Services · Ferrara and Codigoro
We handle the tax affairs of sole traders, partnerships, limited companies and groups: determination of taxable income, direct taxes and VAT, tax returns, extraordinary transactions, management of tax controls. It is continuous work, not seasonal: the taxes of a financial year are decided throughout the year, and the tax return is its final account.
Those seeking assistance with business taxation usually have two questions beneath the question: how much will I pay, and how solid is what I am doing if one day it is looked at closely. The two questions are linked. A saving that does not stand up to an audit is not a saving — it is a deferred cost with interest; conversely, paying more than is due because an option provided by law was never considered is a loss that no one will ever detect on the entrepreneur’s behalf.
Our method is to state from the outset where the line runs between what is settled, what is sustainable with serious arguments and what is contested, and to leave the decision to the informed entrepreneur. However, this requires being involved before the transaction: on most tax choices, once the deed is done the room for intervention shrinks to managing the consequences.
Choosing between two alternative courses of conduct, both provided for by the legal system, is not avoidance. The law expressly recognises that the taxpayer may choose between different optional regimes or between transactions carrying a different tax burden: the limit is abuso del diritto (abuse of law), that is, a transaction devoid of economic substance which, while formally complying with the rules, essentially achieves undue tax advantages. The distinction between legitimate saving and abuse is not a nuance: it is the perimeter within which we work.
In practice, a business’s ordinary planning concerns predictable matters: the choice of legal form and its possible change, the remuneration policy for shareholders and directors, the management of depreciation and of capitalisation choices, the use of tax losses, the spreading of capital gains over instalments where the conditions are met, recourse to optional regimes, access to relief measures and the related supporting documentation.
On each of these choices we produce, when the amount at stake justifies it, a written note setting out the economic rationale of the transaction, the rule applied and the degree to which administrative practice and case law have consolidated. However, it must be said that no note makes a transaction devoid of economic substance safe: documentation serves to demonstrate a rationale that exists, not to construct one that is missing.
Legal references: art. 10-bis L. 212/2000 (Statuto dei diritti del contribuente)
companies and SRLs · flat-rate scheme
Business income is determined by applying to the profit-and-loss result the upward and downward adjustments provided for by the Testo unico delle imposte sui redditi (Italian Consolidated Income Tax Act). The technical work almost always concentrates on two principles, which are also the two most frequent challenges raised in audits: competenza (accrual) and inerenza (inherence to the business).
Accrual establishes in which financial year a positive or negative item contributes to income, according to criteria that the Consolidated Act differentiates by type of transaction and that require, for costs, certainty of existence and objective determinability of the amount. Inherence links the cost to the business activity: the case law of the Italian Supreme Court has progressively clarified its qualitative nature, ruling out that the inherence test can be reduced to an assessment of proportionality or economic usefulness, though manifestly uneconomic conduct remains a clue the tax administration may rely on. It is a matter in motion, and we flag this when the amount at stake requires it.
Around these two principles revolve the usual areas: depreciation and assets with limited deductibility, entertainment and promotional expenses, motor vehicles, travel, directors’ remuneration, bad-debt losses, provisions, capital gains and losses, loss carry-forward. For each of them, the effective defence is documentary and must be built when the cost is incurred: contract, evidence of performance, traceability of payment, consistency with the activity carried on. However, a cost documented impeccably but not inherent remains non-deductible: documentation proves the fact; it does not change its qualification.
Legal references: d.P.R. 917/1986, artt. 83, 109 e disposizioni sul reddito d’impresa; d.lgs. 446/1997 per l’IRAP
cars, travel and expenses · the cost of labour
VAT is the tax that produces the largest number of material errors, because it accompanies every transaction and because its application depends on qualifications the business makes daily: the nature of the transaction, the moment it is deemed to take place, the place where it is territorially relevant, the status of the customer, the existence of a special regime or of a reverse-charge mechanism.
The areas where we intervene most often are the territoriality of services and the correct qualification of transactions with foreign parties, within and outside the EU; the reverse charge in the sectors where it applies, where an error of application produces both formal and substantive consequences; the right of deduction, its objective and subjective limits and the pro-rata for those who also carry out exempt transactions; the management of the plafond for habitual exporters; and the return and reporting obligations linked to electronic invoicing.
On these matters the practice of the Agenzia delle Entrate (Italian Revenue Agency) and the case law of the Court of Justice of the European Union count as much as the domestic legislative text, because VAT is a harmonised tax and must be interpreted in conformity with the common directive. However, EU conformity does not cure every domestic formal defect: the case law protects the substantive right of deduction, but wide room remains for penalties for formal breaches, and on some situations the position of the administration and that of the courts do not coincide.
Legal references: d.P.R. 633/1972; direttiva 2006/112/CE; prassi dell’Agenzia delle Entrate
VAT in practice · electronic invoicing
Contributions of assets, mergers, demergers, transformations, transfers and leases of businesses, disposals of shareholdings: these are transactions a business carries out a few times in its life and which change its tax position in a lasting way. Each has its own regime, and the difference between the neutrality regime and the realisation regime determines whether the transaction generates immediately taxable matter or defers it.
The preliminary work is always the same: identify the real economic objective — separating assets from business risk, bringing a shareholder in or letting one out, preparing a generational handover, reorganising a group, selling — and establish which instrument achieves it at the lowest overall cost, tax and non-tax. We consider together direct taxes, indirect taxes, effects on prior-year losses and on reserves, social-security implications, and the transferee’s liability for the tax debts of the business transferred, which is managed with the certificate of pending tax charges and with contractual clauses.
On the most significant transactions we assess the appropriateness of a prior interpello (advance tax ruling), which makes it possible to know the administration’s position before proceeding. However, a ruling has its own timescale and must be framed with precision: a badly formulated question obtains an answer that does not protect, and in some cases a negative answer crystallises a position it would have been preferable to discuss elsewhere.
Legal references: d.P.R. 917/1986, titolo III, capo III, sulle operazioni straordinarie; art. 14 d.lgs. 472/1997 sulla responsabilità del cessionario d’azienda
companies and SRLs · business crisis
The relationship with the tax administration does not begin with an assessment. It begins with notices of irregularity from the automated and formal checks of tax returns, with compliance letters flagging anomalies, with requests for documents. Handled in time and with the right documentation, these steps close without litigation; ignored, they become payment demands.
When the control takes the form of a tax audit, we assist the taxpayer during the inspection, prepare the observations on the processo verbale di constatazione (audit closing report) and assess the subsequent strategy: settlement by agreement, reduced-penalty definition of the sanctions, a request for self-correction by the administration, or an appeal. The choice is not ideological but arithmetical and probabilistic: you compare the amount in dispute, the strength of the respective positions, the cost and duration of proceedings, and the penalty reduction each instrument offers. In litigation before the Corti di giustizia tributaria (Italian tax courts) we work in coordination with the appointed defence counsel where the matter requires it.
It should be borne in mind that the framework of the preliminary phase has changed: prior adversarial dialogue has been generalised, and the allocation of the burden of proof in tax proceedings has been redefined in the taxpayer’s favour in terms the case law is still clarifying. However, it would be imprudent to read these changes as a guarantee of outcome: they affect the method and the distribution of burdens; they do not replace proof of the facts, which remains the heart of every defence.
Legal references: d.P.R. 600/1973 e d.P.R. 633/1972 in materia di accertamento; L. 212/2000; d.lgs. 546/1992; d.lgs. 218/1997 sull’accertamento con adesione
tax audits and litigation · tax dispute settlement tools
Taxes are a variable in a business decision, not its criterion. An investment that makes sense only for the relief that accompanies it remains a questionable investment; a corporate structure built exclusively for the tax advantage is at once fragile on the tax side and awkward on the management side.
The contribution we consider useful is anticipation: quantifying the tax effect of a choice before it is made, indicating its alternatives, and estimating the cash requirement that taxes will generate in the following months. The tax surprise is almost always a cash problem before it is a tax problem, and it is prevented by projection, not by late optimisation.
For this reason the tax service rests on the accounts and on management reporting: without up-to-date data, projection is an exercise in imagination. However, no projection removes regulatory uncertainty: the rules change, sometimes mid-year and with retroactive effects, and prudent planning leaves a margin for the unforeseen rather than consuming it in advance.
accounting and financial statements · the Firm’s tools
Lawful saving consists in choosing, among alternative courses of conduct provided for by the legal system, the least tax-onerous one: it is a faculty recognised to the taxpayer. Abuse of law occurs instead when the transaction is devoid of economic substance and, while formally complying with the rules, essentially achieves undue tax advantages. The dividing line is the existence of non-marginal, non-tax reasons, which must be documented at the time of the transaction.
Three joint conditions are required: inherence to the activity carried on, allocation to the correct accrual year and adequate documentation. Some costs are also subject to specific deductibility limits provided by the Consolidated Act, as a percentage or on a flat-rate basis. Deductibility does not depend on the economic advisability of the cost, but manifestly uneconomic conduct can be relied on by the administration as a clue during an audit.
It is a mechanism of accounting inversion in which the tax is paid by the purchaser or customer instead of the supplier, who issues an invoice without charging VAT. It applies in the cases exhaustively provided by law, including many transactions with foreign parties and certain domestic sectors identified by the legislature. Applying it to transactions for which it is not provided, or omitting it, carries separate penalties.
The notice resulting from the automated or formal check of a tax return is not an assessment and is not to be appealed: it opens a phase in which the taxpayer can provide clarifications and documents, or settle the amount due with a reduction of the penalties within the stated deadline. If there is neither a reply nor a payment, the amount is entered on the collection roll and served with a payment demand.
It depends on the ratio between the strength of one’s position and the benefit the settlement offers. Accertamento con adesione (settlement by agreement) makes it possible to discuss the findings in adversarial dialogue and to obtain a reduction of the penalties with immediate closure; an appeal preserves the possibility of having the claim annulled in full but entails time, costs and the risk of losing. The assessment must be made finding by finding, not on the deed as a whole.
Significantly every year, with the budget law, and with frequent mid-year interventions on individual institutions. What changes most are relief measures, thresholds and compliance obligations; the structural principles of business income and VAT are more stable. For this reason our service pages set out the criteria and not the amounts, while the Firm’s guides carry the updated figures with an indication of the tax period they refer to.
If you would like to review your business’s tax position with us, or to discuss a transaction before carrying it out, write to us from the contact page: tell us the sector, the legal form and the question, and we will tell you whether and how we can help. In the tools section you will find the Firm’s calculators, the deadline calendar and the online quote; in the articles and guides we cover the individual subjects with updated legal references.
See also: Guide: tax audits
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