The case
The Court of Cassation on Dec. 6 2023 annulled the judgment by which the Venice Court of Appeal ruled the prescription of a tax crime (Article 5 Legislative Decree No. 74/20009), related to the 2011 year, in the case of a de facto director of a company who had failed to submit annual VAT returns for three years (2011, 2012, 2013) and confirmed the decision on confiscation, not reducing the amount referred to the 2011 year.
The amount of tax evaded had been determined to be a total of 2,018,843.92 euros and confiscation by equivalent was ordered up to the amount of that total sum on property in the defendant’s possession.
The appeal
The defendant appealed in cassation against the conviction, alleging violation of the discipline of confiscation by equivalent and asking to reduce the amount related to evasion for the 2011 tax year.
The decision of the Court of Cassation about the confiscation by equivalent
The Court of Cassation specified that the ruling on confiscation by equivalent should not have been confirmed in its entirety, but the confiscation should have been reduced to an amount corresponding to the amount of the profit related to the year 2011, which amounted to 1,067,923.85 euros. The Court of Cassation therefore annulled the appealed judgment limited to the amount of confiscation, redetermining the amount referring to the two years of tax crime for which the conviction was confirmed.
Confiscation by equivalent in tax crimes
Confiscation by equivalent is a penalty governed by Article 12 bis of the Legislative Decree No. 74/2000, effective from October 22, 2015.
Its purpose is to deprive the perpetrator of the tax crime of the economic benefit derived from the illicit act: in tax crimes, recovery of the direct profit of crime is impossible because the profit is realized through the non-payment of the due tax, and therefore not through the direct obtaining of a monetary gain, but thanks to an economic saving, which as such cannot be subjected to confiscation under Article 240 of the Criminal Code.
It is the confiscation of property of equivalent value as subsidiary or alternative to direct confiscation.
It differs from direct confiscation, which is instead a security measure that involves the confiscation of money constituting the profit or price of the crime, however found in the agent’s assets, as an advantage for the perpetrator of the tax crime.
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