06   Agosto   2015

Antitrust Authority

The question of the levy for the Antitrust Authority: the double tax burden imposed on businesses

Why do the operating costs of a public utility authority have to be met by companies rather than paid for from general taxation revenues? Why does the fight against trusts and monopolies have to be funded mainly by medium-sized joint stock companies operating in markets with a large number of competitors? And nine months since an appeal was lodged, why has the Provincial Tax Commission of Rome not yet set a timeframe for the first hearings given that the companies will be obliged to pay the levy punctually on 31 July? In view of these questions, Confindustria Ceramica, together with the local branches in Bologna, Parma, Reggio Emilia and soon also Bergamo, has initiated legal action aimed at having the levy imposed on Italian companies for operation of the Antitrust Authority declared unconstitutional.

From the tax year 2013 onwards, all joint stock companies with annual revenues above 50 million euros have been obliged to pay a contribution to the functioning of the Italian Antitrust Authority, initially set at 0.008 percent and currently 0.006 percent of turnover. This levy is subject to a minimum threshold of 3,000 euros and a maximum of 300,000 euros.
A total of 21 Italian companies have appealed to the Provincial Tax Commission of Rome with the aim of having the law behind the levy declared illegitimate, if necessary through a referral to the Constitutional Court, and to request reimbursement of the amount paid.

The levy in question is yet another tax of dubious constitutionality which further aggravates the already heavy tax burden of Italian companies and unfairly harms their competitiveness. In particular, the appealing companies argue that the levy is illegitimate in terms of the constitutional provisions put in place to safeguard private economic initiative and the corresponding European legislation. The most flagrant violations include failure to respect the principle of equality between parties in the same conditions and violation of the principle of progressivity of taxation with respect to companies’ effective ability to pay. This means the levy has a smaller impact on larger corporations and furthermore affects only one category of parties (corporations with turnovers above 50 million euros) for a service that benefits the entire community.

Although appeals were lodged in October 2014, the timeframes for the hearing are expected to be very long (in the region of two or three years). In the meantime, companies must naturally continue to pay the tax on an annual basis.