04 Jul failure to pay VAT

The crime of failure to pay VAT represents one of the main cases of Italian criminal tax law and constitutes one of the tools through which the legislator intended to strengthen the protection of the financial interests of the State, providing criminal consequences against the taxpayer who, despite having correctly declared your tax liability, subsequently fails to proceed with the relevant payment. The discipline is contained in the art. 10-ter del D.Lgs. 10 March 2000, n. 74, introduced by legislative decree no. 223 of the 2006, who punishes anyone who doesn't pay, within the deadline established by current legislation for the payment of the advance relating to the following tax period, the value added tax payable according to the annual declaration, when the amount of unpaid tax exceeds the punishability threshold currently set in euros 250.000 for each tax period. The legislative choice is part of a broader process to combat tax evasion which clearly distinguishes administrative violations from those deemed worthy of criminal sanctions, reserving the latter exclusively for conduct characterized by high economic offensiveness. The peculiarity of the case consists in the fact that the legislator does not sanction fraudulent behavior aimed at hiding the tax debt, but rather the failure to fulfill a tax obligation already recognized by the taxpayer himself through the presentation of the annual VAT return, a circumstance which has led the doctrine to qualify this crime as a proper crime of omission, instantaneous and of mere conduct. In fact, the crime occurs when the deadline established by law for the payment of the tax expires without the taxpayer having made the payment., provided that the quantitative threshold established by the art. is exceeded. 10-Tue, while the effects of non-compliance can last over time without transforming the case into a permanent crime. This qualification has been confirmed several times by the Court of Cassation, which specified that the moment of consummation coincides exclusively with the expiry of the term established by law and that from that moment the statute of limitations for the crime also begins to run. The legal asset protected by the law has been identified in the State's interest in the timely collection of tax revenues and, more generally, to the regular acquisition of the resources necessary to finance public spending. In fact, VAT has peculiar characteristics compared to other taxes, since it is collected by the taxable person from its customers and subsequently repaid to the Treasury; it follows that the taxpayer assumes a particularly delicate position, being called upon to transfer to the State sums already received as part of their economic activity. It was precisely this peculiarity that justified it, second part of the doctrine, the legislator's choice to attribute criminal relevance to the failure to remit the tax above a certain threshold, considering it detrimental to the public interest in the regular acquisition of tax revenue. For the crime to be configurable, several conditions must be met simultaneously. First of all, the annual VAT return must have been validly presented from which a tax debt actually due emerges; secondly, the taxpayer must fail to make the payment within the deadline established by law; Furthermore, the unpaid amount must exceed the punishability threshold established by the art. 10-Tue; in the end, the conduct must be supported by the subjective element required by the incriminating rule. The absence of even one of these requirements prevents criminal liability from being established. From a subjective point of view, the jurisprudence of the Court of Cassation has now consolidated the principle according to which the crime of failure to pay VAT requires exclusively generic intent. It is therefore not necessary to demonstrate fraudulent or evasive intent, the awareness and desire not to make the payment being sufficient despite being fully aware of the existence of the debt resulting from the tax declaration. In numerous rulings the Supreme Court has stated that the presentation of the annual return itself constitutes a highly significant element for the purposes of proving fraud, since it demonstrates full knowledge on the part of the taxpayer of the tax obligation assumed towards the Treasury. Consequently, the choice to allocate the available financial resources to other business or personal needs normally integrates the psychological element required by the incriminating case. One of the most debated aspects both in doctrine and in jurisprudence concerns the impact of the company's liquidity crisis on the criminal liability of the director or entrepreneur. On this point, the Court of Cassation has progressively developed a particularly rigorous orientation, stating that mere economic difficulty does not constitute, in itself, a suitable cause to exclude the intent or illegality of the conduct. According to the now prevailing direction, the taxpayer is required to demonstrate that he has taken every reasonable initiative aimed at finding the resources necessary to fulfill the tax obligation, recurring, where necessary, to bank credit, to the disposal of company assets, the use of personal assets or other appropriate measures to deal with the financial situation. Only an absolute objective impossibility of fulfilling, not attributable to the taxpayer and rigorously proven, can take on importance as a cause for excluding guilt. The Supreme Court has in fact reiterated in numerous decisions that the entrepreneur cannot use the sums allocated to the Treasury to finance the business activity, favoring the payment of other debts over tax debts, since such a choice constitutes the expression of a conscious management option for which he fully assumes the legal risk. The identification of the active subject of the crime has also given rise to important jurisprudential elaboration. In the case of companies, indeed, the responsibility ordinarily falls on the director in office at the time of expiry of the deadline for payment of the tax, as holder of the power-duty to fulfill the tax obligations of the entity. The Court of Cassation has clarified that it is not so much the mere formal investiture that is relevant, as well as the actual exercise of management and decision-making powers, with the consequence that even de facto directors can be held accountable for the crime if they have actually exercised managerial functions in corporate management. Particular attention was also paid to the relationships between administrative liability and criminal liability. Failure to pay VAT results in fact, in addition to the application of administrative tax sanctions and interest provided for by tax legislation, also the possible establishment of criminal proceedings if all the elements of the case envisaged by the art are integrated. 10-Tue. This double-track sanctioning system has been the subject of extensive debate in both national and supranational jurisprudence, with particular reference to the principle of ne bis in idem. However, the most recent guidelines have deemed the coexistence of the two forms of responsibility compatible, provided that they pursue complementary purposes, are coordinated with each other and respect the principle of proportionality of the sanctioning response. Even the doctrine has long questioned the nature and function of the art. 10-Tue, developing different orientations. Some scholars consider the rule to be an expression of advance protection of the State's fiscal interest, based on the particular position of the taxpayer as the person responsible for remitting the tax already collected. Other authors, instead, have highlighted how the case presents profoundly different characteristics compared to traditional tax crimes, any element of fraud being completely absent, artifice or document concealment. They were not missed, Furthermore, critical positions towards the particularly rigorous jurisprudential orientation regarding liquidity crises, considered by the doctrine not always fully consistent with the constitutional principle of guilt and with the principle of personality of criminal responsibility enshrined in art.. 27 the Constitution. According to these settings, a more careful valorisation of the concrete psychological attitude of the agent would make it possible to avoid automatic sanctioning mechanisms incompatible with a modern conception of economic criminal law. The recent reforms of the criminal tax system have finally highlighted a growing attention towards the tools for defining tax debt and recovering sums owed, valorising installment payments and other forms of spontaneous compliance as elements likely to affect the criminal relevance of the conduct and the application of precautionary measures. The regulatory evolution demonstrates how the legislator today pursues a dual objective: on the one hand, ensure effective repression of the conduct that is most harmful to the interests of the tax authorities and, on the other, encourage the timely recovery of tax credit, privileging, where possible, the satisfaction of the tax interest compared to the mere punishment of the taxpayer. In conclusion, the crime of failure to pay VAT today represents one of the central cases of Italian criminal tax law, characterized by a discipline now widely consolidated both on a regulatory and jurisprudential level. The interpretation provided by the Court of Cassation has progressively outlined a particularly rigorous system, in which failure to pay the declared tax takes on criminal significance not only as a violation of a tax obligation, but as a violation of the public interest in the correct and timely acquisition of tax revenues, imposing on economic operators and corporate administrators a high level of diligence in the management of financial resources and in the fulfillment of obligations towards the Treasury.