Over this last period, the Italian legislator has introduced into our tax system some instruments which aim at preventing the emergence of new disputes and at speeding up all tax cases which are pending before the Courts for many years.

On this occasion, we would like to analyse briefly some of these new instruments, such as the possibility offered by the Tax Administration to be asked questions related to taxes, the role of the Court of conciliation in tax disputes and the new regulation of non - operating companies.

Firstly, the recognition of the tax payers' right to ask the Tax Administration specific questions has been introduced by Law No. 413/1991, art. 21, but only now has the Government taken appropriate measures to implement such regulation.

This new instrument aims at facilitating the interpretation of certain provisions which, in many cases, present numerous incertainties or may be interpratated in several ways. This new instrument will avoid to solve these problems before the Courts.

Actually, Law No. 413/1991 in its art. 21 §2 establishes on what matters the tax payers are allowed to ask questions to the Tax Authorities. These are the following:

a) questions about the interpretation of Law 408/90, art. 10 which deals with tax avoiding operations;

b) questions about the interpretation of the Decree of the President of the Republic No. 600/73, art. 37, which allows the Tax Authorities to impute certain income to an individual when weighty, precise and concordant presumptions infer to estimate that such income is holded through the medium of a third party;

c) questions about the interpretation of the Decree of the President of the Republic No. 917/86, art. 74, which regulates some cases in which tax deductions for certain costs are allowed, as for example publicity and representation costs.

Secondly, as far as conciliation for tax disputes is concerned, Decree Law No. 564/94, art. 2 has completed the Decree of the President of the Republic No. 636/72, art. 20 bis by introducing the conciliation for those cases pending before the Tax Courts. Through conciliation it is possible to arrive to a total or partial agreement in all those situations in which there is insufficient proof as to solve the case.

One of the parties may propose to present the case before the conciliation court or may be the judge of the Tax Court to propose it as well.

Conciliation may be reached before the hearing (preventive conciliation). In this case, it must be reported in a written document which must be notified to the other party and must be deposited in the Tax Court offices. Conciliation may also be reached after the first and sole hearing which is to take place before the Tax Court (judicial conciliation).

Consecuently, a reduction of the administrative sanctions will take place, which will amount to one third of the minimum of the sums due.

Thirdly, concerning non-operating companies, Law No. 724/94, art. 30, which has modified the Decree Law No. 41/95, art. 27, has introduced new provisions regarding non-operating companies.

The Law describes as "non-operating companies" those companies (limited liability companies, joint-stock companies, partnerships limited by shares, non-resident corporations) which do not have more than five employees or which turnover does not exceed Lit. 800 million.

This type of companies shoud declare a taxable income of at least 2% of their net worth and it must not be under Lit. 8 million.

Limited liability companies deserve special treatment under the new regulation. As a matter of fact, those companies having a net worth not exceeding Lit. 40 millions should declare a minimum taxable income of Lit. 4 millions. On the other hand, those limited liability companies which net worth goes between Lit. 40 millions and Lit. 150 millions should declare a minimum tax income of at least Lit. 6 millions.

Regarding the loss carryover for the losses corresponding to previous tax periods, the new provision provides that those losses may be carried over but only when the minimum tax income has been decleared.