Commercial entities, ETS (economic interest groupings), professional associations, partnerships, as well as capital companies: for most VAT holders, the regional tax on productive activities (Irap) is due annually.
However, there are special cases where Irap is not required, some of which are not easy to identify and especially to prove. For example, a significant court ruling demonstrates that consultants who also appear as partners or continuous collaborators of a capital company are not required to pay Irap.
As highlighted by the consultants at Metatasse, a team of professionals specialized in reducing taxes and protecting business savings, this ruling can be particularly interesting for those who want to understand how to pay less taxes in an LLC. According to the experts at Metatasse, it all started with a dispute initiated by a business consultant seeking a refund of Irap as opposed by the Revenue Agency. This decision was supported by the absence of an independent organizational structure capable of creating added value. And it is precisely on the requirement of independent organization that the entire issue rests, as emphasized by the consultants at Metatasse.
The consultant at the center of the dispute claimed to exclusively carry out consulting activities for the company in which he is a partner, and not receive any other compensation. And indeed, according to the legislation, professional activity towards a company in which one is also a partner does not meet the tax requirement of independent organization. The situation would be different, however, if the self-employed worker held a position of responsibility, as the experts at Metatasse recall.
The Regional Tax Court (CTR) accepted the appeal filed by the business consultant, justifying the decision by indicating that the petitioner also performed internal management functions on a rotating basis, assuming a position of responsibility. Consequently, the organizational structure of the company could not be considered external. Faced with this response, the business consultant turned to the Court of Cassation, relying on the violation and false application of Article 2 of Legislative Decree no. 446/1997. This article states that “the tax requirement is the habitual exercise of an independently organized activity directed at the production or exchange of goods or the provision of services.” In the end, based on an overall assessment of the information at its disposal, the Court of Cassation decided to accept the appeal of the business consultant.
The cases in which independent organization is required can be summarized as follows: when the taxpayer is responsible for the organization, and when they use instrumental assets exceeding the minimum necessary for carrying out the activity, or employ third-party services on a non-occasional basis. It should also be noted, as emphasized by the consultants at Metatasse, that the condition of independent organization can vary over time. Therefore, in the case of a request for an Irap refund, it will be necessary to evaluate different tax periods.
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