New Tax Self-Protection: Guidelines from the Italian Revenue Agency

​​​​​​​​published on 12 December 2024 | reading time approx. 4 minutes​​

Legislative Decree No. 219/2023 introduces Articles 10-quater and 10-quinquies into the Taxpayer’s Statute, bringing significant changes to tax self-protection. This procedure allows the tax authority to annul, in whole or in part, tax assessments affected by errors in legality or merit.

The Italian Revenue Agency's Circular No. 21/E of November 7, 2024, marks a pivotal step in regulating this tool by clarifying procedures, responsibilities, and application methods for managing tax disputes effectively.

Mandatory self-protection

One key innovation is the distinction between mandatory and optional self-protection, precisely defining when the tax authority is required to act ex officio and when action remains discretionary.

Mandatory self-protection, governed by Article 10-quater, obliges tax offices to annul tax assessments with evident and undeniable errors. This aims to reduce tax litigation by ensuring faster and fairer dispute resolution.

Specific cases of mandatory self-protection include:

• Errors in identifying the taxpayer: when the act is addressed to the wrong person;
• Calculation errors: simple arithmetic mistakes;
• Incorrect application of the tax: e.g., a tax applied without the necessary conditions;
• Unacknowledged payments: failure to recognize duly executed payments;
• Material errors by the taxpayer: obvious inaccuracies correctable by the tax authority;
• Subsequently supplemented documentation: omissions rectified within the prescribed deadlines.

This list, as emphasized by the circular, is exhaustive and must be interpreted strictly. It limits the tax authority’s intervention to explicitly defined cases, ensuring regulatory clarity while narrowing its scope. Mandatory self-protection may be exercised even during ongoing litigation, provided no final ruling in favor of the tax authority has been issued. Additionally, it can be activated within one year after the assessment becomes definitive, offering greater temporal flexibility.

Optional self-protection

Optional self-protection, outlined in Article 10-quinquies, is one of the most notable innovations. This discretionary power allows the tax authority to annul assessments even in cases without clear and manifest errors, and it can be exercised without a taxpayer's request.

The circular explains its application in:

• Non-evident illegitimacy: when the error exists but is not immediately apparent;
• Administrative expediency: when intervention is deemed beneficial to reduce disputes and ensure sound administration.

This power can be exercised beyond the one-year limit, provided no ruling in favor of the tax authority has been issued and the assessment has not been subject to facilitated settlement. This innovation enhances the authority’s ability to address complex situations, fostering transparency and efficiency.

The circular also elaborates on new procedural innovations to simplify and digitize the process, including:

• Submission methods: ​

1. Use of the Revenue Agency’s online services;
2. Certified e-mail (PEC);
3. Manual submission at the relevant office.
   

1. Identification of the taxpayer and the tax assessment;
2. Detailed description of identified errors and applicable laws;
3. Supporting documents.

1. The tax authority must respond within 90 days of receiving the request;
2. A lack of response does not imply acceptance, but the taxpayer may request a formal decision.