The Legislative Decree on Tax Sanctions No. 87 of June 14, 2024, has been in force since June 29, 2024, and implements some of the principles and guiding criteria of the tax delegation, as outlined in Law No. 111 of August 9, 2023. Specifically, the reform focuses on penalties, both criminal and administrative, and aims to streamline the sanctioning system to make it fairer and more proportionate.
Changes to Criminal Regulations
Regarding the changes to criminal regulations, the decree includes significant innovations, introducing new instances of non-punishability and other favorable provisions through the introduction of mitigating circumstances and mechanisms for compensation between the criminal and administrative sanctioning systems.
Failure to Pay Withholding Taxes Due or Certified
If the tax debt is being extinguished through installment payments, the criminal offense of failure to pay withholding taxes due or certified is not committed, and the taxpayer is not punished. The threshold for punishability remains unchanged and specifically applies to amounts exceeding one hundred fifty thousand euros. If the installment payment benefit is revoked, the individual is punished only if the remaining debt exceeds fifty thousand euros.
Failure to Pay VAT
The same rules apply to the criminal offense of failure to pay VAT: if the tax debt is being extinguished through installment payments, the criminal offense is not committed, and the taxpayer is not punished. Here too, the threshold for punishability remains unchanged at amounts exceeding two hundred fifty thousand euros. If the installment payment benefit is revoked, the individual is punished only if the remaining debt exceeds seventy-five thousand euros.
Unlawful Compensation
For the offense of unlawful compensation by means of credits that are not due, a special cause of non-punishability is provided when there are conditions of objective uncertainty regarding the specific elements or particular qualities that establish the eligibility of the credit, including the technical nature of the evaluations. This rule applies only to unlawful compensations by means of credits that are not due and does not cover those involving non-existent credits.
Causes of Non-Punishability
For the offenses of failure to pay withholding taxes due or certified and failure to pay VAT, it is established that they are not punishable if the offense depends on causes not attributable to the perpetrator that occurred after the withholding was made or after the VAT was collected, respectively.
Liquidity Crisis: Applicability of Non-Punishability
The decree considers a non-transitory liquidity crisis, due to the unenforceability of credits because of verified insolvency or over-indebtedness of third parties, or the non-payment of certain and collectible credits by public administrations, and the impossibility of taking actions to overcome the crisis, as a circumstance constituting a cause of non-punishability that the judge must consider.
Non-Punishability for Minor Nature of the Offence
The judge may apply the cause of non-punishability for minor nature of the offense, as regulated by the penal code, to cases of failure to pay withholding taxes due or certified, failure to pay VAT, and unlawful compensation. In doing so, the judge will assess factors such as the extent of the deviation of the evaded tax from the threshold for punishability, the complete fulfillment of the installment payment obligation, the amount of remaining debt, and the crisis situation.
Mitigating Circumstances
If the debt is not extinguished by the pre-trial deadline but is settled before the end of the first-degree trial, in the event of a criminal conviction, the penalties are reduced by up to half. Additionally, the accessory penalties are not applied, which include:
- Disqualification from holding executive positions in legal entities and companies for a period of no less than six months and no more than three years.
- Inability to contract with public administration for a period of no less than one year and no more than three years.
- Disqualification from representing and assisting in tax matters for a period of no less than one year and no more than five years.
- Permanent disqualification from serving as a member of the tax commission.
- Publication of the sentence.
Suspension of the Criminal Process with Extended Installment Payments
If the debt is not extinguished by the pre-trial deadline, the process is suspended when the debt is still being paid in installments. The duration of the suspension is one year, automatically extended by three months and further extended by another three months by the judge if deemed necessary to allow for the full payment of the debt.
The Principle of Ne Bis in Idem Between Criminal and Administrative Sanctions
The decree introduces a compensation mechanism that integrates the administrative and criminal sanctioning systems: when for the same act, involving the offenses of failure to pay withholding taxes due or certified, failure to pay VAT, and unlawful compensation, a criminal or administrative sanction, or an administrative sanction dependent on a crime, has been imposed on the subject, the judge or the administrative authority, at the time of determining the sanction within their competence, must consider the sanctions already definitively imposed by a previous ruling or sentence in order to reduce the corresponding measure.
Limitation on Seizure and Confiscation
Seizure cannot be ordered if the tax debt is being extinguished through installment payments, including through conciliatory procedures or settlement agreements with adherence.
The Res Judicata Effect of Criminal Acquittal in Tax and Cassation Proceedings
The decree expressly acknowledges that a criminal acquittal, stating that the act does not exist or the defendant did not commit it, is binding in tax proceedings both at the merits stage and in the legitimacy phase regarding the facts under evaluation.
Request for Plea Bargaining
For the offenses covered by this decree, a request for plea bargaining can only be made when, before the declaration of the opening of the first-degree trial, the tax debt, including administrative penalties and interest, has been extinguished, and when there is evidence of active repentance.
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