Article 1 of Law Decree no. 87 of 14 June 2024 (Decree on Penalties) introduces relevant revisions to the regulation of income tax and VAT criminal acts contained in Law Decree No. 74/2000, inter alia, with reference to: the introduction of the prohibition of substantive ne bis in idem, the definition of undue offsetting of non-entitled and non-existent tax credits, and the amendment on the omission of withholding tax and omitted payment of VAT.
The prohibition of substantive ne bis in idem
The decree on penalties provides an important exception to the system of ne bis in idem, i.e. the system that allows the simultaneous or gradual application of two different sanctions, criminal and administrative, at the end of two separate proceedings, in relation, however, to the same criminal act. Therefore, as a result of the penalties law:
– judgments pronounced in tax proceedings, that have become irrevocable, and final tax assessment in administrative proceedings, also following agreements, concerning violations deriving from the same facts for which criminal proceedings have been brought, may be obtained in the criminal prosecution for the purpose of proving the fact ascertained therein;
– the irrevocable acquittal judgment because the fact does not exist or the defendant did not commit it, pronounced after trial against the same person and on the same tangible facts under assessment in the tax proceedings, has, in the tax proceedings, the effect of res judicata, at all stages and levels, as to the same facts.
Non-existent and not entitled credits and non-punishment in cases of objective uncertainty
In view of the requirement set out in the enabling act to introduce, in accordance with the case law, a stricter regulatory distinction, also in terms of sanctions, between the different types of undue offsetting of non-entitled and non-existent tax credits, the Delegated Legislator introduces, for the first time in the criminal law framework, the definition of the aforesaid tax credits, establishing (but the definitions also apply on the tax law aspect by virtue of the reference made by the amended Article 13, paragraph 4, of Legislative Decree No. 471 of 1997) as follows:
– “existant credits” means: “1) credits for which the objective or subjective requirements, in whole or in part, specifically set out in the relevant legislation are lacking; 2) credits for which the objective and subjective requirements set out in paragraph 1) are the subject of fraudulent acts, carried out by means of materially or ideologically falsified documents, simulations or fraudulent artifices” (new Article 1, paragraph1, letter g-quater of Legislative Decree No. 74/2000).
– “undue credits” means : “(1) credits availed of in violation of the procedures provided for by the applicable legislation i.e., for the related surplus, those availed of in excess of that established by the relevant legislation; credits that, although in the presence of the subjective and objective requirements specifically indicated in the regulatory provisions of reference, are based on facts that do not fall within the regulations attributing the credit due to the lack of further elements or particular features required for the purposes of recognition of the credit; credits utilized in the absence of the prescribed administrative requirements expressly provided for under penalty of forfeiture” (new Article 1, paragraph 1, lett. g-quinquies), of Legislative Decree No. 74/2000).
The new criminal offences of omitted payment of withholding tax and VAT and the new non-liability causes. The amendments concerning the omitted payment of withholding tax under Article 10-bis and the omitted payment of VAT pursuant to Article 10-ter of Law Decree no. 74 of 2000 are quite significant.
The delegated decree provides that in cases of non-payment of withholding taxes due and certified for an amount exceeding € 150,000 for each tax period (new Article 10-bis of Legislative Decree no. 74/2000), as well as value added tax for an amount exceeding € 250,000 for each tax period, (new Article 10-ter of the same legislative decree), the penalty of imprisonment from six months to two years shall apply if:
- the tax debt is not in the process of being extinguished by instalment payments pursuant to Article 3-bis of Legislative Decree no. 462/1997;
- there is forfeiture of the benefit of the instalments, pursuant to Article 15-ter of Presidential Decree no. 602/1973 and the amount of the residual debt is in any case greater than € 50,000 (Article 10-bis) or € 75.000 (Article 10-ter).
The delegated legislator postpones the time when the crime is committed, no longer with the failure to pay the amount due if “above the threshold”, within the deadline for the submission of the relevant annual return but with the failure to pay the amounts “above the threshold” by 31 December of the year following that of the submission of the declaration itself; the thresholds remain unchanged: € 150,000 for cases of non-payment of withholding taxes and € 250,000 for non-payment of VAT.
The legislator has, therefore, untied the omitted payment crimes from the time of submission of the tax return, to rather link them to the taxpayer’s will not to proceed with the payment of the amount due even by instalments following the receipt of the notice of payment. And precisely for the purpose of coordinating the criminal rules with the tax rules, a new paragraph 2-bis has been introduced to Article 3-bis of Legislative Decree No. 462/1997.
Furthermore, the penalty of the omitted payment crime is excluded when the fact depends on non-attributable causes that occurred after the withholding or collection of value added tax (new paragraph 3-bis of Article 13 of Legislative Decree No. 74/2000).
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