The fight against tax evasion in Italy is being bolstered by new tools such as interoperable databases and artificial intelligence, according to Deputy Minister of Economy Maurizio Leo. In an effort to reduce pending disputes and promote collaborative compliance, the government is implementing new decrees that expand the regime for companies with a turnover above 1 billion euros. These measures include the use of conciliation for pending disputes, the strengthening of electronic methods in the management of tax processes, and the lowering of the revenue threshold for accessing cooperative compliance. By offering advantages such as reduced investigation time and protection from sanctions, these measures aim to improve tax compliance and foster trust between the financial administration and taxpayers.
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Implementing Decrees for Tax Evasion and Compliance
The Deputy Minister of Economy, Maurizio Leo, emphasizes the importance of maintaining a consistent approach in the fight against tax evasion. To achieve this, new implementing decrees have been introduced to address tax litigation and expand the regime of collaborative fulfillment. These measures aim to reduce pending disputes and enhance cooperation between taxpayers and the Revenue Agency.
Use of New Tools
In order to effectively combat tax evasion, the implementation of new tools has become crucial. The interoperability of databases, artificial intelligence, and other advanced technologies now provide us with the means to propose innovative solutions to taxpayers. These tools enable us to analyze vast amounts of data, identify patterns, and detect potential tax evasion more efficiently. By leveraging these technological advancements, we can enhance our ability to enforce tax compliance and ensure a fair and transparent system for all taxpayers.
Provisions on Tax Litigation
Reducing Pending Disputes
The issue of pending tax disputes has been a significant challenge for the Court of Cassation, with a staggering 42,000 cases awaiting resolution. To address this backlog, measures have been put in place to expedite the process and reduce the number of pending disputes. One such measure is the extension of the institution of conciliation to include ongoing disputes. Additionally, the use of electronic methods in managing the litigation process has been strengthened. This includes the requirement for all communications to be conducted through certified e-mail and the transition to electronic notifications and document filing. These initiatives aim to streamline the process, improve efficiency, and ultimately provide taxpayers with a more timely resolution to their disputes.
Expansion of Collaborative Fulfillment Regime
The collaborative fulfillment regime, which involves proactive discussions between taxpayers and the Revenue Agency, has proven to be effective in mitigating the risk of aggressive tax planning. Currently, this regime is limited to around a hundred companies. However, there are plans to expand its scope to include more businesses. Starting next year, companies with a turnover of 750 million euros or more will be eligible to participate, with the threshold gradually decreasing to 500 million euros in 2026 and 100 million euros in 2028. To qualify for the regime, companies must have an effective system in place for detecting, measuring, managing, and controlling tax risk. The new provisions also require companies to conduct a comprehensive mapping of fiscal risks related to their processes. This expansion of the collaborative fulfillment regime aims to foster greater cooperation between taxpayers and the Revenue Agency, leading to improved compliance, reduced tax risks, and a more harmonious relationship between taxpayers and tax authorities.
Strengthening Cooperative Compliance
Threshold for Access
In an effort to enhance cooperative compliance, there will be a revision of the threshold for companies to gain access to this beneficial program. Currently, only a limited number of companies, approximately a hundred, are eligible to participate. However, starting from next year, the revenue threshold required for access will be lowered to 750 million euros. This will allow a broader range of companies to benefit from the advantages of cooperative compliance. Furthermore, the threshold will continue to decrease over time, reaching 500 million euros in 2026 and 100 million euros in 2028. By expanding the eligibility criteria, more companies will have the opportunity to engage in proactive discussions with the Revenue Agency, fostering a culture of cooperation and compliance.
Requirements for Joining
To join the cooperative compliance program, companies must meet certain requirements beyond the revenue threshold. In addition to having an effective system for detecting, measuring, managing, and controlling tax risk, companies will now be required to conduct a comprehensive mapping of fiscal risks associated with their business processes. This mapping exercise will provide a holistic view of potential tax risks and enable companies to develop targeted strategies for risk mitigation. Moreover, companies must ensure that their systems are certified for compliance with accounting principles by independent professionals registered in the appropriate professional registers. The Revenue Agency will provide guidelines for the preparation and maintenance of an effective tax risk management system. By imposing these requirements, the cooperative compliance program aims to ensure that participating companies have robust mechanisms in place to proactively address tax risks and maintain a high level of compliance.
Advantages for Taxpayers
Reduction of Investigation Time
One of the key benefits for taxpayers under the new implementing decrees is the significant reduction in investigation time. By implementing measures such as the use of advanced technologies and improved collaboration between taxpayers and the Revenue Agency, the process of investigating potential tax evasion cases will become more efficient. This means that taxpayers will no longer have to endure lengthy and time-consuming investigations, allowing them to focus on their core business activities. The reduction in investigation time will not only save taxpayers valuable resources but also contribute to a more streamlined and fair tax system.
Protection from Sanctions
Another advantage for taxpayers is the enhanced protection from administrative and criminal sanctions. The current regime already provides some level of protection for taxpayers who timely and comprehensively communicate their fiscal risks. However, the new decrees take this a step further by introducing additional safeguards. If taxpayers communicate their fiscal risks through a tax ruling and their behavior aligns with what was communicated, the applicable administrative sanctions will be reset. This provides taxpayers with a fresh start and an opportunity to rectify any unintentional errors or discrepancies. It is important to note that this protection does not extend to cases involving fraudulent or deceptive conduct that undermines the trust between the taxpayer and the financial administration. Additionally, for cases involving insignificant fiscal risks, the sanctions will be halved and will not exceed the statutory minimum. These measures aim to strike a balance between encouraging compliance and deterring intentional tax evasion, ultimately providing taxpayers with a sense of security and fairness in their interactions with tax authorities.
In conclusion, the Deputy Minister of Economy, Maurizio Leo, emphasizes the importance of using new tools such as interoperability of databases and artificial intelligence to combat tax evasion. The implementing decrees discussed by the Council of Ministers aim to reduce pending disputes and expand the regime of collaborative fulfillment. The measures include the institution of conciliation for pending disputes, the use of electronic methods in the management of processes, and the strengthening of cooperative compliance. These measures will not only reduce investigation time but also provide taxpayers with protection from administrative and criminal sanctions. However, cases involving simulative or fraudulent conduct will not be eligible for these benefits. Overall, these provisions aim to improve tax compliance and foster mutual trust between the financial administration and taxpayers.
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