prof. dr. pasquale pistone institute for austrian and international tax law damages and liabilities...

Prof. Dr. Pasquale Pistone

Institute for Austrian and International Tax Law

www.wu-wien.ac.at/taxlaw

Damages and liabilities vs.

Italy and the Corte di Cassazione

Prof. Dr. Pasquale Pistone

[email protected]

2Prof. Dr. Pasquale Pistone



Italy: an outstanding candidate for damage liability?

Italy never refers cases, seldom complies with tax decisions involving similar measures of other EU MSs

The Italian Tax Court of Last Instance (i.e. the Tax Chamber of the Corte di Cassazione) seldom applies the acte clair doctrine in the field of direct taxation, whereas it frequently does so in other tax domains

Italian domestic procedural law allows for ex officio application of law => Peterbroeck, 12: should also apply to European law




Is Italy carrying out a sufficiently

serious breach of European law?Yes

It is persistent and…consistent in disregarding the primacy of European law even in presence of settled ECJ case law

Examples: CFC rules, outbound dividends (under infringement procedure), personal deductions for non-residents, contributions to foreign pension funds (despite withdrawal of infringement procedure), etc.

No

There is not (yet) an established body of case law in the field of direct taxes

Thin Cap GLO, 121 and FII, 215: in a field such as direct taxation, the consequences arising from the freedoms of movement…have been only gradually made clear




Examples of sufficiently serious breaches in direct taxation

FII, 215: clarity on most aspects of inbound dividends was not achieved until Verkooijen, Lenz and Manninen achieved

Therefore, as to the Italian examples:

CFC => Cadbury Schweppes

Outbound dividends => Denkavit France

Personal deductions for non-residents => Gerritse

Foreign pension funds => Danner




Manifestly infringing the applicable law and direct taxation Köbler, 53: State liability for an infringement of Community law by

a decision of a national Court of last instance can be incurred only where the Court has manifestly infringed the applicable law

BUT Traghetti del Mediterraneo, 43: Such manifest infringement…is in

any event presumed where the decision involved is made in manifest disregard of the case-law of the Court on the subject

My view: manifest infringement exists in the presence of acte clair

TAX REPERCUSSIONS FOR ITALY: if the Corte di Cassazione does not – even ex officio – disapply the Italian domestic tax provisions in the examples given, Italy should be made liable for damages

prof. dr. pasquale pistone institute for austrian and international tax law damages and liabilities...

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