With the recent ordinance no. 16631/2024the Court of Cassation has returned to rule on the subject of shell company with a scrutiny that, it is believed, goes beyond the original causal foundation thought to justify the special tax regime.
The case concerned a company whose object consists in rconstruction of buildings, which had cited, as justification for the failure to achieve the legally presumed minimum income, the circumstance of failed to obtain administrative authorizationsnecessary to be able to start building activity on a specific piece of land and which, many years after the purchase of the land, had not been granted, so she was only formally considered alive. The existence of the building restrictions was known to the purchasing company from the date of signing of the transfer deed, so the failure to start the building activity had to be considered attributable to a conscious entrepreneurial choice; furthermore, not even during the course of the proceedings had the company demonstrated that the minimum income threshold presumed by the legislator had not been reached depended on objective situations (so verbatim the judge of cassation in the reasons for the decision).
The CTR had rejected the appeal of the Financial Administration, noting that “from the examination of the burdened sentence” it had emerged “undoubtedly” how the “judges of first instance had scrupulously examined and evaluated the substantial documentation exhibited in documents by the appellants, with which, incontrovertibly, it was tried the complex urban planning and administrative process undertaken by the company and the other owners of the land involved in the development plan, as well as the Municipality’s refusal, for objective reasons not attributable to the Taxpayer, to proceed with the implementation of its business program on building land…..In the construction sector, times continue for decades, for reasons attributable to the conciliation of the interests of the private parties interested in the development plan and the slowness of public administrative action, which involves different levels of government (municipal, provincial, regional and national). It is not at all reasonable to think that a company is born to remain immobile and not carry out the economic activity for which it was established and to combine this immobility with an absurd positive economic result, which, in this case, the Office has limited to stating without proving the methods that would have allowed the company to achieve it in 2006 and 2007. The Office claims, erroneously, the existence of a corresponding ability to pay without however indicating and detailing the tax conditions and the constituent elements of the tax obligations attributed to the company and its shareholders”.
The Court of Cassation, on the other hand, considers the appeal by the Treasury to be well-founded since, through the regulation of the so-called shell companies (or companies without business or for mere enjoyment) it is intended discourage the phenomenon of improper use of the corporate instrument as a casing to achieve purposes, including tax savings, different from those provided for by the legislator for this institution (such as, for example, the administration of members’ personal assets). The deterrent mechanism consists in setting a minimum level of revenues and income related to the value of certain assets (so-called “operational test”), failure to achieve which constitutes symptomatic element of the non-operational nature of the companywith consequent presumption of a minimum incomeestablished on the basis of average profitability coefficients of these balance sheet items.
Although with the order in question the Supreme Court judge has referred the dispute to the second instance judge for a verification of the actual bureaucratic delays at the basis of the objective exemption invoked by the taxpayer (which have already been scrupulously verified by the first instance judge), one cannot represent a clear opposition to the allusion made by the Supreme Court to the use of the fiscal discipline of shell companies as a deterrent to the use of the corporate screen.
In this regard, we believe it is necessary to point out that tax regulations (as they bear binding constitutional values) cannot provide instrumental subservience to mere financial policy objectives or to objectives that do not have a direct causal link with actual manifestations of contributory capacity.
The Court of Cassation resumes the Revenue Agency circular no. 5/E/2007where it is represented that the function of discipline is “to discourage the use of the corporate instrument as a screen to hide the actual owner of assets, by making use of the more favorable rules dictated for companies. In essence, the aforementioned discipline intends to penalize those companies which, beyond the declared corporate purpose, were established to manage assets in the interests of the members, rather than to carry out an actual commercial activity”. This specific evaluative angle of the norm lends itself to harsh criticism for the manifest irrationality that he externalizesFirst of all, there is no basis for the assumption that there would be, by virtue of the simple registration of those assets to one trade companythe exploitation of more favorable rules dictated for companies and, therefore, the avoidance of tax obligations otherwise due, since the increasingly stringent conditioning of the right to deduct costs in the corporate regime have led to the belief that tax benefits do not exist deriving from the subjection of the assets to the corporate statute (R. Lupi, “Changes to shell companies: anti-evasion or disguised capital law?”, in Dialoghi dir. tribu., 2006).
The tax obligation can only be reconciled with the constitutional paradigm of the ability to pay which, in turn, depends solely on the effectiveness of the economic fact encapsulated by the law (article 23, Constitution) in a predefined tax basis. With the tax obligation it cannot be discouraged the use of any legal instrument, not even by continuing to hide behind the justification of now completely non-existent favorable tax regimes. L’article 53, Constitution predicts the exclusive reconciliation of the tax obligation with the actual economic strength of the taxpayer and not to direct the use of the legal models provided for by the Regulation.
Fromarticle 53, Constitutionit immediately emerges how its ideal basis is common to that of articles 2, 3 first and second paragraphs, 4, 41 and 42 of the Constitution: the aptitudes, capabilities, initiatives and personal assets (more broadly than any entity that expresses legal subjectivity) I am also at the service of the communitybut at the same time no collective interest can overwhelm the rights of the person; the culture of solidarity must not neglect the primacy that the Constitution gives to the person. It is not the philosophy of individualism, because the person is also the bearer of duties of solidarity, but it is not even the philosophy that in the name of an asserted pre-eminent interest of the community in social transformation (now re-proposed as a fiscal interest), it should be considered permitted reduce the consideration and protection of the individual taxpayer. On the one hand, the State requires “the fulfillment of the mandatory duties of political, economic and social solidarity” (article 2, Constitution), on the other “recognizes and guarantees the inviolable rights of man” (Always Article 2, Constitution) and consider “primary task” to promote “the full development of the human person” (second paragraph ofarticle 3, Constitution). This happy synthesis of solidarity and guarantee of the person is found fully configured in thearticle 53, Constitutionwhich imposes on “everyone” the duty to participate in the public expensesbut only because of theirs actual contributory capacity, taken as a prerequisite, parameter and maximum limit of duty. The tax obligation can never simplistically derive from subjection to the authority of the State, but, precisely because it proceeds from the solidarity collaboration of people, each person must first be respected in its specific reality and, therefore, involved in duty only if and to the extent that this is the case corresponds to your specific ability to pay, understood as a peremptory limit to the discretion of the legislator. It cannot, therefore, fail to appear as evident as with the tax obligation cannot pursue any objective of deterring the use of the corporate screen.
Furthermore, with regard to the use of legal instruments for the protection of property rights (primarily safeguarded by thearticle 42, Constitution) must also be considered as per the ECtHR, ruling of 25 June 2013, Gall v. Hungary, appeal no. 49570/11, the protection of property (also pursued through the corporate screen), is based on Article 1, Prot. 1 of the ECHR which forbids any form of tax disproportionality with the appearance of progressive confiscation of assets.
