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cooperative compliance seems to offer taxpayers
the possibility to manage more effectively the rising
risks in the area of TP and beyond. The advantages
of cooperative compliance regarding prevention and
resolution of disputes with tax authorities should also
be duly taken into account.
The concept of cooperative compliance was primarily
encountered by the OECD in 2008 in the context of
its Study Into the Role of Tax Intermediaries. Seeking
to understand the role of tax professionals, the OECD
underlined that tax administrations should be open
and receptive if they were to improve relations with
taxpayers. The Study concluded with recommending
that tax administrations pursue cooperative relations
with large taxpayers. The idea was further developed
in OECD’s 2013 report Cooperative Compliance:
A Framework, built on the practical experience
of several countries that had in the meantime
introduced legislation to this effect. The 2013 report
expanded the initial recommendation after affirming
the relevance of cooperative tax relations to increase
tax compliance.
In view of the above, the recent Regulation enhances
the Italian cooperative compliance framework by
clarifying some practical aspects thereof. In particular,
clarifications are made on three main areas: (i)
obligations of tax administrations and taxpayers in the
context of cooperative relations established under
the regime, (ii) procedures taking place in the context
of such relations, and (iii) reasons for dis-application
of the regime with respect to specific taxpayer. It is
also provided that competent authority at least for
the first phase of application of the regime shall be
the Cooperative Compliance Office of the IRA.
More specifically, the Regulation begins with
specifying and analyzing the principles to underpin
the behavior of the parties to the cooperative tax
relations established under the regime.
As regards IRA, its approach towards taxpayers
should be oriented towards cooperation, fairness,
transparency and legal certainty. Such principles
imply that tax administration must seek to understand
taxpayers’ business motives, be impartial, open and
responsive. It must also act with a view to enhancing
certainty in tax matters, i.e., provide prompt answers
to taxpayers’ queries and ensure that the positions
expressed are consistent and compatible with
objective and reasonable criteria and the principle
of proportionality. Such positions should also be
regularly published to allow taxpayers to adopt their
behavior to IRA’s reasonable expectations. Most
importantly, the new Regulation includes detailed
provisions as regards taxpayers’ right to privacy and
data protection. Taxpayers’ information obtained
in relation to the regime (including application for
admission) shall be treated as professional secret and
used only for the purpose of provision, irrespective
of taxpayer’s final admission to/subsequent exclusion
from the regime.
At the other end of the spectrum, taxpayers should
be cooperative and transparent in their relations
with tax administrations. Such principles should
be reflected in taxpayers’ corporate governance
mechanisms as well as in the general corporate
culture. In detail, taxpayers’ eligibility to apply for the
regime depends on the demonstration of an efficient
tax risk management system. During the period of
application of the regime to specific taxpayer, such
system must remain in place, be regularly updated to
take into account new risks and be amended in line
with any indications of the IRA.
Furthermore, cooperation and transparency demand
that taxpayers supply exhaustive information on the
tax risks identified as relevant to each tax year of
application of the regime. Equally, they are expected
to inform IRA in full detail on (i) any situations that
might engender important tax risks and (ii) any
transactions that could be perceived as constituting
aggressive tax planning. Finally, cooperative taxpayers
are expected to implement corporate governance
strategies driven by the values of honesty, fairness
and respect of tax laws. Such values should also be
incorporated in writing, e.g. in ethical codes, codes of
conduct, behavioral guidelines.
Following specification of the above obligations, the
Regulation details certain procedures taking place
in the context of the regime, from admission to the
closing of the tax year, and their interaction with
other tax procedures.
Major weight is attached to the establishment of
constant dialogue between IRA and cooperative
taxpayers. To this end, for each cooperative
taxpayer a delegated team is formed by authorized
representatives of both parties to the cooperative
relation to lead the application of the regime. The
Regulation refers also to (i) an opening meeting,
for the joint specification of materiality thresholds
in relation to tax risks to be communicated by the
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