Italian tax amnesty is a cheats’ charter, rules European Court

An Italian government amnesty allowing VAT cheats to escape criminal charges and administrative penalties for under or not-declared returns from 1998 to 2001 by paying a lump sum to national tax authorities has been declared illegal. The sum involved represents 2% of the VAT payable on their supplies and services in these years plus 2% of VAT deducted during the same period. The European Court of Justice found that this ‘automatic settlement’ procedure broke the EU’s sixth VAT directive and was “tantamount to a tax exemption”.