CORPORATE CRIME OBSERVATORY

Select Opinions and Arguments
(click on the specific timestamp in the citation for a direct link to the relevant part of the discussion)

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The Italian legal framework in relation to tax crimes is multifaceted. The main types of conduct can be ascribed to two main areas; declaratory offenses which include fraudulent declarations using either invoices for non-existent transactions and/or other tricks, and fictitious or omitted declarations. Then there are the so-called "collateral offenses", which relate to the omitted payment of taxes characterized by certain fraudulence like the omitted payment of certified deductions as well as the omitted payment of VAT or the use of undue tax credits. Finally, there are the fraudulent withholding of taxes and an offense that is in fact forgery for tax suppression, namely the destruction or concealment of accounting records (di Siena, 2021).
Suggested citation: di Siena, Marco (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 08:28. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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[In relation to the relevance of geographic profiling in tax crimes matters] in Northern Italy, especially in the area north of Milan, the proximity to Switzerland allows for the setting up of “hidden permanent (business) establishments” that operate abroad - predominantly in Switzerland but are attracted by the Italian territory for tax purposes (Bolis, 2021).
Suggested citation: Bolis, Samuel (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 11:02. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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From a judicial perspective, there is a discrepancy between the failure-to-pay-taxes offenses, which represent the vast majority of the Supreme Court's workload, and all the other tax-related offenses that, due to the challenges arising from the ascertainment of facts and their prosecution, are rarely covered by the Supreme Court's judicial decisions (Molino, 2021).
Suggested citation: Molino, Pietro (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 12:26. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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As a result of the financial crisis, in recent years we have experienced an increase in the crimes connected to the failure to pay taxes for a tax debt relating to a tax return that has already been filed (Reggiani, 2021).
Suggested citation: Reggiani, Fabrizio (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 13:35. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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Recently we have experienced a progressive increase, also emerging from media reports, in relation to the charges of the setting up of concealed permanent (business) establishments based on global models with charges that hover somehow at the border between the hidden permanent (business) establishment, which is a gray area that was explored some years ago within the Philip Morris ruling, and the transfer pricing cases that entail all the definitory issues that may let them fall outside the area of criminalization (Reggiani, 2021).
Suggested citation: Reggiani, Fabrizio (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 14:20. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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The Italian tax system is particularly complex and unstable in the sense that it is subject to significant and often very proximate changes over a period of time. These factors certainly do not help the average taxpayer to be compliant (di Siena, 2021).
Suggested citation: di Siena, Marco (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 18:50. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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If we examine the evolution over the years, there wasn’t always a clear choice as to whether or not to criminalize the failure to pay taxes. There was a time in which the legislator chose not to criminalize them and then precipitously re-thought such a decision for reasons as simple as the lack of revenue. The sign of this uncertainty also reveals itself in the amendments made to the various thresholds of criminalization that are either increased or decreased according to different
contingencies. This is another element that generates uncertainty in the area of relevant criminal law. (Molino, 2021).

Suggested citation: Molino, Pietro (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 21:39. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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The most recent changes in the field of criminal taxation are not coordinated with the rules on criminal proceedings, which have implications for investigations and for the way in which criminal proceedings are conducted. In particular, this is relevant for carousel frauds, which involve a very high number of perpetrators, including front men and de facto administrators, and which notoriously see a direction, normally hinged on professionals. In the past, the territorial jurisdiction of the investigations was linked to the place the related criminal association operated. More recently, due to the increase of statutory penalties for issuing and using false invoices, there is the risk that the territorial jurisdiction is shifted where, for example, the first issuance of a false invoice can be traced back to a carousel involving the whole Italian territory. Such a place could be different from the location where the organizational center of a criminal association is placed. In practice, this could lead to a fragmentation of allegations of criminal conduct and, as a result, thwart the investigations (Bolis, 2021).
Suggested citation: Bolis, Samuel (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 24:58. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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Paying taxes with goods (datio in solutum) for individual tax obligations isn't allowed in the italian legal system, except for a few marginal cases of direct taxation and donations where the transfer of artwork is allowed (Bolis, 2021).

Suggested citation: Bolis, Samuel (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 38:11. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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Significant risks of corrupt practices are related to the possibility of compensating tariffs and taxation in the construction sector with the execution of urban development projects to obtain tax deductions relating to taxes owed to local authorities. We are talking about extremely large sums of money that are mostly adjudged at the local level in situations that are often characterized by conflicts of interests and that may lead, on the one hand, to corrupt practices (the Italian case-law is full of examples) and, on the other, to a loss of revenue (Bolis, 2021).

Suggested citation: Bolis, Samuel (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 38:29. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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Investigators of the Italian Tax Authority (Agenzia delle Entrate) face structural challenges in investigating potential fraudulent practices in the area of taxation because, differently from the tax police (Guardia di Finanza) they are not recognized as Officials of the Judicial Police and, consequently, they're equipped with a more diminished category of investigative instruments (Bolis, 2021).

Suggested citation: Bolis, Samuel (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 40:19. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy.

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Besides the statutory provisions, on a practical level, criminal sanctions for tax crimes appear to be problematic concerning their effectiveness, preventive effects, punitive effects, and dissuasive effects, and in relation to all other rationales, we would like to assign to criminal sanctions (Molino, 2021).
Suggested citation: Molino, Pietro (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 43:34. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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Social condemnation and moral blame felt in regard to tax frauds or failure to pay direct taxes is much more significant than the one felt in relation to all those behaviors concerning indirect taxes, which somehow seem to entail a lesser social stigma due to the fact that, from the community's overall perspective, not paying tax obligations that are directly connected to your own income is considered in a different way from the behavior of who tries to get off scot-free for failure to pay VAT tax (Molino, 2021).
Suggested citation: Molino, Pietro (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 44:27. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy. 

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In the area of tax recovery, from a comparison between criminal and administrative measures, it emerges that criminal instruments are certainly the most effective because, for example, the instruments provided for in the administrative tax procedure such as precautionary measures to protect the interests of the public treasury and tax authorities not only are not applied to any great extent but also the requirements for their adoption are much more burdensome for the public authorities (Bolis, 2021).

Suggested citation: Bolis, Samuel (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 48:21. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy.

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Italian authorities have traditionally faced challenges in cooperating at the international level. Such difficulties derive from the different types of investigatory approaches, constraints, and institutional placements between the figure of the Italian Prosecutor compared to others who may have investigative powers
in other European countries. For instance, the dependence in some ways on inputs from the executive of investigative authorities is something that
does not happen in the Italian system. We still don’t know if the establishment of the European Public Prosecutor's Office (EPPO) will improve the situation because we still do not know how the coordination and the connection between the investigations of the European Prosecutor, of the single European Prosecutors, will be designed regarding the work that is ordinarily carried out (Molino, 2021).
Suggested citation: Molino, Pietro (2021) VIRTEU National Workshop - Italy, Session 1 [Online]. Video recording at 53:40. Available at: https://www.corporatecrime.co.uk/virteu-national-workshop-italy.