Transfer of Tax Credits within a Group: Commentary on Order No. 10810 of 2024

The recent Order No. 10810 of April 22, 2024, issued by the Court of Cassation, offers an important reflection on the methods of transferring tax credits within a corporate group, highlighting the conditions necessary for such a transfer to be considered effective towards the tax authorities. The ruling focuses on Article 43-ter of Presidential Decree No. 602 of 1973, which specifically governs this type of transaction.

Regulatory Context

Article 43-ter, paragraph 2, of Presidential Decree No. 602 of 1973, as amended over time, establishes that the transfer of tax credits can occur even in the absence of certain formalities provided for by Articles 69 and 70 of Royal Decree No. 2440 of 1923. This aspect is of fundamental importance, as it simplifies procedures for companies operating within a group, reducing the bureaucratic burden.

• The transfer of tax credits must be indicated in the tax return.
• The details of the transferee entities and the amounts transferred must be provided.
• The omission of formalities does not preclude the effectiveness of the transfer.

Analysis of the Ruling's Headnote

Transfer of tax credits within a group - Article 43-ter, paragraph 2, of Presidential Decree No. 602 of 1973 - Compliance with formalities under Articles 69 and 70 of Royal Decree No. 2440 of 1923 - Omission - Effectiveness - Conditions. Regarding the transfer of tax credits within a group, pursuant to Article 43-ter, paragraph 2, of Presidential Decree No. 602 of 1973, as amended by Article 11, paragraph 1, letter e), number 1, of Presidential Decree No. 542 of 1999 and in the text prior to the introduction of paragraph 2-bis, added by Article 2, paragraph 3, of Decree-Law No. 16 of 2012, converted with amendments by Law No. 44 of 2012, the transfer without compliance with the formalities under Articles 69 and 70 of Royal Decree No. 2440 of 1923 is effective towards the tax authorities, provided that the transferring company has already indicated in its tax return the details of the transferee entities and the amounts transferred.

This headnote clarifies that, although formalities are important, their omission does not compromise the effectiveness of the transfer. However, it is essential that the transferring company correctly completes the tax return, as this forms the basis for the validity of the operation.

Conclusions

Ruling No. 10810 of 2024 represents a significant step towards simplifying tax procedures for companies operating in groups. It offers a clear framework of the conditions that must be met for the transfer of tax credits to be considered effective. Companies must pay attention to the correct completion of tax returns to ensure full compliance with current regulations and prevent any disputes from the tax authorities.