Michaela Merz

How to decline cost of bank guarantee in Italy – “Statuto dei diritti dei contribuenti” – Law no. 212/2000

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In some cases such as claims for VAT refund, tax payers have to provide a bank guarantee to the Italian Tax Authority. This is not always easy from an administrative point of view (as it has to be bank in Italy) and never really cheap. “Statuto dei diritti dei contribuenti” – Law no. 212/2000 protects tax payers’ right in relation to the incurred bank guarantee cost. A specific decree, implementing the operating rules for the refund/repayment should have been issued a long time. But it is still not published and there is little hope that it will be issued in the foreseeable future.

According to the Law no. 212/2000 the Italian tax authorities have to repay the costs at issue to the tax payers after any possibility for a tax assessment/audit is finally closed. For example, in case of VAT refund, a bank guarantee has to be provided for a period of maximum three years commencing with the repayment of the VAT credit. Therefore in principle the bank guarantee costs should be recoverable after this period.

However, practical guidance on how to recover the cost is missing. In various Italian tax court decisions, it has been clarified that the refund of bank guarantee costs is already effective independent from the missing decree (tax payers’ right cannot be denied in such specific case). Considering also the discussions on the Italian VAT refund legislation and particularly regarding the bank guarantee, the pre-emptive claims for the bank guarantee costs should be considered. In case of denial from the Italian tax authorities and this cannot be excluded, tax payers should appeal against this position in front of the competent Italian tax courts.

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