Commentary on Judgment No. 11464 of 2024: Set-off of Tax Credits in Insolvency Proceedings

The recent judgment No. 11464 of April 29, 2024, issued by the Court of Cassation, addresses a crucial issue concerning the set-off of tax credits, particularly VAT, in situations of bankruptcy and other insolvency proceedings. This ruling is part of a complex regulatory framework, where the rights of creditors and the prerogatives of the Tax Administration must be carefully balanced.

Context of the Judgment

The case at hand concerns a request for reimbursement of a VAT credit accrued during insolvency proceedings and subsequently assigned. The Court ruled that the Tax Administration has the right to offset "homogeneous" tax credits, meaning credits that also arose after the commencement of the insolvency proceedings. This decision has significant implications for parties involved in insolvency proceedings, as it clarifies the Administration's position regarding the set-off of tax credits.

Analysis of the Ruling

The Tax Administration, when presented with a request for reimbursement of a VAT credit accrued during insolvency proceedings and subsequently assigned, may legitimately offset "homogeneous" tax credits against the assignee requesting reimbursement, meaning credits that also arose after the commencement of the insolvency proceedings. The discharge effects connected to the closure of the proceedings do not prevent such set-off; however, in such cases, the Tax Administration bears the burden of proving the existence of the tax credits being offset in court, and the production of mere extract of roles is insufficient.

This ruling highlights several fundamental aspects:

• Legitimate Set-off: The Court confirmed that the Tax Administration can exercise the right of set-off, even when a VAT credit is requested for reimbursement.
• Homogeneity of Credits: The credits being offset must be homogeneous, meaning they must have also arisen after the commencement of the insolvency proceedings, to justify the set-off.
• Burden of Proof: The Administration has the duty to prove the existence of the tax credits being offset, and cannot limit itself to presenting mere extract of roles.

Conclusions

Judgment No. 11464 of 2024 represents an important ruling for Italian jurisprudence in the field of tax law and insolvency proceedings. It clarifies the position of the Tax Administration and the rights of VAT credit assignees, establishing a fundamental principle: set-off is possible, but it must comply with well-defined criteria, and the Administration is required to adequately demonstrate its claims. This balance between creditors' rights and the Administration's powers is essential to ensure the proper management of insolvency proceedings and the protection of the interests of all parties involved.