In the context of European measures to combat tax evasion and avoidance, Directive 2018/822/EU, implemented in Italy by Legislative Decree 100/2020, provides for the obligation to communicate the so-called “aggressive tax planning cross-border mechanisms” or schemes, agreements or projects involving several EU states – or even EU states and third countries – and which are potentially capable of determining prevailing tax advantages or in any case of circumventing other regulatory obligations, such as the automatic exchange of information and the arrangements regarding the beneficial owner.
The deadline for the first communications was recently set at 28.02.2021 both as regards previous operations, i.e. the mechanisms whose first phase was put in place between 06.25.2018 and 06.30.2020, and as regards mechanisms put in place in the period between 07.01.2020 and 12.31.2020. The specific “fully operational” deadlines for the mechanisms put in place starting from 01.01.2021 were then indicated, which can be summarized in the 30 days following the start of the mechanism (with some specific corrective measures for intermediaries and taxpayers).
The obligation to notify is placed on intermediaries and taxpayers who have a “connection” with the Italian territory which is substantiated in at least one of the following alternative conditions:
- tax residency;
- possession of a permanent establishment in Italy through which the services of the cross-border mechanism are provided (as regards intermediaries) or which benefits from the cross-border mechanism (as regards taxpayers);
- membership of a professional association of legal, tax or consultancy services in Italy (as regards intermediaries);
- performance of the business in Italy (for taxpayers).
The recent circular 10.02.2021 n. 2 of the Revenue Agency provided the first necessary clarifications regarding the discipline, with reference to the multiple interpretative nodes that the same poses, above all in relation to the role of the obliged subjects, as well as the cases that are likely to fall within its ambit of application.
The burden of communication is mainly placed on the intermediary (according to the circumstances, in his dual capacity as promoter or service provider), given that the taxpayer (except in specific cases of exemption) is invested with the communication obligations in cases residuals in which the intermediary is exempt or where there are no intermediaries involved in the mechanism or where they have not provided the communication to the Revenue Agency, to the Financial Administration of another EU or non-EU State which has an agreement for the exchange of information according to directive 2018/822/EU.
Given that assistance in tax audits or the sending of declarations, nor assistance in litigation or the mere recognition of the mechanism during the audit, does not involve the qualification of intermediary, the cases of exemption for intermediaries are limited to fulfilment by other intermediaries involved or the requirements of professional secrecy or even if from the information transmitted criminal liability of the intermediaries themselves may emerge.
The decree contains the specification of the criteria on the basis of which, in the presence of certain distinctive elements or hallmarks (and exactly, in the presence of the risky cases referred to in Annex 1, letters A, B, C and E, of Legislative Decree No. 100/2020), the reporting obligations of the cross-border mechanism to the Revenue Agency are triggered.
The aforementioned cases are relevant for the purposes of the communication only if likely to determine a tax advantage in terms of reduction of the taxes envisaged by Directive 2011/16/EU, i.e. taxes other than VAT, customs duties and excise duties and therefore IRPEF, IRES and related surtaxes, IRAP, substitute taxes, local, registration, mortgage and cadastral taxes, inheritance and gift taxes; moreover, the tax advantage, in relation to certain cases that the law identifies, must qualify as prevalent with respect to any other non-tax advantages achieved by the taxpayer (so-called main benefit test).
The main benefit test gives rise to the obligation of communication (for the relevant cases) in the event that the tax advantage relating to taxes deriving from the application of the cross-border mechanism that can be obtained by one or more taxpayers is greater than 50% of the sum of the tax advantage and non-tax benefits (understood as other benefits of an economic nature). The tax advantage is quantified as the difference between the taxes to be paid on the basis of the cross-border mechanism and the same taxes that would have been paid in the absence of this mechanism.
The tax reduction must be verified in an EU state or other foreign jurisdiction with which there is an agreement for the exchange of data according to Directive 2018/822/EU.
However, in the presence of the cases listed under letter D of Annex 1 (specific distinctive elements concerning the exchange of information or beneficial ownership), the communication is in any case due (regardless of the prevalence of the tax advantage).
The greater complexity of the regulation therefore concerns precisely the identification of the cases of cross-border mechanisms that must be communicated and above all the quantification of the fiscal and non-fiscal advantage deriving from the transaction, with reference not only to the Italian territory and also taking into account the circumstance that for intermediaries the minimum standard of knowledge of the cases required by the law, in many cases it is considered “presumed”.
Moreover, the hallmarks refer in many cases to the identification of the list of jurisdictions of third countries which have been evaluated by the EU States or by the OECD as “non-cooperative jurisdictions” or to the identification of the “preferential foreign tax regimes” or even the identification of the “States that guarantee the automatic exchange of financial account data”.
Specific rules also concern holding companies and relations between “associated” companies, as well as the specific case of England for which the application profiles must also be interpreted in the light of Brexit, which led to the almost total removal for the United Kingdom of the reporting deriving from directive 2018/822/2018.