The "sickness of VAT" is a theme that is the origin of a heated debate on the management of the crisis of the enterprise, in particular in the context of the tax transaction provided for by the Code of the crisis of enterprise and insolvency. It is in fact the possibility to reduce or, indeed, to sick VAT debt in a context in which there is an agreement with the "executory" for the recovery of a company in difficulty. VAT debt is generally of privileged type, so favoured compared to others and therefore difficult to sick. VAT being a harmonised tax at Community level (ex art. 4 Directive 2006/112/EC, which provides for the principle of the "full payment of the tax to the "executive") makes it tendingly impossible to sick, however, there is a possibility: in fact art. 182-ter CCII allows in some cases the reduction of privileged debts, provided that the remaining credit is still satisfied to a degree not lower than that obtainable in the case of judicial liquidation. (1) In other words, if it can be demonstrated that the state guarantee would recover a lower sum from the liquidation than that proposed in the plan, the sickle can be admitted.
Recent Laws on the Institute of VAT Falcidability
In the matter of the falsification of VAT credit, the contribution of the debate between Udine court and the Constitutional Court is valuable: The Udine court contributed to this matter by a judgment of 14 May 2018, which directly addressed the issue of the falsification of privileged claims in the context of a procedure for the settlement of the crisis from overindebtedness. The applicant complained of the emerging inconsistency between the plan that provides for the partial satisfaction of the treasury and Article 7 (1) third period L. 3/2012, which states that the plan can only provide for the delay of payment with regard to VAT (2). In the process the applicant asks for the non-application of this rule as in clear contrast to Community legislation and subsequently contests the inconstitutionality of the same as it considers it contrary to Article 7 (1) of the EC Treaty. The Court held that the dispute concerning possible conflict with European law was unfounded and finally the Udine Court held that the exception of relevant constitutional illegitimacy was not manifestly unfounded for the purposes of the proceedings.2
The excursus on the subject of the severability of the VAT credit was made in reference to the agreed estimate, to the debt restructuring agreement and subsequently with regard to the procedures for the settlement of the crisis from overindebtedness: In the past in both procedures , it was generally allowed to propose a partial payment of the privileged credits, provided that within the limits of the capacity of the goods burdened (s.a. , ,falcidia , ,); but the privileged credit for VAT (together with some others, here irrelevant) was exception and had to be always paid in full. (2) On the contrary, Article 7 (1), third sentence, L. 3/2012 has remained unchanged and, therefore, \ continue to require, at the penalty of inadmissibility, that in the procedure of agreement on the restructuring of debts (but also in the plan proposed by the consumer) the credit for VAT is always paid in full, unlike what is possible for other privileged claims, which can be sifted within the same plan within the limit of the capacity of the goods weighed. (2) And finally, in the light of this excursus the Court concludes by asserting that \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ By removing this rule from the system, the general and rational principle for each of the existing rules could be re-expanded in all the negotiated competitive procedure hypotheses, so that VAT credit, like all preferential claims, can be partially met, provided that the value of the goods charged is limited. (2)
In the light of the conclusions reached by the Udine Court, the Constitutional Court then ruled as follows: it declares the constitutional illegitimacy of art. 7, paragraph 1, third period, of the law of 27 January 2012, n. 3 (Provisions in the matter of usury and extortion, as well as the composition of the crises from overindebtedness), limited to the words: In other words, the scythe of the governoage in the context of the procedures for settling the over-indebtedness crisis is compatible with the Community rules and, by virtue of the Court's judgment, any contrary provision is constitutionally unlawful as it creates an unjustified and unreasonable difference of treatment between the debtor who is insolvent and not bankrupt, constituting a violation of Article 3 of the Constitution. (5)
Notes on the Institute of the Preventive Concordat
In order to analyse the falsifiability of VAT in relation to the agreed estimate, it is appropriate to recall how the institute of the preventive agreement is structured: it is a judicial instrument for resolving the crisis of an undertaking, it is foreseen by finalizing agreements with creditors intended to be perfected before a court. In order to be able to access this institution the entrepreneur must be insolvent. This is possible, for creditors assisted by pre-emption, to be guaranteed full satisfaction. While the chirografary creditors are entitled to payment of a mere percentage of at least 40%. In this context, which characterized the institution until the reform of 2005, it was irrelevant to achieve or not to recover the undertaking, moreover the interest of creditors was only marginally protected. The autonomy of the concordat agreements was limited by the existence of respect for the par-dicio creditorum, with the result that the role of the judge was particularly predominant, having to superimpose his own assessments of merit to those of the creditors.
The 2005 reform introduced a new concept in relation to the institute of the agreed estimate: it is in fact today understood as a necessary process, beyond deservingness, to satisfy the interest of creditors and, as closely related, to maintain the productive complexes. In this perspective the autonomy of the concordatious agreements is valued as a means of resolving the corporate crisis. The crisis is in fact no longer recognizable in a real insolvency, in conjunction with this also the role of the judge has been reduced: he is no longer able to put his own assessments of merit. In this new conception the judge is exclusively a controller of legality. It is also accentuated the concept of business continuity that led to the d.l. 83/2012, the so-called development decree, converted then with the l. 134/2012 which led to the introduction of the concept of agreed with continuity of business, always inspired by the best satisfaction of creditors. On the one hand, this new orientation favours the success of well-founded proposals, assigning the deductibility to financing functional to business continuity (7), and a special discipline of the contracts under execution (7). While from another perspective it constitutes the limit to the submission of proposals that do not see a close correlation between the continuity of the company and the emergence of an added value that can justify it.
The last legislative intervention in the matter of prior agreement concerns the satisfaction of 20% of the chirografari creditors, and was introduced with a reform of 2015. With l. 132/2015, which converted the d.l. 83/2015 into law, a significant novelty was introduced: a minimum threshold of 20% of satisfaction of the chirografari creditors is introduced. The choice was probably dictated by the considerations of the legislator: in fact he found a lack of convenience in many proposals to agree with these last ones that often resolved in a liquidation of the activity not different from the bankruptcy procedure (7).
Today the arrangement is preferred in the form that provides for the continuation of the business activity, provided that it determines in favor of the creditors a surplus value that is such that it is considered to be convenient compared to the bankruptcy. Moreover, the agreement purely liquidation is therefore understood as a marginal proposal, justified only in the presence of prospects of realization of the activities that are solidly founded and that are such as to assure the chirografari creditors a satisfaction that is appreciated by them in certain times and does not disperse over time.
Legal evolutions of the Falcidiability of VAT in the Subject of Preventive Concordat
The problem of the falsifiability of VAT in the matter of prior arrangement arises first of all from the privileged nature of the value added tax credit, which, pursuant to art. 2752 of the Italian Civil Code, is the exclusive competence of the European Union. Moreover, Article 182-terz L.F. paragraph 1 provides that with regard to value added tax and to the withholding taxes and non-payment, the proposal may provide exclusively for the delay of payment of VAT (6), the principle of non-falsifiability of VAT, operating within the tax transaction, must be compared with the principle set out in art. 160 of the Italian Law. paragraph II, which deals more specifically with the decline in the falsification of value added tax as regards the agreed advance, stating that the proposal for an agreement may provide that creditors with legitimate preemption cause are not fully satisfied, provided that the plan provides for satisfaction in a not lower than that achievable (6). However, the court of Cassation has subsequently expressed itself not admitting in any case the falsification of VAT: In the matter of prior agreement, article 182b, first paragraph, fall law (as amended by art. 32 of Italian Legislative Decree no. 185 of 29 November 2008, converted by law no. 2) which excludes the concordat falcidia on the capital of VAT, thus Sancing the incalibility of its debt, has a substantial and exceptional nature, granting the corresponding credit a peculiar and unavoidable treatment, so that the same applies to any form of agreement, even if proposed without recourse to the institution of the tax transaction, adhering to the concorrosual statute of the VAT credit The agreement does not include among the conditions of eligibility of the agreed also that of the full payment of the Iva credit (Trib. Perugia 16/07/2012 and in the sense of compliance App. Venezia 23/12/2013, Trib. Benevento 24/09/2014 and Trib. Como 29/01/2013, in the opposite direction Trib. Padua 30/05/2013). (6) For the judges of legitimacy, art. 183-ter L.F. is the image of a principle of international economic public order, while the jurisprudence of merit considers the principle of faldiability of any preferential credit prevailing on art. 182-ter L.F., since the latter is excluded from the possibility of extension by analogy because of its exceptional character. The company in agreement can therefore sever the tax on the added value under the following conditions: the tax transaction ex art. 182-ter L.F., whether incapitulous, the concordatary proposal appears more convenient for creditors than for bankruptcy and, last but not least, that class division does not entail the reversal of the order of privileges pursuant to art. 2777 and ss. c.c. (6).
Final considerations
The institution of the falsification of value added tax is still the subject of various problems as a very sensitive subject. Its complete integration would involve a variation in the discpline that would affect several institutions in a non-different way. Especially in the matter of bankruptcy law, the complete integration and permission of the institution would have consequences that would concern in particular the agreed estimate that being a mode directly connected to the procedure of satisfaction of creditors involves not a few problems as it would be in part undermined the possibility for the executory to be paid its own payment. However, jurisprudence is divided and oriented in different directions, contributing significantly to the confusion that revolves around the procedures for the approval of the requests for agreement. Today, falsification remains generally allowed in the insolvency and over-indebtedness procedures as long as the tax transaction guarantees an economic advantage for the treasury over the liquidation.
Bibliography
1)https://taxdefender.it/falcidiabilita-iva-when-and-possible/
2)https://www.observatory-insolvency.it/pdf/falcidiabilita-iva-privilege/
3)https://www.corteconstituzionali.it/card-pronunciation/2019/245
4)https://www.greggio.eu/wp-content/uploads/2018/09/FS_NoteSentence-falcidiability-IVA-2017.pdf
(5)https://www.corteconti.it/Download?id=fe84095a-f69f-45e6-b744-f0b4f9153c7d
6)https://www.studiorighini.it/eu-en/la-falcifiabilita-deliva-in-theme-di-concordato-preventive.aspx
7)https://www.consulenzalegaleitalia.it/concordato-preventive/