Beginning with the IRAP Evaluation Notice, the Court of Cassation has emphasized the importance of the competence principle, not just formally. Details are in Order No. 13909/2022.
Court of Cassation, withDecree n. 14909/2022explained the importance, not only formally, of Efficiency principle.
In the present case, the taxpayer has filed an appeal against A Evaluation Notice for IRAPfor the 2009 tax year.
The Bureau believes that the taxpayer, undertaking the construction activity, failed, in the 2009 tax year, to account for revenue transferred to advances paid from clients in 2007 and 2008, against the establishment of Housing units Completed in the year under review.
- Court of Cassation – Order No. 14909 of May 11, 2022
- Text of Court of Cassation Order No. 14909 dated May 11, 2022
Facts of Order No. No. 14909 of 2022 regarding the compatibility of the principle of efficiency
The Regional Tax Commission accepted the appeal, with a sentence later also confirmed by the Regional Tax Commission, which, in Accounting method From the amounts collected as an advance and for the applicability of itart. 109 from Dpr. n. 917 for 1986indicated that the amounts that the office wanted to recover for 2009 had already been billed, accounted for, and declared in 2007 and 2008, and therefore, even if this behavior did not meet the accounting standard OIC 23, published on September 16, 2015 and in the accounting history of the transactions in question , adherence to the management thesis will lead to a Illegal double taxation.
L ‘revenue agency Finally, he filed an appeal in cassation, alleging contravention and wrong application of art. 109 from Dpr. n. No. 917 of 1986, due to the mandatory nature of Principle of Accounting Efficiency.
The basis for the appeal, according to the Supreme Court, was well-founded.
highlight i Sharia judges which, in terms of Commercial incomefor the purpose of determiningexercise competence to which revenues, expenses and other positive and negative components of income are temporarily attributed, Article 109 of the Tweer – under which revenues, costs and other charges contribute to the formation of incomeexercise competence Provided that its presence or amount can be objectively determined – intended to reconcile the need for computation All components of the exercise of competence With the need not to burden the taxpayer with a burden extremely difficult to comply with, so that this rule must be interpreted in the sense that the duty to account for these components in the reference year stops only in the face of those revenues and costs not yet recognized in the income determinationi.e. the time the declaration was drafted and submitted (cf. Cass. n. 36600 for 2021).
With respect to corporate income taxes, for the purposes of determining the relevant year in which revenue, expenses and other positive and negative components of income are to be allocated in due time, in accordance with Section 109 of the above-mentioned account at the moment in which the two terms are allocated “Contexts”And the With regard to subsistence, the SelectabilityAnd the Regarding the amount, which the tax authorities have to prove in respect of Positive componentsand the taxpayer in relation to the negative components (see Cass. n. 19166 of 2021).
With regard to business income, the Supreme Court notes, the rules regarding time attribution of negative components, generally dictated by twerking, are mandatory, as taxpayers are not allowed to choose a cost deduction in a different year. designated by law as exercise competenceso as to change Ad result.
The application of this criterion does not, in and of itself, imply a result double taxwhich can be avoided by the taxpayer by requesting a refund of the higher tax, which can be proposed, within the normal limits of limitation in accordance with Article 2935 of the Italian Civil Code, as of the formation of the judgment on the legality of the recovery of costs in respect of Pension is not a matter of (See Cas. 18035 for 2021).
Regarding the determination of commercial income, the court adds again in the text door 2004 . repair (Article 75 of Presidential Decree 917/86) in force In terms of time In the case in question, the obligatory principle was the one according to which profits are realized only in Fiscal year closing date, taking into account, pursuant to art. 2423 bis, paragraph 1, nn. 2 and 3 of the Italian Civil Code, of income and fees for the year, regardless of the date of collection or payment, Announcing potential assets In different financial years (see Cass. n. 4398 for 2020).
Therefore, the law does not allow importance to be given to the date on which the invoice for expenses incurred is received, nor does it allow Deduction of costs in fiscal years other than the relevant periodSince the taxpayer cannot be left to be the arbiter in choosing the period in which obligations are to be recorded, since attributing a particular cost to one year rather than another can, in short, result inChange advertising resultsby offsetting mechanisms for revenue and costs in individual fiscal years (see Cass., Cass. no. 18401 of 2018).
The decision of the regional tax commission did not comply with the above principles, since – this confirms the method of accounting for the amounts collected as an advance and on the applicability of the article. 109 from TUIR, the amounts the office wanted to recover for 2009 had already been billed, accounted for and declared in 2007 and 2008, therefore, even if this behavior did not satisfy Accounting Standard OIC 23adherence to the thesis of the office would have led to an unlawful double taxation – on the one hand, he erred in associating it with the fact that the advances had already been invoiced, accounted for and declared in years prior to the relevant event, and instead of taking into account the date of delivery of the goods, and from On the other hand, it was considered a limitable error Budget principlesbelieving that the taxpayer can freely choose Principle of criticism instead of jurisdiction.
On the other hand, the appellate courts finally decided thatThe application of the principle of efficiency necessarily implied double taxthe consequences of this, the court notes, could instead be avoided by the taxpayer with Higher tax refund request.
In conclusion, regardless of the specific procedural case, in more general terms, the following can also be highlighted.
Focus on efficiency
Paragraph 1 of Article 109 states that “Revenues, expenses and other positive and negative components, not otherwise provided by the preceding rules of this section, contribute to the formation of Income in the year of specialization; However, revenues, expenses and other components whose existence is not yet certain in the relevant year or the amount can be determined objectively in the year in which these circumstances occur.”.
Thus, the principle of jurisdiction is to take into account, for tax purposes, not the period In which the cost was paid, but in which it was paidObligation to bear the burden (or the right to a return, in the case of positive ingredients).
However, this criterion has no absolute value and its first exception is already in paragraph 1 of Article 109 of TUIR, which states that in the case of the exercise of jurisdiction, the positive and negative components of income are uncertain in their existence and It cannot be determined objectively In the amount, these shall in any case be accounted for in the year in which these conditions will occur, i.e. when they are confirmed ina In the Quantumtherefore, when certainty relates to the indisputability of the existence of cost and goal setting relates instead toIts quantitative estimation is indisputable.
And if it is true that a cost (or revenue) is considered certain when its existence has already occurred in the year of efficiency, then it is also true that the same cost (or revenue) is considered certain can be determined objectively Not only when it is known exactly how much, but also when the methods for determining it are simply known, for example it can be inferred from official documents (see contracts, etc.).
It is therefore not necessary to radicalize the concept of certainty, otherwise there would be a risk of arriving at an increased assumption that the certainty (and determination) of a cost (or revenue) is reached only when at the time of paymentAnd so you actually end up marryingThe opposite principle of the case.
Thus, certainty, in the physical sense, cannot be understood as an effective numerical variance, but in the legal sense: the income component is certain, i.e. when it is based on the existence of an address that results in legal effects present in Tax period closes and/or the deadline for filing the return relating to that period.
“Explorer. Devoted travel specialist. Web expert. Organizer. Social media geek. Coffee enthusiast. Extreme troublemaker. Food trailblazer. Total bacon buff.”