The taxman must stop showing himself as an enemy and hostile towards taxpayers, to only instill fear – Renzi said in his inaugural speech -; rather, he must stand by their side to help them in the correct fulfillment of their tax obligations. Very harsh – he concluded – the taxman must be only towards those who really commit crimes.
Even more precise was the Minister of Economy and Finance, Pier Carlo Padoan, on his debut in the Montecitorio hall. “The first objective of the enabling law – he declared – is to give stability and certainty to the tax system. Eliminating uncertainty is a fundamental element because, other things being equal, it favors the adoption of a longer-term time horizon. Thus, it improves the attitude to invest”. And he continued by pointing out the most significant points of the powers conferred on the Government: "the redefinition of the abuse of the law unified with that of avoidance, the review of criminal and administrative sanctions, the better functioning of litigation, the improvement of relations with taxpayers along the lines of compliance cooperatives, OECD proposals”.
Indeed, the delegation on the regulation of the abuse of rights as well as that for the revision of the sanctioning system appear fundamental to mark the new path that the tax authorities must take as well as to create an even more attractive tax system for foreign investments.
Fiscal competition between states will take place less and less through the granting of subsidized, favorable and opaque regimes. The recent evolutions in the attitude of the major states towards tax havens is leading to a new global climate, in which the effectiveness of tax systems to promote the economic growth of countries, investments and the settlement of foreign capital, will have to be expressed in different way. The tax systems capable of guaranteeing stability and certainty, of guaranteeing that the market is not distorted by operators who take advantage of tax evasion, will win; but also that tax assessments are inspired by criteria of transparency and objectivity, with sanctioning reactions proportionate to the real seriousness of the conduct.
The first question is that of a discipline of the abuse of law. In recent years, the increasingly widespread use of this institution by tax administration offices and tax judges has ended up making the application of tax law uncertain, creating an unsustainable situation not only for Italian companies, but also for the image of our tax system internationally.
The assessment offices often resort to the abuse of the law to disregard the effects of negotiating deeds, which, although compliant with the law, nevertheless lack - according to their objections - valid economic reasons, other than fiscal ones. This on the basis of questionable disputes on the merits, anything but objective and predictable. The problem is made more acute by the fact that our legal system is dotted with cases which, while achieving equivalent economic results, are subject to different tax treatments.
Therefore, a definition of abuse of the right is urgently needed to make this institution more precise and limited in its application. When implementing the delegation, the Italian Government should take advantage of the indications that the EU Commission issued in December 2012, with regard to the fight against "aggressive operations". States must justify their tax claims - the Commission stated - with objective and predictable criteria, especially where there are no clear violations of written rules, motivating their claims with adequate investigations not only on the artificial nature of the operations, but also on the existence of a real circumvention of a clear and precise tax principle (for example, double deduction of costs or losses, double exemption of income, etc.).
As far as the sanctioning system is concerned, always with a view to turning the Italian tax system towards principles of certainty, objectivity and reasonableness, an intervention to reorganize and adapt administrative as well as criminal sanctions is urgently needed.
The administrative sanctions must be graduated in relation to the seriousness of the violations found. It seems like an elementary concept, yet in the current system it can happen that sanctions commensurate with the tax due are also triggered for the simple erroneous temporal attribution of income components and costs or for purely formal violations.
The problem is more relevant for criminal sanctions. Instead of being applied only in cases of fraudulent transactions, as is the case in other countries, in our system criminal sanctions can be triggered automatically when the quantitative thresholds of disputes by the tax offices are exceeded. And these are thresholds, set by law, expressed in absolute value, therefore not very significant for larger companies. The result is a multitude of prosecutions against directors of companies, often with effects on their reputation, even for minor violations due to purely factual errors or disputes of interpretation. It is necessary to realign our legal system to those abroad, to restore the penal sanction to its afflictive function.
The implementation of the powers on the abuse of law and on the review of sanctions constitutes a great opportunity to promote a new climate of trust and mutual understanding between economic operators and the financial administration, which gives a clearly perceivable signal to the markets on the new course initiated by the Italian tax system. Without this cultural leap it will not be possible to attract foreign investments nor will it be possible to retain national companies that have the possibility of locating elsewhere.
