Supreme Court’s radical shift: formal breaches in special and excise taxes cease to be essential
Tax Alert 4-2018
In its judgment of February 27, 2018, the Supreme Court analyzed whether the tax authorities could deny the application of a reduced rate or exemption in tax on oil and gas products where what is being challenged is not the use of the products but the breach of the formal requirements established by the Law and Regulations to be able to take those incentives.
The Court concluded by affirming that its “case law must be corrected” in this area, in the sense that the mere formal breach cannot automatically mean the forfeiture of the exemption or reduced tax rate if, nonetheless, it is evidenced that the products have been used for the purposes which give a right to the tax benefit. The Court based this conclusion on recent judgments of the Court of Justice of the European Union, according to which formal requirements cannot be equated to substantive ones.