Supreme Court: abuse of rights also in tax matters.

[:it]For the Court of Cassation, abuse of rights is also possible in tax matters.

The recent judgments 3242/2013 and 4901/2013 reconfirmed that theinstitution of abuse of rights is also applicable in tax matters.

In order to fully understand the dictate, it is first necessary to understand the concept of abuse of rights, being careful to apply a clear distinction between tax evasion and abuse and avoidance.

Unlike other European countries, such as, for example, Germany, Greece, Switzerland and Portugal, Italy has not transposed the principle of abuse of rights as a rule of law. However, at civil law level, doctrine and jurisprudence have developed this widely. An excellent definition was given by the Supreme Court, which provided that "abuse of rights occurs when the holder of a subjective right, even in the absence of formal prohibitions, exercises it in a manner that is unnecessary and disrespectful of the duty of fairness and good faith, causing a disproportionate and unjustified sacrifice of the other contracting party, and in order to achieve results that are different and additional to those for which those powers or faculties were granted"(Cass. Civ. 2009/20106).

In the tax field, the figure of abuse was introduced, Indeed, in its judgment No. 10981 of 13 May 2009, the Court of Cassation, Civil Tax Section, stated that "the prohibition of abuse of rights translates into a general anti-avoidance principle, which precludes the taxpayer from obtaining tax advantages obtained through the distorted use, even if not in conflict with any specific provision, of legal instruments capable of obtaining a tax benefit or saving, in the absence of economically appreciable reasons justifying the transaction, other than the mere expectation of those benefits."

In essence, the concept of abuse of tax law has been a de facto broadening of the concept of avoidance,limited (erroneously) to case studies (Article 37-bis of Presidential Decree 600/1973).

The recent judgments under review, have reaffirmed the applicability of the institution of abuse also in the tax field. Specifically, they ruled that when a taxpayer, exercising a right expressly recognised to him, does not in reality pursue an end worthy of protection by the system, but, on the contrary, achieves an objective that is contrary to it, no judicial protection can be granted to him. In fact, the person abuses the freedom to adopt a certain treatment for his own benefit by exploiting the variety of legal forms that the legal system makes available to him.

Therefore, as opposed to evasion, which occurs when there is a concealment of taxable wealth i.e. the alteration of an economic fact (such as simulation, fictitious interposition), abuse and avoidance, on the contrary, occur when the taxpayer's tax advantage is undue, since it is obtained by exceeding (or abusing) the advantage expressly recognised by a rule, by pursuing an advantage disapproved by the system.

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Fantozzi contro tutti

Late Disciplinary Notice? Reintegration of the worker.

[:en]The Court of Cassation, with the recent Judgment No. 1693 of 24.1.2013 affirmed a rather relevant principle of law in the field of labour law. Specifically, it stated that in the case of disciplinary dismissal for just causeinfringements must be contested by the employer in the immediacyof their commission.

The present case involved an employee who was late to work for more than two months, believing he had been demoted. The Court of Romein the first instance, awarded damages to the latter, but only paid an amount of one euro. compensation. Indeed, the Court of Appeal also ordered the reintegration.
Lastly came the Civil Cassation stating, in judgment 1693/2013, that "the time elapsing between the notice of disciplinary dismissal and the ascertainment of the fact contested against the employee may indicate the absence of a requirement of the case provided for by Article 2119 of the Civil Code (incompatibility of the fact contested with the continuation of the employment relationship). (incompatibility of the contested fact with the continuation of the employment relationship), since the delay in contestation may indicate the lack of interest in the exercise of the potential right to dismiss; under a second profile, the timeliness of the contestation allows the worker a more precise recollection of the facts and enables him to prepare a more effective defence in relation to the contested charges: with the consequence that the lack of a timely contestation may result in a breach of the procedural guarantees established by Law No. 300 of 1970, Article 7".

La failure to contest was, therefore, considered by the Supreme Court as a "tolerated behaviour'. Indeed, the aforementioned Article 7 of the Workers' Statute explicitly states that: "the employer may not take any disciplinary measure against the employee without having first notified him of the charge and without having heard his defence".

 

 

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