[co-author: Allyson McCrory]
On July 9, 2025, the Italian Supreme Court issued a significant judgment (No. 25167/2025) concerning liability for fraudulent tax return filing through the use of invoices for non-existent transactions (Article 2 of Legislative Decree No. 74/2000), in relation to a procurement contract suspected of masking illicit labor supply.
The Italian Supreme Court annulled, with referral, the conviction for the sole director of the commissioning company. It emphasized the necessity to adequately demonstrate specific intent (i.e., dolo specifico) in such offenses and rejected any automatic presumption that the offense applies simply because an unlawful supply of labor is concealed behind a procurement contract.
The Supreme Court’s decision clarifies that the mere existence of a procurement contract that conceals unlawful supply of labor does not, by itself, constitute a sufficient ground for a conviction for fraudulent tax return filing.
Factual and legal background
The case involved the sole director of a company convicted for using invoices for a non-existent transaction.
The conviction at first and second instance was based on the assumption that the company’s tax return filings, which appeared to document a legitimate procurement contract, were in fact concealing an unlawful labor supply scheme designed to evade both tax and social security obligations.
Challenging these convictions, the defense of the director petitioned the Supreme Court, arguing that the Court of Appeals had failed to deliver any substantial reasoning regarding the specific intent of the defendant to evade taxes, which is a necessary element of the offense of fraudulent tax return filing.
The Supreme Court’s decision
Reiterating established jurisprudence, the court emphasized that it is not sufficient to demonstrate the use of false invoices, but the prosecution must also prove both of the following:
- General intent (i.e., dolo generico): The defendant must be aware that he/she is filing tax returns including fictitious costs.
- Specific intent (i.e., dolo specifico): The defendant must have the deliberate and concrete purpose of evading taxes, even if the actual tax saving is not achieved.
The Supreme Court has clarified that these two requisites must be ascertained by the judge and cannot be automatically derived merely from the fact that the defendant made use of a fictitious procurement contract in order to conceal an unlawful supply of labor.
In the case at hand, the Supreme Court found that the Court of Appeals had failed to provide adequate reasoning regarding the existence of specific intent. The judgment was annulled and remitted for a new trial.
Conclusions and takeaways
This judgment is highly significant. By referencing previous case law, the Supreme Court has emphasized the necessity to establish specific intent to evade taxes. In practical terms, this means that the mere presence of a sham procurement contract concealing irregular labor supply cannot automatically give rise to a conviction for tax fraud.
However, this does not absolve companies of their responsibilities. Companies must ensure that all contractual and invoicing arrangements reflect genuine transactions and are supported by clear documentation of the underlying relationship. Where labor supply or service contracts are involved, particular care should be taken to avoid structures that could be interpreted as mere “shams” to conceal irregular practices. Failure to do so could expose the company to criminal proceedings relating to such contracts.
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