The answer is not at all obvious. The correct distinction between non-existent and unallowable credits, with the consequent effects, remains a far from settled issue. For the local Revenue offices, there are no doubts: if recovered, the R&D tax credit is non-existent. Jurisprudence and, above all, logic opinions, are of the opposite belief.
The starting point is the distinction between a non-entitled or non-existent tax credit: a tax credit is defined as non-entitled if the taxpayer, while intending to comply with the legislative prerequisite, commits errors in qualifying or quantifying it. On the other hand, the tax credit is to be defined as non-existent if the determination of the credit was made in the absence of documentation or on the basis of false documentation.
There are then several tax implications, both in relation to the time limits for assessment (longer for non-existent credits) and in relation to the applicable sanctions (more severe for non-existent credits). In particular, in relation to non-existent tax credits, the applicable provision is Article 27, paragraph 16, of Law Decree No. 185/2008, which provides that for non-existent credits improperly compensated, the notice of assessment must be served by 31 December of the eighth year following the year in which the compensation took place. With regard, on the other hand, to unallowed credits, the applicable provision is set forth in Article 43, paragraph 1 of Presidential Decree No. 600/1973, pursuant to which notices of assessment must be served, under penalty of forfeiture, by 31 December of the fifth year following the year in which the tax return was filed. In terms of sanctions, Article 13, Legislative Decree No. 471/1997, provides for a 30% sanction in case of using a tax credit in excess of the amount due, and a sanction from 100% to 200% of the credit in case of using non-existent credits as compensation.
Thus, the debate concerning the qualification of the non-existent or non-allowable tax credit for non-declared research and development as a tax credit has given rise to many disputes. According to the Revenue Office, failure to fill in the RU section is interpreted as the non-existence of the prerequisite, resulting in the non-existence of the credit. Pending the United Sections ruling (see ruling no. 3784/2023, no. 3443-3444 and no. 3445 of 2022) on this matter, reference is made to the recent ruling no. 1288 of 2023 of the Second Instance Tax Court of Lombardy, which considers that, while it is correct that the instructions for completing the declaration envisage that the credit must be indicated, under penalty of forfeiture, it is equally correct that this provision is not supported by the legislation. In other words, according to the Second Instance Tax Court of Lombardy, only credits that are non-existent from the outset, or which are recognized as being due to a party other than the one using them, are non-existent. For this reason, the Court concludes that failure to complete the RU section should be considered a formal error.
It is clear that the correct distinction between non-existent and unallowable credits, with the consequent effects, is one of the most “hot button” tax issues, to the point that even the tax delegation promises to provide clarification. We therefore expect that all doubts will soon be clarified.
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