[vc_row][vc_column][vc_column_text]Author: Emiliano Villa
It is the responsibility of the Tax Collection Agent, following an appeal filed by a taxpayer who has been granted the division into instalments of a payment owed, to demonstrate in proceedings the correctness of the calculations used when granting this method of payment, also in relation to the type of amortisation plan adopted (so-called “French” rather than “Italian”).
These are the conclusions reached by the Regional Tax Commission of Lombardy in Milan, division 17, in ruling no. 2218 of 17 May 2018, which completely amended the first-instance ruling, which had gone against the taxpayer, and ordered the Revenue–Collection Agency to reimburse the appellant with €8,400 plus lawyers’ fees.
Nel caso di specie la società ricorrente presentava istanza di rimborso e/o In the case in question, the applicant company presented a request for reimbursement and/or recalculation of instalments agreed with the Collection Agent Equitalia (now ADER), since it disputed the legitimacy of its instalment plan, which was based on the so called “French” amortization method. This method involves the payment of instalments of a constant amount, in which, as the instalments progress, the percentage of principal progressively increases and that of interest progressively decreases. The adoption of this method, however, is not governed by any regulation, and was decided at the discretion of the Collection Agent when it issued the Group Directive DSR/NC/2008/012 of 27 March 2008. This, for the reasons described above, means that the tax payer is obliged to pay a higher amount of interest on the payment divided into instalments than that established by law.
The use of a “French” amortization plan is illegitimate if the frequency of payments is not annual but, as in this case, monthly; by virtue of the fact that instalments are paid in advance with respect to the annual due date, the actual cost of the loan for the applicant does not correspond to the rate established under article 19 of Presidential Decree no. 602/1973, but results in an Effective Annual Rate (that actually paid) higher than the Nominal Annual Rate (that established by law).
Finally, the applicant complained that the instalment plan also displayed other serious elements of illegitimacy, due to the application of compound interest and the lack of even minimal information and transparency during the instalment plan approval process, regarding both the interest rate actually applied and the manner in which the individual instalments were calculated.
In support of his arguments, the applicant submitted a specific expert’s report which demonstrated and quantified the right to reimbursement of approximately €8,400.00 or in any case the need to re-calculate the instalment plan.
The judges at first instance rejected the claim.
The Regional Tax Commission amended the first instance ruling, accepting the taxpayer’s arguments and consequently ordering the Revenue Agency to reimburse the amount requested. It stated that the agency had failed to demonstrate, as it was bound to pursuant to Art. 2697 of the Italian Civil Code, that the payments requested from the taxpayer under the approved division into instalments complied with applicable legislation, with specific regard to the disputed application of interest on penalties, service costs and interest for late registration with the court, and to compliance with provisions regarding the method used to calculate the “French” amortization plan.
The Regional Tax Commission of Lombardy in Milan concluded by ordering the Collection Agent to pay court costs for both instances.
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