Without a shadow of a doubt, Law No. 130 of 2022 constitutes a reform of historical importance, after more than a century of substantial regulatory immobilism (the last provisions on tax justice and the tax process dated back to 1864). A true Copernican revolution therefore – aimed at improving the quality of tax rulings and reducing litigation in the Court of Cassation – which finally sees the birth of the Fifth Magistracy and many other important innovations both in terms of the recruitment of tax judges (who become full-time professional judges with remuneration commensurate with their assigned duties), and in terms of the procedural process. Alessandra Calabrò, a Court of Cassation lawyer at the Rome Bar specialising in tax law, with extensive experience also in the field of bankruptcy law and credit recovery and restructuring, spoke on the subject.
by Roberta Imbimbo
Avv. Calabrò, what are the main innovations contained in the reform of justice and the tax process?
Law No. 130 of 2022 pursues the ambitious goal of rationalising the tax justice system through the professionalisation of the judge of merit, the provision of the figure of the professional tax magistrate, the creation of the Courts of Tax Justice of first and second instance to replace the provincial and regional Tax Commissions, and therefore, more generally, the establishment of a specialised Fifth Magistracy. The tax jurisdiction will thus be divided between togatized tax judges, appointed at the Tax Courts, present in the single national role as of 1 January 2022, and newly appointed tax magistrates who have passed a public competition on the basis of qualifications and examinations (for a total staff of 576 units, 448 at first instance and 128 at second instance). This is a very important novelty considering that, previously, the tax justice system was made up of part-time judges and this – clearly – did not safeguard their professionalism given the very technical nature of the issues to be dealt with. A further very important innovation introduced by the reform law in question is to be found in the establishment of an ad hoc section at the Court of Cassation exclusively in charge of dealing with tax disputes. Moreover, as from 16 September 2022, in order to reduce litigation, tax disputes pending before the Court of Cassation may be subject to facilitated settlement.
Law No. 130/2022 also introduced important innovations in the area of witness evidence. Can you tell us about it?
Another focal point. The law strengthens the powers of the defence, re-admitting also in tax trials the written testimonial evidence with the forms set out in Article 257-bis of the Code of Civil Procedure. This novelty represents an important milestone to guarantee the fairness of the tax trial, given that the previous prohibition represented a breach of the principle of full and effective judicial protection, incompatible with the principle of due process, as recalled by the European Court of Human Rights, according to which the admission of testimonial evidence in tax trials is to be considered mandatory when it is indispensable for the proper exercise of the taxpayer’s right of defence. Important news also on the burden of proof: in fact, the law establishes that the Tax Administration must ‘prove in court the grounds of its tax acts’. The judge, who must base his decision on the evidence that emerges in the case, will therefore proceed to annul the taxable act if the proof of its grounds is lacking or if the proof of its grounds is contradictory or in any case insufficient to demonstrate, in a circumstantiated and punctual manner, the objective reasons on which the tax claim and the imposition of penalties are based.
What about the institution of judicial conciliation?
Judicial conciliation was previously subject only to the will of the parties and the judge performed a merely notarial function. Today, on the other hand, the judge exercises a propulsive function, in that he may formulate a conciliatory proposal to the parties if the subject of the dispute is one that can be easily and promptly resolved. The party that refuses such a proposal may be called upon to pay court costs with a 50% surcharge. The law also introduces a precise administrative liability of the official who unreasonably rejects the conciliation proposal and the figure of the monocratic judge for cases up to €3,000. The aim is obviously to lighten the burden of tax litigation and speed up judicial action.
How do you rate this reform?
It is certainly a valid and long-awaited reform, aimed precisely at speeding up, simplifying and making the tax justice system more efficient. Obviously, some aspects of application will have to be carefully monitored over time and therefore only experience will teach us what the strengths and weaknesses of these revolutionary regulatory provisions will be and above all what the real impact of the reform will be on the relationship between taxpayers and the tax authorities.
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