Territorial jurisdiction over tax declaration offences is to be identified as the place where the taxpayer has his/her tax domicile, meaning – for legal persons – as the effective, and not merely the formal, headquarters.

This is an interesting ruling by the Italian Supreme Court regarding the territorial jurisdiction over tax declaration offences.
The Third Section, with the judgment of 14 September 2020, no. 27606, provided valuable information on the “correct” interpretation of the notion of “tax domicile”. Indeed, this term, pursuant to article 18(2) of Italian Legislative Decree no. 74/2000 establishes the place where the offence was committed and, therefore, the territorial jurisdiction.
Thus, the Italian Supreme Court has clarified that the “tax domicile” cannot be identified formulaically as the place in which the taxpayer, and in this particular case the legal person, has their legal or registered headquarters, but, instead, reference needs to be made to the place in which the company’s effective headquarters are located.
The effective headquarters are the place where the entity carries out administrative and management activities, where shareholder/general meetings are held, and, therefore, in general, “the place permanently used for centralisation, in terms of internal affairs and relationships with third parties, of corporate bodies and offices with the view of doing business and driving the entity’s operation” (Cass., Sect. V, 4 June 2019, no. 15184). The Court’s reasoning appears convincing.

The full version of this article is only available in Italian.