The applicability of the administrative distraint to VAT
The Supreme Court, with the sentence no. 2320 filed on 31 January 2020, has been called to resolve two questions:
- The applicability of the administrative distraint, regulated by art. 23 Legislative Decree no. 472/1997 to the VAT refunds, when the Financial Administration has already got a surety by the taxpayer, in accordance with the art. 38-bis DPR no. 633/1972, and it has a credit towards the same taxpayer.
- The suspension of refund of VAT credits until a final judgement.
About the first question, the Supreme Court excludes the applicability of the administrative distraint, regulated by art. 23 Legislative Decree no. 472/1997 and by the art. 69 Royal Decree no. 2440/23, to VAT refunds and declares the alternativity between the art. 38-bis DPR no. 633/1972 and the above mentioned precautionary measures.
The art. 38-bis DPR no. 633/1972, in fact, provides that the taxpayer when lodges a petition for the refund must give a security, like a surety or caution, to the Financial Administration. The same article provides that the Financial Administration can suspend the refunds until the trial is over, when in the same tax period, the taxpayer is charged with the offences regulated by the art. 4, par. 1, no. 5, L.D. no. 429/1982 (currently refers to the artt. 2 and 8 Legislative Decree no. 74/2000).
Therefore, the judges have excluded the possibility of Financial Administration “to takes precautionary measures twice, even if with different purposes, in relation to the same credit” because it would be in contrast with the art. 10 L. no. 212/2000 (Taxpayer’s Statute) and with art. 2 of the Constitution. This double security would be “unjustified for the Exchequer, who can claim against the security already given by the taxpayer, and it would be an excessive load for the taxpayer, that after giving the security, he’d see his credit subjected to administrative distraint”.
About the second question, the Court declares that the administrative distraint stops to have effect when the existence of credit fails. In these terms must be interpreted the art. 23 Legislative Decree no. 472/1997 that: “the suspension of the payment works within limits of the sum corresponding to the part of the act not annulled by the same sentence, when it is not already final”.