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Institute for Austrian and International Tax Law
Damages and liabilities
vs.
Italy and the Corte di Cassazione
Prof. Dr. Pasquale Pistone
[email protected]
www.wu-wien.ac.at/taxlaw
Prof. Dr. Pasquale Pistone
Institute for Austrian and International Tax Law
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
www.wu-wien.ac.at/taxlaw
Prof. Dr. Pasquale Pistone
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Institute for Austrian and International Tax Law
Is Italy carrying out a sufficiently
serious breach of European law?
Yes
No
It is persistent and…consistent
in disregarding the primacy of
European law even in presence
of settled ECJ case law

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: CFC rules, outbound
dividends (under infringement
procedure), personal deductions
for non-residents, contributions
to foreign pension funds (despite
withdrawal of infringement
procedure), etc.
www.wu-wien.ac.at/taxlaw
Prof. Dr. Pasquale Pistone
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Institute for Austrian and International Tax Law
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
www.wu-wien.ac.at/taxlaw
Prof. Dr. Pasquale Pistone
4
Institute for Austrian and International Tax Law
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
www.wu-wien.ac.at/taxlaw
Prof. Dr. Pasquale Pistone
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