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Roberto Cordeiro Guerra

Bone of contention, disputes settled by the decisions under review, is the existence of evidence sufficient to locate the seat of Italy of companies incorporated abroad. A mountain of circumstantial evidence evaluation of complex and emerging issues relevant hermeneutical, referring to both the law and conventional and Community; problems that only the decision of the Florentine second degree are carefully identified and adequately justified. Also indicated the further application profile of undoubted interest on the rituals and validity of notifications.

Issues relevant to the decision: the place of notification; the characteristic elements of the so-called "esterovestizione"; the seat of
The decisions under review are of interest alive and fresh face for the first time since[1] so widespread these issues are closely related to the challenge of the Italian residence in companies with their registered office abroad[2], and more specifically within the European Community.
In detail, following challenges to findings that located in Italy, the headquarters of the foreign teams (Dutch, German, etc..), control of a parent Italian[3], were submitted to the tax court issues specific, both in terms of interpretation of the relevant provisions (internal source of, Community and conventional) with reference to the evaluation of evidence in support of the tax claim.
The most common issues of keen interest in investing:
a) notification, and in particular the identification of the place from which it must be done in the case of companies with registered offices abroad which, however, is attributed office tax residence in Italy;
b) the concept of "esterovestizione", often mentioned as the main core of the dispute;
c) The concept of office administration and evaluation of the evidence likely to prove the prevalence of residence for conventional, the same way as the composite view of the relevant legal.

The issues relating to notification
It is significant that all the judgments analyzed have had to deal with exceptions relating to cancellation and / or non-existence of notifications of assessments contested. The problem, in sintesi, arises along the lines of the regulatory framework in force, according to which:
a) "Entities other than natural persons resident for tax purposes in the municipality in which it has its registered office or, in the absence, the head office; if this fails, they are resident for tax purposes in the municipality where it established a branch office or a permanent establishment in the absence and in the community in which they exercise the predominant part of their activity " (art. 60, Latvian. c, D.P.R. n 600/1973);
b) "The notification must be made in the tax residence of the recipient" (art. 60, cit.).
Starting from this good, judges follow for the most common approach, consistently in dealing with the merits of the case (of the evidence adduced to prove the residence of Italian society in the years invested by assessment) in order to resolve preliminary issues raised regarding the validity of the notification of the contested.
Without going into the details of the issues raised with regard to the peculiarities of each notification, it seems that more than one such path raises concerns, as perceived by the more considered judgment of the Regional Tax Commission Tuscany, which precisely is notable for attempting to distance itself from this sort of "reverse" the order of importance of procedural matters.
To be enhanced, particular, the statement of the Board of Florentine according to which "the task did not run the only operation to notify that it would have been reasonable to make, place that the identification of domicile for tax through withholding location of the head office of the company in Italy was not the assumption of fact on which there was no dispute, but instead was one of the key points of dispute, so the office could not take for granted what was checked and, obviously, litigation ».
In other words, if it is the seat of the sub judice, and instead peaceful the registered office of the company, the only way to ensure that the notification will achieve its typical purpose - to inform the recipient the act - is to deliver it there, also by post.
The reasoning, shared, can be further specified and supported. Identifying the place from which the notice of assessment notice, must necessarily be referred to the existence of a current home, existing at the time in which service is performed, without being able to take the same survey the location of the home at the time (previous) of the alleged offenses.
In this respect the letter of the law militate ("Entities other than natural persons resident for tax purposes in the municipality in which it has its registered office or, in the absence, the administrative headquarters ») and the need for an interpretation consistent with the function of the institution and the principles that govern the discipline.
The notification, as a means of production and dissemination of knowledge[4], to reach its typical purpose must be addressed in a place that, because of this link with the recipient, reasonably be expected to do the deed deposited therein will enter the sphere of knowledge of the latter[5] It, at the time of notification, none of the elements listed in Article. 60 can be located in the State, can hardly imagine a perpetuatio of residence (semel resident, semper resident), by virtue of which becomes legitimate to make the same notification when the recipient has ever had a home (the existence of which, moreover, is at issue).
So, in order to avoid a kind of short circuit in the application of a subset of provisions (the tax on the service of documents) that belong to the larger set of rules on reporting, will inevitably, as suggested by the Board of Florentine, pursue a (notification from the registered office known abroad, also by post) inspired precisely to the general rules.
A different hermeneutic reconstruction (notification at the address disputed even in the absence of its relevance), legislation to expose founded complaints of violation of constitutional principles (Articles. 3 e 24 Cost.). Even the Constitutional Court, with the recent ruling n. 366 of 7 November 2007, declared unconstitutional the provisions of Articles. 58, Sections 1 e 2, second period, e 60, comma 1, letters andc, and and f, del D.P.R. 29 settembre 1973, n. 600, e dell’art. 26, last paragraph, del D.P.R. 29 settembre 1973, n. 602 "Insofar as it provides, in the case of notification to a person having residence abroad knowable by the financial, that the provisions contained in. 142 of the Code of Civil Procedure do not apply ".
'' The illegitimacy of the provisions in question was justified on the grounds that "the exclusion of the applicability of Article. 142 of the Code of Civil Procedure is contrary to Articles. 24 and 3 the Constitution, because it affects the exercise of the right of defense of the addressee, assuring no actual knowledge of the act and causing unjustified unequal treatment between persons resident abroad, for which the current legal framework does not guarantee the actual knowledge of the acts Tax, and other recipients of notifications of such acts, for which instead said knowledge is guaranteed '[6].
In short, Check ruled on the principle that - worth the violation of the right to defense and the right of equal treatment between nationals and foreigners - everyone should get the service of documents (including those tax), at your home or place, regardless of whether this is located outside of the Italian territory.
Consider the reasons that led to the declaration of unconstitutionality of referenced standards (involving the choice to prefer the interest of the taxpayer to the actual knowledge of the act to the administration, whenever the Administration which is able to search and find the address of the taxable person), it must be observed as such need to protect the taxpayer are also discernible in the cases examined by the decisions commented.
Not only. If the registered office of the company to which the notification is placed in a Member State of the Community, would constitute an infringement of the Community provisions prohibiting discrimination on grounds of nationality (article 12 EC Treaty)[7].
In short, a provision which provides that notifications are made to the residents at its registered office, while the notifications to non-residents are carried out in each case in Italian territory, and therefore, by definition, in a place other than the registered office, would ultimately lead to a clear discrimination; by requiring the non-resident charges and greater than that imposed on residents with regard to the knowledge of the acts of their tax effect may be notified[8].

The concept of "esterovestizione"
In some of the judgments examined we see an attempt to delineate the figure of the "esterovestizione", in order to verify if in the case to be judged are recognizable the typical features of the phenomenon.
Indeed, having regard to the positive law, the question could arise as a simple verification of the existence of the facts (alternatively, Sede Legale, seat of, main object) needed to integrate the case of fiscal residence in Italy, with all the consequences that flow from them in the event of a positive response.
The attempt of the lower courts, however, is to enucleate, in the application of the law on residence, behavior that it would represent a substantial bypass, consists in making appear as resident for tax purposes outside the boundaries of domestic companies abroad have only formalized (normally, a registered office without any effective).
Basically, the concept of "esterovestizione" would therefore refer to the situation in which the placement abroad of a company appears to be a purely artificial, with the sole purpose of falsely reporting entity foreign activities actually carried out in the territory of the Italian State, with the aim of obtaining a tax advantage[9].
In this context, typical elements of the figure are the existence of a tax advantage (arising from the favorable tax regime, with respect to the inner, applicable in the country chosen); the conduct substantial business in Italy, therefore resulting in no appreciable economic reasons the establishment in another Member State and, finally, the figurative character of the company's presence in the foreign country of incorporation, it is not by conducting any activity and keeping a structure so pure facade.
Now, is certainly commendable that, for the purposes of deciding, we try to understand whether there are circumstances that make it believable and the assumption of a foreign resident for tax purposes only fictitious; However, a strong risk, as can be seen for example by a few steps of the decision of the Provincial Commission of Belluno, in the name of a kind of self-sufficient prevalence of this concept does not take due account of the provisions of the Convention and the relevant Community in respect.
So, eg, say that "the phenomenon dell'esterovestizione can centralize legal entities resident in countries with low taxation or exemption of certain income assets, investments in existing subsidiaries in Italy or abroad, in such a way as to ensure control over the management policies of firms located abroad, without the financial results of this business are reflected directly on the parent "[10], threatens to turn any sub-holding company controlled by Italy in a society esterovestita.
The regulatory framework and case reference is much more detailed and complex, and does not allow statements or definitions so categorical.
Firstly, is essential to have in mind that, as clearly stated by the Court of Justice, the tax advantage resulting from the decision to locate a subsidiary in another Member State is perfectly legal, even if it constitutes the only reason to support said option[11].
As for the typical activities of holding companies, it is true that it does not require of itself considerable administrative and organizational structures: this does not mean, however, that these teams can certainly be regarded as purely artificial, but rather that each case will actually verified whether their typical activity is carried out or not in the context of effective establishment in the host State[12].
Finally, assume that the place at which they assume managerial and operational decisions of firms located abroad is always the place of residence of the shareholder, again means oversimplify, confusing the power of command and coordination of the group by the shareholder with the administration of the individual companies.
Indeed, precisely the diversity of the events object of judgment on the part of each decision suggests the need for careful attention to the context in which you configure the esterovestizione and the evidence relied on to prove it.
Paraphrasing the Court of Justice, the phenomenon should be discerned only when one is dealing with a purely artificial, designed to avoid the tax normally due on the profits generated by activities carried out on national territory. At times, however, there is a feeling that has made premium on the reconstruction of legislative data with the conviction that in front of shell companies[13], that these would remain whatever the exegesis of the standard rules. In this key, you can get to understand, while not approved it, the summary with which some passages of first instance decisions approaching the significance of notions always discussed in the context of international tax law (seat of; place of effective management, nature of the relationship parent-subsidiary). The situation is different, however, radically if the factual (ad is.: sub-holding company operating under a group having localized not only in Italy, but in many other countries) is such as to allow any short simplifications or argumentative shortcuts. Suppose, eg, that in order to decide it is necessary to judge whether a holding company is actually established in the Member State where it was built and if there actually pursues an economic activity; or that it is necessary to discern whether the Italian parent carries with respect to the sub-holding foreign management functions and control, which inevitably reduces the degree of decision-making autonomy, or rather functions of the direct and active: Well , in such situations, the evaluation of the evidence of "esterovestizione" must inevitably be preceded by an exact and scrupulous legal classification of the phenomena in question, in all their manifold facets. If the reconstruction of the legal conditions is lacking or confused, subsequent conclusions will eventually appear categorical and summary, and as such are not likely to form stable and authoritative jurisprudential.

Internal discipline and conventional in terms of residence and the assessment of the evidence likely to prove its existence
Substance, each decision is confronted with the problem of probative value to be attributed to certain clues (papers, correspondence, etc..) from which to infer the tax residence in Italy of companies to which the findings.
Except for the decision of the Regional Tax Commission, the impression one gets from the motivation of other judgments is that of lack of attention to the exegesis of the standard rules, as known arising from sources other than (internal, conventional, Community).
Just having regard to the composite framework relevant, would be simplistic to understand the residence the same way as a mere fact, as such susceptible, the equal of any other simple fact, easy to test on a presumptive. On the contrary, the evidential value of each piece of evidence must be weighed having in mind the case law of tax residence, which contribute to the integration a plurality of positive notions, each carefully to put in focus.
In other words, first it is appropriate to clarify ideas on legislative definitions relevant; then check whether the facts of the case in question complement legislation.
Is then given, firstly, Art. 73, third paragraph, the Consolidated Tax Act, law, which is resident companies and other entities for the majority of the tax period has its registered office or registered office administration or the principal object of the State.
If the foreign company to which the disputed residence (also) Italian is located in a country with which there is a convention against double taxation, then reminded of the provisions laid down in this regard by the Convention applicable. In detail, Art. 4 of the OECD Model[14] states that the residence of a person shall be determined in accordance with the internal rules of each of the two systems. If the application of these provisions leads to the award of a dual resident, come into play the so-called tie-break rules, ie criteria to determine which of the two countries must be a resident of the company concerned. Particular, Former art. 4, comma 3, model "when, in accordance with the provisions of paragraph 1, a person other than an individual is a resident of both States, it is believed that it is resident in the State where it has its place of effective management ".
Finally, it should be noted that Italy, adopting the OECD Model Convention, has entered a reservation to Article. 4, reads as formulated: "Italy does not share the interpretation expressed in paragraph 24 above concerning the person or group of persons exercising the functions of higher rank (limited to a board of directors) as sole criterion for identifying the place of effective management of an entity. His opinion is that in determining the place of effective management is to be considered the place where the main activity is substantial and exercised '.
The same way as those provisions, you can see how complex and the view is to assemble evidence to prove the "prevailing" domestic residence of a company with registered office abroad.
In the first instance, must demonstrate that it has in Italy or the seat of the main object. More precisely, since Article. 73 the T.U.I.R. establishes that these requirements must be met for "most of the tax period", That evidence must be articulated independently - and, then, separately - for each tax period under consideration and taking care to demonstrate that the circumstances relied cover, within each annuality, a period more than half of the period.
Once you reach this evidence, It also requires, like Article. 4, paragraph 3, of the OECD Model Convention, demonstrate that, according to tie break rules, that (Italian tax residence) "Prevail" on the foreign and, therefore, the only relevant under the Convention. In detail, This will have to go through the identification of the most important strategic and commercial decisions approved by the company and proof of their engagement in a location within the State.
Finally, at least according to the interpretation of Article. 4 received from Italy and made explicit in a separate component attached to the commentary, in determining the place of effective management is to be considered the place where the main activity is exercised and substantial.
It, compared with the framework outlined, some steps in the analysis of decisions raise more than a concern.
For example, sometimes explicitly, sometimes implicitly, there is a substantial assimilation of the notion of home and the seat of the conventional place of effective management; and precisely on the basis of this equation, we see the development of some clues as they demonstrated, at the same time, the fact that in Italy and is the seat of the one here, the pari, is located the place of effective management.
Assimilation is not convincing. The seat of the expression (for most of the tax period) must be understood, also in accordance with the literal (headquarters), as the place in which it is ordinarily conduct the company's business and where, therefore, day after day, the same is operated in a continuous manner, and manifest to third parties that the Company will come in contact. In this place, moreover, can also be taken - but not only - the strategic decisions relating to the conduct of the. That this is the meaning to be given to the notion of administrative headquarters is also deduced from the function performed by that connecting element: it is, in fact, and like the head office and main object, to integrate the most intense degree of connection with the sorting, namely the residence.
Well, ostensibilità and stability are prerequisites of the seat of its own so that it can identify, a view which looks at the tax law, a meaningful index of local roots and use, in a broad sense, its infrastructure. Alias: the inauguration of the country must be so intense as to justify the decision to call the company to bear a share of public expenditure is not limited by reference to the abundance of domestic source, but to revenue everywhere (worldwide) produce. If this is the, the place where, episodically and not disclosed to third parties, administrators consult management decisions is not enough, alone, to supplement the seat of, lacking for the fact that liaison permanent and tangible with the sort that only justifies the attribution of residence.
But rather to place of effective management, is fundamental to the notion focalizzarne borne in mind that it is set out in a tie-break rule, ie in the context of a rule nullifying to resolve a situation of "parity" point of tax residence. In other words, it is not a quid such as to determine, alone, implantation of residence, but on the contrary of a quid pluris, designed in order to resolve the dispute when the company is a resident of both Contracting States: typical example, in the international literature, the registered office in a country and the seat of another.
On this point, is appropriate to give a clear indication given in the commentary to Article. 4 of the OECD Model: "The place of effective management will ordinarily be the place where the person or group of persons of higher rank (limited, a board of directors) officially took its decisions, the place where the decisions are taken that should be taken by the body as a whole "; and again, "a company can have more than one place of management, but only one will be the place of effective management ".
The combined effect of internal rules and conventional is therefore important that to resolve disputes in point of residence be followed in a timely and progressive sequence in order to prove the facts; scan which the dialectic of evidence can not and must not shirk.
The judge is in principle free to weigh the value of circumstantial evidence places its attention; must, however, necessarily have in mind the unknown facts that they must support, namely: a) first, a stable location of the seat of administration in Italy (first unknown fact relevant) during the tax period; b) secondly (also essential), determining circumstance that the most important strategic decisions[15] have been taken in the State (second unknown fact relevant).
This sequence logical-legal is clear to Regional Tax Commission in Florence, where it says "continuity is inherent in the very notion of" home ", implies that the stability of the reference and therefore the perceptibility by any third of the collocation indicated as a center for the management and processing of all with regard to the direction of the company and the deployment of its activity ». Accordingly, "The documentary evidence of the existence of the head office in Italy must be such as to deduce the continuity of administration lasted four years".
Much less convincing, instead, pronounces n. 75 of the Tax Court of First Instance of Florence, according to which the fact that much of the evidence collected by the police relates to tax years prior to those covered by the notice of assessment, not assume relevance, since the fact that an order relates previous year or a few years before its value does not interrupt the presumptive. Now, it is questionable whether the known fact of the request for authorization for a measure of day to justify the conclusion that all decisions, and therefore also the strategic, accrued in the same period of the ordinary, have been taken in the same place; However, it is not at all convincing venture that even after many years, ceased the flow of permissions bagatellari, the actuality the fact remains circumstantial known.
A confirmation of the question dell'opinabilità, another judge framed in a completely different way the problem of detailed instructions from Italy and on a number of management measures, noting that "the existence of a pervasive control of a company against another and thus the liability of the subsidiary phenomenon is quite different from the performance of administrative activities of the subsidiary. The two cases may not be added or confusing, otherwise legally relevant situations, each clearly differentiated, effects would be made coincident with aberrant legally ». In essence, you can not "set the location of the head office of a company to another just because between the two companies, there is a close link, which focuses primarily on coordination of their activities and purpose ' (so Comm. trib. reg. Florence, sent. n. 61/25/07 of 18 January 2008).
It is a very central cue and indicated as the object of study for a more correct assessment of the problem.
As for us, we limit ourselves here to two considerations.
The first is that, in hindsight, the so-called "known facts", from which moves the reasoning presumptive, take on a different coloring depending on the legal status conferred on them by: eg, ricollegandoci the different views expressed by the decision under review, permissions can be framed as explanation of the function of guidance and control rather than as symptoms of subjection to eteroamministrazione by the subsidiary. What does not convince, obviously, is the qualification occult, that is made without accounting for the underlying problem.
The second concerns the progress made by the doctrine that, studying the phenomenon of the group[16], investigated the contents of the power management and coordination of the subsidiaries. It has been authoritatively stated in this regard that "through mandatory provisions of Article. 2497-have (of analytical justification of decisions influenced by the management and coordination), has recognized the legitimacy of a single management group, up to the limit that there is no conflict of interest: within the limit, eg, legitimates the powers of the parent company to acquire information, to give instructions and to exercise control in respect of directors of group companies outside of the traditional articulation of the corporate bodies, and that is also outside of the assembly, that would be the only place instead delegated the exercise of membership rights only to the minority shareholders'[17].
Once again, the right, assessment of the facts constituting meters (and in species of their valence circumstantial), asserts its primacy.
See judgment of the Provincial Tax Commission of Florence, sez. I, 24 September 2007, n. 75

See judgment of the Provincial Tax Commission of Florence, sez. XVI, 13 October 2007, n. 108

See judgment of the Provincial Tax Commission of Belluno, sez. I, 14 January 2008, n. 174

See judgment of the Regional Tax Commission of Tuscany, sez. XXV, 18 January 2008, n. 61

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Avoidance of double taxation in cases of VAT esterovestizione


The tools available to taxpayers in order to avoid the double taxation Tax, are completely inadequate and complex as to become capable of compromising the neutrality of VAT and to prevent cross-border trade. With the premise that the study of the authorities in Brussels a new remedy and most effective way to eliminate the double taxation VAT – direct remedy to ensure that the European institutions remain vigilant so that the same taxable transaction is not subject to double taxation caused by differences in technical / regulatory discernible between domestic laws of the Member States – we will try to examine here the current solutions. The instruments now activated by Europeans relate only to cases where origin of the distortion of the principle of neutrality of VAT has been: • a different interpretation between Member States of a provision of the Sixth Directive (now recast in Directive 2006/112/EC); • a different classification of the same facts or different legal classification under which define a similar operation; In the first case, EU actors that you can provide will be: • the VAT Committee: adibile by the Commission or by the Member in order to achieve a common approach that can lead also to a real Council Regulation; • the Board: that, by unanimity, can make their own to take all the necessary measures to correct application of VAT legislation ( arctic 397 Directive 2006/112/EC); • the Court of Justice of the European Communities: institutionally competent to verify the compatibility of national legislation VI to Directive; In the second case, the remedy available to the taxpayer are even more limited. In fact, it is not possible to resolve these disputes through EU instruments, the VAT Committee may be called only for issues arising from a misinterpretation of the VAT legislation, while the Court of Justice does not have the powers necessary to rule on cases of double taxation arising from situations of their legal . There are no bilateral agreements between States for the avoidance of double taxation, the person who has suffered a double taxation that remains is to contact the tax courts in your country, with the specification, however, you must also act to justice the other country.

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