Cassation Court Ruling No. 14821/2024: Deductible Costs and Calculation of Tax Evasion in Tax Crimes

The Fourth Criminal Section of the Court of Cassation, with ruling No. 14821 filed on April 15, 2025 (hearing of December 11, 2024), declared the appeal inadmissible against the decision of the Court of Appeal of Bologna of December 19, 2023, but – and this is where the interest lies – it reiterated a legal principle of great practical impact: in criminal proceedings for tax crimes, unrecorded costs can reduce the evaded tax only if supported by concrete evidence. The case concerned G. T., accused under art. 5 of Legislative Decree 74/2000 for failure to file a tax return.

Reference Regulatory Framework

Art. 5 of Legislative Decree 74/2000 punishes those who, in order to evade income taxes or VAT, fail to file the annual tax return, exceeding the thresholds for criminal liability. In criminal proceedings, the judge must quantify the evaded tax: an operation that, although drawing on the criteria of tax assessment, is governed by the evidentiary rules of the code of procedure (art. 192 c.p.p.).

• Art. 5 of Legislative Decree 74/2000 – Failure to file a tax return
• Art. 192 c.p.p. – Evaluation of evidence
• Consistent case law: Cass. 40412/2019; 37094/2015

The Principle Affirmed by the Court of Cassation

In matters of tax crimes, the judge, in order to determine the amount of evaded tax, is required to conduct an investigation which, while it cannot disregard the criteria for determining taxable income established by tax legislation, is subject to the limitations arising from the different purpose of criminal assessment and the rules governing it. Therefore, unrecorded deductible costs must be considered only if supported, at least, by factual allegations from which the certainty or, in any case, the reasonable doubt of their existence can be inferred, it being legitimate to infer the non-existence of those whose substance is based on mere assertions, lacking connection with the evidentiary elements. Comment: The Court refers to the different "mission" of criminal proceedings compared to tax proceedings. The criminal judge cannot proceed with an unlimited inductive reconstruction; instead, they must anchor themselves to evidence or, at least, to solid circumstantial evidence. If the defendant invokes unrecorded costs (e.g., lost invoices or cash expenses), they have the burden of providing at least a prima facie case: a contract, a bank statement, a testimony. In the absence of such corroboration, it is legitimate to presume the non-existence of the cost and, consequently, to confirm the evaded tax to the extent calculated during the tax audit.

Operational Implications for Taxpayers and Defence Counsel

The ruling translates into a series of concrete indications:

• Although criminal proceedings are not a review of the legality of tax assessments, they are partly dependent on them: the criteria for determining taxable income remain the starting point.
• The defence must prepare, from the investigation phase onwards, documentation suitable for proving deductible costs. Relying on mere party statements exposes one to the risk of expenses being disallowed.
• Professionals (accountants and consultants) can play a decisive role in recovering documents and in coordinating between tax and criminal proceedings, avoiding duplication of penalties and accessory liabilities.
• For companies operating with cash or simplified payments, the ruling serves as a warning: the lack of traceability drastically reduces the chances of costs being recognised in criminal proceedings.

Conclusions

Ruling No. 14821/2024 consolidates an existing but sometimes disregarded trend: the criminal judge cannot substitute for the taxpayer in the search for deductible costs. It is up to the defendant to provide a minimum of evidentiary support, otherwise the evaded tax and the connected criminal liability will be confirmed. The message is clear: correct and transparent bookkeeping is not just a tax compliance measure, but the first line of defence in any criminal proceeding.