – Judgment of 17 October 2019. This case discussed the principles of VAT in the context of energy supply and compliance with EU regulations.
- F. Hoffmann-La Roche and Others (C-261/21) – Judgment of 7 July 2022. This case dealt with competition law and its intersections with tax regulations.
- Shell Deutschland Oil (C-553/21) – Judgment of 22 December 2022. This case involved VAT recovery and compliance with EU directives.
- Bank M. (C-520/21) – Judgment of 15 June 2023. This case examined the consequences of annulment in relation to tax obligations.
- ZI and TQ (C-437/20) – Order of 10 January 2022. This case provided insights into VAT recovery issues.
- Tolnatext (C-636/20) – Order of 1 July 2021. This case involved discussions on VAT compliance and national regulations.
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