Overview

A recent Supreme Court ruling has clarified that the initiation of a tax audit does not obstruct the submission of a late tax declaration, provided it is filed within 90 days of the original deadline. Historically, such audits prevented taxpayers from benefiting from reduced penalties through self-correction, but they do not invalidate the late declaration itself.

Case Background

The case originated from a tax audit that revealed a taxpayer's failure to submit their income tax declaration by the legal deadline. Consequently, the tax office issued a presumptive assessment notice, reconstructing the taxpayer's income entirely on assumptions. However, the taxpayer submitted the late declaration within the 90-day grace period following the audit's commencement, challenging the basis for the presumptive assessment.

Legal Arguments

The tax office argued that since the audit had already identified the omission, the taxpayer could not regularize the situation. Contrarily, both lower courts and the Supreme Court noted that, according to Article 2, paragraph 7 of Presidential Decree 322/1998, only declarations submitted beyond 90 days are deemed omitted. The Court emphasized that while audits previously barred the possibility of reduced penalties, they did not affect the validity of a late declaration.

Current Legal Context

Under current regulations, self-correction is only impeded by the receipt of a tax assessment notice, not by the initiation of audit activities. A late declaration incurs a penalty of 250 euros, excluding any penalties for unpaid taxes. The Court's decision reaffirms that a late declaration has the same legal effects as one submitted on time.

Further Insights

• The ruling underscores the importance of understanding the distinction between audit initiation and the receipt of a tax assessment notice.

  Potential Opportunities

• Taxpayers can still submit late declarations within 90 days without invalidating their legal standing.

• Legal professionals can advise clients on the nuances of late declarations and potential penalties.

  Critical Aspects and Potential Issues

• Misunderstanding the difference between audit initiation and assessment notice receipt could lead to incorrect assumptions about penalty eligibility.

  Common Pitfalls and Errors

• Failing to submit a late declaration within the 90-day window.

• Assuming that audit initiation automatically invalidates the possibility of a late declaration.

  Suggestions and Useful Tips

• Ensure timely submission of declarations to avoid complications.

• Consult legal experts to navigate the complexities of tax audits and declarations.