The refund of the EU withholding tax is allowable also in case of voluntary disclosure

The Regional Tax Court in Lombardia, with the decision n. 4031/02/2018, ruled in favor of an individual taxpayer who submitted the voluntary disclosure, stating that the denial by the Revenue Agency of the refund of any “EU withholding tax” already paid by the taxpayer, is illegal and not compliant with the double taxation agreement in force between the European Union and Switzerland, accordingly to Directive 2003/48/EC.

In the case in point, the taxpayer accessed the voluntary disclosure procedure to integrate previous year’s tax returns for periods from 2010 to 2013, disclosing incomes not previously indicated. After filing the integration to the tax returns, and having paid taxes and penalties accordingly, he submitted an application to claim back the EU withholding tax originally levied at source on the disclosed incomes. The Tax Office denied him the refund of these amounts paid in excess.

The taxpayer, then, appealed the Tax Office’s denial upon the EU withholding tax refund.
The Tax Courts both in first and second instance, had given their final judgments in favor of the appellant’s claim and had ordered the Tax Office to pay back the amounts. Indeed, the Court ruled, the submission of voluntary disclosure had aimed to disclose foreign income which, if declared, it would have provided a tax credit for the amount of the withholding tax levied at source; however, the Tax Office did not consider this when assessing taxes due to the integration of the tax returns, and practically, taxed the same income twice.

Please note in accordance with the case law of the Regional Tax Court the following decisions: C.T. Prov. Varese n. 309/3/17, C.T. Prov. Milano nn. 19, 20 and 21/11/18. Contrariwise, the following decisions: C.T. Prov. Como n. 33/3/2018 e C.T. Prov. Brescia n. 358/2/2018.

Professionals at Andersen & Legal in Italy are at your complete disposal to provide you with the necessary clarifications in relation to the EU withholding refund.

Please note that the deadline to submit an application for the EU withholding refund is the two-year as per Article 21 of Legislative Decree n. 546/92, from the date of payment of voluntary disclosure procedure.