A tax audit or a notice of assessment affects a business well beyond the amount in dispute. It absorbs management time, influences relationships with banks and partners, and may expose directors personally. Handling an assessment well therefore means looking at the procedural issues together with their financial, organisational and reputational consequences.

From audit to assessment

Tax claims in Italy arise from desk reviews, cross-checking of databases, and on-site inspections and audits carried out by the Italian Revenue Agency (Agenzia delle Entrate) or the Finance Police (Guardia di Finanza). The Taxpayers’ Bill of Rights (Law 212/2000) grants specific protections during an audit: the right to be told why the audit is taking place, limits on how long inspectors may remain on the premises, the right to be assisted by an adviser and to have observations recorded in the minutes.

Under the recent tax reform, Article 6-bis of the Bill of Rights introduced a general duty of prior dialogue (contraddittorio preventivo). Subject to exceptions, such as automated assessments, most appealable tax acts must be preceded by a draft assessment, giving the taxpayer time to submit comments; failing this, the act can be annulled. This stage matters: what is argued and documented here often shapes the outcome of the whole case.

Settling the dispute

Before or instead of litigation, Italian law offers several routes:

  • Assessment by agreement (accertamento con adesione, Legislative Decree 218/1997): a negotiation with the tax office that can lead to an agreed reduction of the claim and of penalties. It can be requested after the draft assessment and, in certain cases, after the final notice, which suspends the deadline to appeal;
  • Self-correction (autotutela): the authority’s power to cancel or amend its own acts, now governed by Articles 10-quater and 10-quinquies of the Bill of Rights, and mandatory in specific cases of manifest unlawfulness listed by law, such as calculation errors or a mistaken taxable event;
  • Court settlement (conciliazione giudiziale): an agreement reached while proceedings are pending, also with reduced penalties.

The former mandatory pre-litigation complaint and mediation procedure for smaller disputes was abolished for appeals served from 2024. Whether to settle or to litigate should be decided on a realistic view of the evidence, costs and timing.

Proceedings before the Italian tax courts

Tax litigation is governed by Legislative Decree 546/1992, extensively amended by Law 130/2022 and subsequent reforms, which have also consolidated the rules into a Consolidated Act on Tax Justice (Legislative Decree 175/2024), due to apply from 2027. The former tax commissions have become the Corti di Giustizia Tributaria of first and second instance, and a professional tax judiciary is being introduced. Second-instance judgments can be appealed to the Italian Supreme Court (Corte di Cassazione).

Key points for businesses:

  • the appeal must normally be served within sixty days of notification of the assessment, and the deadline is strict;
  • assessments are generally immediately enforceable, but the court can suspend enforcement where there is a risk of serious and irreparable harm;
  • the law expressly places on the tax authority the burden of proving the alleged violations, and the court must annul the assessment if that proof is missing, contradictory or insufficient;
  • written witness statements are now admissible, within statutory limits;
  • lower-value disputes are heard by a single judge.

A defence relies on accounting records, contracts, invoices, expert reports and a consistent economic reconstruction. An effective appeal focuses on the grounds that are genuinely sound, distinguishing procedural defects from substantive issues.

Criminal exposure

Some tax claims may also constitute criminal offences under Legislative Decree 74/2000, such as fraudulent or inaccurate returns, failure to file, issuing or using invoices for non-existent transactions, failure to pay over taxes and undue offsetting of credits. Criminal and tax proceedings remain separate, but the 2024 reform strengthened the links between them. Where criminal risk exists, a single strategy is needed from the outset, as any statement made during an audit may be relevant in both forums.

When to seek legal advice

The most useful moment is the start of an audit or receipt of a draft assessment, while there is still ample room for defence. Legal advice is also advisable when the claim concerns tax credits or incentives, when directors’ liability is at stake, or when the amount could affect the continuity of the business. A well-structured defence works alongside the company’s accountants and brings together tax, criminal and financial considerations.

This article is for general information only and does not constitute legal advice.