IRAP: Stop doubling of terms

In the presence of tax offense the doubling of terms is not applicable for the IRAP : this is one of the position taken by the Italian Revenue Agency.

With reference to the tax assessments activities related to IRAP reference is made to article 43 DPR 600/1973. Until the fiscal year 2015 this rule stated that in case of a breach with a tax offences set out in Legislative Decree n.74/2000, the terms for the tax assessment were doubled.

Nevertheless, this time extension appeared to be questionable as tax crimes dealt with only with offenses related to the Income Tax and VAT. On this matter, however, both the Italian Financial Police and the Supreme Tax Court had already excluded the application of the time extension. The latter would be unlawful given the lack of a criminal offence.

Finally, the Italian Revenue Agency admitted his wrong interpretation of the rule until now and decided to give up the tax litigations related to the IRAP where doubling of terms were applied.

Obviously, this decision should affect the procedures already in place for tax disputes according to the Legislative Decree 119/2018. For example, with reference to the Audit Report received until October 24th, 2018 we can assume that the taxpayer can accept the claims contained in the Audit Report without considering the IRAP for the years included in the time extension. While regarding the notice of assessments the cancellation is expected from the Italian Revenue Agency itself.

Finally, it would be necessary that the Offices with regard to pending tax litigation proceed to cancel the tax dispute in order to come to a conclusion considering the adjustment related to the double of terms for IRAP.