The Firm obtains referral to the Constitutional Court of the temporary solidarity contribution for 2023 on 2022 energy windfall profits.
The firm, with a team composed by Prof. Giulio Tremonti, partners Giuseppe Pizzonia and Marco Emma and associate Riccardo Rinaldi, (the first two as proxies, part of the defense team also composed by lawyers of a leading administrative law firm), obtained before the Lazio Regional Administrative Court (TAR del Lazio) the referral to the Constitutional Court of the temporary solidarity contribution for 2023 introduced by Article 1, paragraphs 115 et seq. of the Budget Law 2023, in the interest of a client operating in the electricity sector.
In the pertinent Order, the Regional Administrative Court endorsed the arguments raised by the Firm, pointing out conflicts with both European Union law and Articles 117, 3 and 53 of the Italian Constitution.
In detail, the Court found that the “tax” trespassed the limits prescribed by EU Regulation 1854/2022 having the legislator included among the taxable persons companies other than those operating in the mining and refining sector, thus creating obvious mismatches at the EU level.
Eventually, the Court stated that the method for determining the tax base conflicts with the principles of equality, proportionality, reasonableness and taxable capacity. Indeed, given that such method can also be influenced by “items that have nothing to do with ‘windfall profits’ resulting from the rising of prices of energy products”, it results as not suitable for taxing the actual windfall revenues generated by the increase in energy prices.
In addition, according to the Court, part of the increase in profits of 2022 was caused by a mere re-expansion of demands following the recovery from the Covid-19 pandemic and the subsequent economic revitalization.
In addition, the Regional Court notes that the contribution affects income already taxed with the previous extraordinary contribution, introduced by Article 37 of Decree-Law No. 21/2022, and, for the month of December 2022, with the cap on market revenues applied to operators of non-renewable-source-fueled plants (Art. 1, para. 30 et seq. of Budget Law 2023).
Finally, the Court states that Section 118 cited above is in breach of Articles 3 and 53 of the Constitution as it establishes that the contribution is nondeductible for corporate income tax (IRES) and Italian Regional Tax on Productive Activities (IRAP) purposes.
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