Good Faith, Protection of Creditor’s Trust, Contradictory
The first principle of the tax procedure is that of good faith.
In the civil code, a distinction is made between subjective good faith and objective good faith. Subjective good faith is the belief that one is behaving according to one's own law; objective good faith is to behave objectively correctly, in the sense that, for example, the parties to a contract are required to behave in such a way as to satisfy the reasons of the other party, meet the reasons of the other party to the extent that this does not constitute a sacrifice. Objective good faith is therefore a fair-play rule.
For the tax procedure, good faith is outlined in article 10 of the Statute of the Taxpayer, which makes a very general but important statement in the first paragraph: "the relations between taxpayer and financial administration are based on the principle of collaboration and good faith ".
It is a general principle of great importance, susceptible of multiple concrete applications: taxpayers and tax authorities have the duty to collaborate actively, adopting the behavior which, with equal effectiveness, is less prejudicial to the counterparty. An important application of the principle of good faith, that is, of this principle of correctness, is the protection of custody.
Protection of custody means behaving in compliance with the legitimate expectation that has been induced in the counterpart with one's own behavior.
In tax law there are very important applications:
- if the taxpayer has asked for specific indications and has followed what is indicated to him by the offices, due to the principle of good faith and protection of the assignment, the tax authorities will not be able to contradict each other, much less apply penalties.
- if the administration with a circular declares the non-taxability of a certain transaction and, on the basis of said circular, the taxpayer does not indicate that transaction in the declaration, the administration cannot then change its mind.
The taxpayer is also required to respect the principle of good faith:
the behavior of the taxpayer who, summoned to the office to provide explanations on his declaration, refuses to cooperate by keeping silent, in order to then declare his reasons in the judgment, is prejudicial to the principle of correctness. The taxpayer's collaborative attitude can result in great savings for both parties: the adversarial carried out correctly in the administrative phase can in fact convince the taxman not to continue with the act of assessment, avoiding all the consequent expenses.
The second paragraph of art. 10 of the Statute of the Taxpayer makes a more specific statement: “Penalties are not imposed nor default interest is required from the taxpayer, if he has complied with indications contained in deeds of the financial administration, even if subsequently modified by the administration itself, or if the his behavior is carried out following events directly consequent to delays, omissions or errors of the administration itself ".
The law speaks of sanctions, says that you cannot be punished, but does not say that you cannot be taxed. In reality, the tendency of the jurisprudence goes in this direction: if the administration provides an opinion to the taxpayer on the modalities of taxation of a certain operation, and he follows the indications received, if the administration changes his mind, not only will he not be able to sanction the taxpayer, but neither will he be able to ask for a greater tax.
It is a very important principle, especially for those who carry out an entrepreneurial activity: the entrepreneur must be able to calculate all the costs of each operation, which includes the tax aspects.
The protection of custody and good faith is an expanding sector; the jurisprudence is increasing more and more, now also at the level of the Court of Cassation, the protection of the creditor’s trust.
