Tax Dispute on the fly - A quick overview on Italian developments

 Giuliana Polacco, Annarita De Carne

10-2020

The pandemic situation in Italy has significantly affected how tax audits are conducted and how tax dispute is managed. The Revenue Agency has to combine the need of maintaining an adequate level of tax collections with that of avoiding the pressure on the taxpayers deriving from enforcement actions aimed at increasing incoming flows. Moreover, taxpayers still have the right to discuss their pending cases before the Tax Courts, which have started to schedule in person hearings. 

In the periodical analysis regarding the annual income from taxes, the Ministry of Finance detected that the revenues from tax collections were significantly lower, with almost 30% decrease deriving from tax audits and tax assessment activity (mainly due to corporate income tax audits). A major portion is due to reduced collection on corporate income tax (see Official Communication of the Ministry of Finance dated 5 October 2020).

The negative outcome is due to the inevitable restrictions to perform in-site audit activity during the COVID-19 pandemic, as well as the official suspension from any type of collection of sums due until the end of the year, also due to the most recent emergency legislation.