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Tax disputes resolution in the European Union: the amicable resolution of disputes

Tax disputes resolution in the European Union: amicable resolution and the Italian legislative Decree no. 49/2020 

Tax disputes resolution in the European Union is regulated by the provisions stated in the Italian Legislative Decree No. 49/2020, entered into force since 25 June 2020, as implementation of Directive 2017/1852.

The above mentioned provisions govern procedures of amicable resolution of disputes related to the interpretation and application of international conventions against double taxation, which arise between the Italian competent authority, such as the Italian Revenue Agency, and the competent authority of the other Member States.

The Italian Decree further establishes the rights and the obligations of the parties involved in the disputes.

Amicable tax dispute resolution can involve any person who is a tax resident of Italy or of another Member state and whose taxation in involved in a tax controversy.

Tax disputes resolution in the European Union: the first step and the eligible persons 

Amicable tax disputes resolution procedures in the European Union can be initiated by the claimant who submits a complaint to the Italian Revenue Agency or the competent Authority of another Member State.

The complaint has to be submitted within 3 years from the receipt of the first notification of the action or other equivalent document, resulting in the question in dispute. It is subject to administrative tax procedures implying the enforcement of taxation, while it does not require the previous establishment of national dispute procedures.

No complaint can be submitted in case of disputes already settled by Court decision or by judicial conciliation procedures.

In this case, anyway, the interested party still has access to any judicial redress procedures as provided for by national Law.

Tax disputes resolution in the European Union: the decisional step and the content of the complaint 

According to the Italian Legislative Decree No. 49/2020, any complaint must include at least the following information:

- any information necessary for identification of the counterparty;

- tax periods concerned;

- details of the case;

- the provisions of the Convention on double taxation being interpreted in relation to the question in dispute.

The complaint must be written in one of the involved Member States' languages.

Once the Italian revenue Agency receives a complaint, it is required to take a decision on the acceptance or rejection within 6 months of its receipt or within 6 months of the receipt of additional information.

More in detail, according to Article 6 of the Italian Legislative Decree No. 49/2020, a complaint can be rejected only in case of preclusion to claim or inadmissibility, for example when it lacks logic, legal, and formal grounds, when it was not submitted within the 3-year period mentioned above, or when the dispute has already been settled by Court decision.

In the absence of a decision rejecting the complaint, the latter is deemed to be accepted, and a procedure of amicable resolution of tax disputes resolution is started, which has to be closed within 2 years, starting from the last notification of a decision of one of the Member States on the acceptance of the complaint.

Once the competent authorities of the Member States have reached an agreement, they have to notify this agreement to the affected person within 30 days from the date of the agreement. The same applies in case of no agreement.

In case of agreement the Italian Revenue Agency may authorize the reimbursement or remission of non-due taxes to the advantage of the affected party.

The affected person is entitled to appeal against the decision of the tax authorities to the territorially competent Tax Commission or to the competent Court of another Member State.

Tax disputes resolution in the European Union: the arbitration step and the Advisory Commission 

Any taxpayer can request the Italian Revenue Agency and the competent authorities of the Member States concerned, to set up an Advisory Commission in order to avoid the resolution of tax dispute procedure to become a mere negotiation between States. The Advisory Commission is set up when:

- The complaint submitted was rejected by at least one of the competent authorities of Member States concerned;

- The competent authorities of the Member States concerned accept the complaint that was submitted by the affected person but fail to reach an agreement on how to resolve the question in dispute.

As appears from the above, the procedure of amicable resolution of tax disputes is aimed at creating greater legal certainty in tax matters, as well as creating a more favourable environment for companies and for cross-border workers, by reducing costs of compliance and administrative burdens.

Taxpayers can always refer to an Advisory Commission playing the role of arbiter in case the Member States' competent Authorities cannot reach a mutual agreement.

Tax disputes resolution in the European Union: amicable resolution with the support of Arnone&Sicomo international Law Firm 

Arnone&Sicomo international Law Firm has a team of lawyers specialized in international tax law, which can provide you assistance with issues relating to tax disputes resolution, especially when those disputes arise from the interpretation and application of agreements and conventions that provide for the elimination of double taxation of income and capital between EU-States.

Do you need assistance in matters of tax law and want to learn more about agreements and conventions that provide for double taxation? Contact us.

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