ITALIAN NATIONAL REPORTS - Università Degli Studi Di Palermo

ITALIAN NATIONAL REPORTS – WASHINGTON 2010
THE CARDOZO ELECTRONIC LAW BULLETIN, VOL. 16(1) - SPECIAL ISSUE
4) once it is determined that Art. 37-bis can be applied as a G.A.A.R., one
should assess whether the transaction lacks of a valid business purpose; only if
the transaction lacks of a valid business purpose, one should proceed to
verify the other requirements.
5) once it is determined that the transaction lacks of a valid business purpose,
one should assess the requirements of “By-passing” and/or “Purposive
Scheme”;
6) once all requirements described above at indent 4 through 5 are assessed,
the tax effects of the transaction can be disregarded by Tax Authorities for
tax purposes.
The actual application of the above described six pronged test lies among
the prerogatives of Tax Authorities and, in particular, the I.R.A. who is in charge
of issuing pre-emptive rulings and conducting tax audits from which a tax
assessment notice based on Art. 37 – bis of Presidential Decre No.600 could well
be the outcome. The same interpretative and logical process is then carried out
by tax courts when the deeds issued by the I.R.A. are challenged by the taxpayer.
As earlier mentioned, the current Art. 37 – bis of Presidential Decree No.
600/1973 had a forerunner in Art. 10, Para. 1 of Law No. 408/90 which,
according to many commentators, was the real breakthrough in the Italian tax
jurisdiction with respect to the introduction of a fully fledged tax avoidance rule ii .
However, as it will be outlined hereinafter, this first attempt to introduce
an anti-avoidance provision in the Italian tax system did not prove successful and
required subsequent amendments which lead to the current Art. 37 – bis of
Presidential Decree No. 600/1973. The basic structure of art. 10, Law No.
408/1990 was the following:
a) (fairly restricted) list of pre-defined transactions;
b) detection of an intent exclusively aimed at tax saving;
c) detection of the lack of “valid business purpose”;
d) detection of a “fraudulent behaviour”.
Art. 28 of Law No. 724/1994 subsequently amended said provision by
eliminating a specific reference to certain transactions on shares and added a
further list of transactions encompassed under the purpose of G.A.A.R. (such as
liquidations, valuation of participations and other securities).
Art. 28 of Law No. 724/1994 also clarified that the “lack of valid business
purpose” and the “exclusive aim of fraudulently obtaining tax saving” jointly constituted a
ii In this sense, se, among the most recent literature I. VACCA, „Abuso del diritto ed elusione fiscale‟, (2008) 1
Riv. dir. trib., 1069, according to whom the introduction of Art. 10 of Law No. 408/1990 was an “absolute novelty”.