The tax undue refund is deemed to be an omitted payment of a tax

The Supreme Tax Court with decision no. 20585 of 19 July 2021, ruled that in case of undue refund, pursuant to Article 13 of Legislative Decree no. 471 of 1997, the Tax Authority shall apply administrative penalties for omitted payment of a tax.

In the current case, a company filed an appeal against a tax assessment notice issued by Tax Office imposing penalties for non-payment of VAT as a result of an undue refund of that tax.

The Supreme Tax Court has been agreed with the Tax Office and ruled that getting a VAT refund that was not due can be penalized under Article 13 of Legislative Decree 471/97, which punishes the non-payment of taxes.

Article 13 provides that the penalty set out in paragraph 1 shall also apply in all cases of non-payment of a tax or part of it by the required deadline.

According to the Supreme Tax Court, as in the case of the omitted payment of a tax, the undue refund entails a delay for the Tax Office in collecting the sums due.

An administrative penalty is consequently applied to repress that shortfall in the tax authorities’ accounts.

On the contrary, the Supreme Tax Court with decision no. 15938 of 6 July 2010, ruled that in according with the principle of legality the undue refunds are not generally subject to penalties.

Cecilia Breviglieri