The Venice preliminary investigations judge, at the request of the local Public Prosecutor's Office, ordered the preventive seizure of assets worth more than €4.7 million from a foreign-based company trading in hydrocarbons and its legal representative, who is under investigation for failing to file an income tax return. The order was executed by officers from the Comando provinciale della Guardia di Finanza (Provincial Command of the Italian Financial Police). The assets seized include a €4.1 million VAT credit for which the company had already submitted a refund request to the Agenzia delle Entrate (Italian Revenue Agency). The investigation followed a tax inspection which, according to investigators, uncovered an undeclared permanent establishment operated by the company in Italy.
On paper, the company had registered with the Italian tax authorities by appointing a fiscal representative, a role that only allows it to comply with VAT obligations. Under its declared business model, products were only to be stored in Italy before being transferred and resold in other European Union countries under tax suspension arrangements. Prosecutors, however, reconstructed a different type of operation. The company allegedly sold fuel and petroleum products directly to Italian customers, improperly using its foreign VAT number, which was intended solely for tax-exempt transactions under excise duty suspension. The business was allegedly conducted from company premises provided free of charge, where employees and sales staff worked on a permanent basis managing contracts, orders and logistics operations. Proceeds from sales to Italian customers were allegedly paid into a bank account opened in Italy and used exclusively for this purpose.
The concept of a permanent establishment, governed by Article 162 of the Consolidated Income Tax Act and double taxation treaties, identifies a fixed place of business through which a foreign company carries out its activities in another country. Investigators believe the Venice operation meets this definition: income from sales made in Italy should therefore have been taxed in Italy, whereas it was allegedly kept entirely outside the Italian tax system by exploiting the cross-border nature of the transactions. The undeclared taxable base is estimated at almost €20 million. On this amount, the Guardia di Finanza calculated more than €4.7 million in unpaid tax, attributed to the company's legal representative, who is registered with the Anagrafe degli italiani residenti all'estero (Registry of Italians Resident Abroad, AIRE) and lives in the United Arab Emirates. He has been reported for failure to file a tax return.
