The European Court of Justice blessed international tax arbitrage in a VAT transaction by means of which taxpayer was able to obtain a credit for input VAT on purchases while avoiding payment of output VAT on sales. The result was obtained thanks to an inconsistent characterization of the transaction for VAT purposes under UK and German law. UK treated the transaction as a financial service taxable in the country of supplier (Germany), while Germany treated it a as a sale of goods taxable in the country of the goods are sold (UK).
tax avoidance
Italian Tax Court Rules Against Bank on Tax Abusive Transactions
By Marco Rossi on
Italian tax court ruled against Italian bank on tax abusive transactions involving use of derivative contracts to generate tax credits and double dips. Italian tax administration wishes to rely on the ruling to resolve similar dispute with other banks. The total amount of income that can be recaptured is around three billion with an additional tax in excess of one billion plus interest and penalties. Additional comments on the ruling will follow on our blog…
Italian Supreme Court Held That Burden of Proof in Tax Avoidance Cases is Upon Taxpayers
By Marco Rossi on
Italian Supreme Court in judgment n. 8487 of April 8, 2009 placed upon taxpayers the burden to prove the existence of valid economic reasons to avoid the application of anti abuse provision and denial of tax benefits in tax avoidance transactions. The decision contradicts a previous ruling, n. 1465 issued on January 21, 2009 in which the burden of proof was placed upon the tax administration.…
Special Audits and Rulings for “Big Taxpayers”
By Marco Rossi on
Big taxpayers are subject to automatic audit…
Italy’s Tax Administration Clarifies New Tax Avoidance Ruling Procedure
By Marco Rossi on
Italy’s tax administration clarified new tax avoidance ruling procedure. The ruling must be issued within 120 days from taxpayer’s application. Failure to issue the ruling within 180 days from taxpayer’s application is deemed to be an approval of taxpayer’s position on the relevant issues of law.…
Burden of Proof of Tax Avoidance on Tax Administration, Italian Supreme Court Says
By Marco Rossi on
The Tax Section of the Italian Supreme Court in its judgment n. 1465 of January 21, 2009 held that the tax administration bears the burden to prove that a transaction is carried out solely to obtain a tax advantage, in order to disregard the transaction and deny the tax benefits obtained by the taxpayer under…