The penalties provided for false VAT numbers, i.e., all those situations in which a person opens


VAT number


, not to carry out a real independent professional activity, but to collaborate permanently with a company, thus masking a contract of employment, are not that uncommon in an economic situation, where many companies seek expedients to avoid establishing onerous labor relations such as those related to employment.

In view of the many questions we receive on this topic, we have decided to take a question received from our readers, to offer a general and homogeneous answer on the subject, so as to try to clarify all doubts about these particular cases.

La Law no. 92/2012 intervened by going on to change the labor market, going on to change the main types of contracts for both employment and self-employment.

The rationale of the Reform was to counter the phenomenon of so-called “false VAT numbers,” i.e., those relationships that, although they are framed as pure autonomy with a work contract, actually conceal forms of subordinate collaboration.

The legislature, because of this, wanted to include a relative legal presumption which, upon the existence of certain indices and in the absence of proof to the contrary, requalifies the self-employment relationship with VAT number into a permanent employment relationship, pursuant to Articles 61 and 69 of Leg. n. 276/2003.

Relative legal presumption

The relative legal presumption results in areversal of the burden of proof, forcing the principal (company) to have to overcome the presumption by proving the non-existence of the elements of continuity and coordination of work activity.

In the absence of the proof, the inspection body administratively or the court judicially may proceed to requalify the existing employment relationship with all the sanctioning consequences. This is without prejudice to the possibility for supervisory bodies or the worker to apply the ordinary evidentiary regime if the presumption does not operate.

The aforementioned presumption does not operate for all those services characterized by High theoretical competence or technical-practical skills and by a minimum profitability fixed by law, nor for all those carried out in the exercise of professional activities for which the system requires registration with a professional order or with special registers, rolls, rolls or qualified professional lists as identified by special decree December 20, 2012.

The name given to the employment relationship does not assume decisive importance since the qualification of the relationship itself must be determined by the substantive manner in which the service is performed.

Criticism of this rule is numerous, and in recent years many companies have decided to do without certain self-employed workers so as not to fall under the legal presumption.

False VAT returns: operational implications

“Pure“ self-employment, often framed as “VAT-registered work,” manifests itself in the following forms:

• Work contract (Articles 2222 et seq. Civil Code);
• Intellectual work contract (Articles 2230 et seq. Civil Code).

A key characteristic is absolute operational and organizational autonomy. In fact, the self-employed worker independently decides on the time, manner and means necessary for the performance of the service, is not subject to the managerial, organizational, disciplinary and supervisory power of the principal, and operates without any coordination with the principal’s activity.

The legislature has provided that certain contract models are exempt from the requirement to identify a specific project or:

• Agents and sales representatives;
• Intellectual professions involving membership in appropriate professional registers;
• Members of management and supervisory bodies of companies (e.g., directors, auditors, auditors);
• Participants in colleges and commissions;
• Those who receive old-age pensions;
• Collaborations carried out vis-à-vis public administrations;
• Relationships carried out in favor of amateur sports associations and clubs affiliated with national sports federations, associated sports disciplines and promotion bodies recognized by CONI, as identified and regulated by Article 90 of Law Dec. 27, 2002, no. 289.

Occasional collaborations are also excluded from the specific project requirement.

The subordinate work

A subordinate worker is defined by Art. 2094 c.c. as “one who undertakes through remuneration to cooperate in the enterprise, performing intellectual or manual labor in the employ and under the direction of the entrepreneur.”

The key feature is the subordination bond, that is, the subjection of the worker to the managerial, organizational, supervisory and disciplinary power of the employer, resulting in a limitation of the worker’s autonomy and inclusion, on a stable basis, within the company organization.

Some indicators are indications of the existence of subordination i.e., the repetitiveness and fixed measure of remuneration, the provision of working hours, the need to request leave and justify absences, and the absence of risk on the part of the worker.

Self-employment

Law no. 92/2012, as mentioned above, provided for a relative presumption under which services performed by a VAT-registered person are considered, in the presence of certain indices and in the absence of proof to the contrary, employee relations.

The requalification of the VAT-registered relationship into employment involves the application of the relevant regulations with the risk of seeing the existing relationship converted into permanent employment.

This is what Article 69-bis of LD. n. 276/2003 introduced by Art. 1, paragraph 26, of Law no. 92/2012.

The legislation underwent some amendments by Art. 46-bis of Decree Law no. 83/2012, converted into Law no. 134/2012 and some additions by Ministerial Decree Dec. 20, 2012 of the Ministry of Labor.

The latter also provided the first clarifications on the new regulations in Circular No. 32 of December 27, 2012.

Art. 69-bis, paragraph 4, of Leg. n. 276/2003, in terms of the effective date of the rule, provided the following:

• For relationships in progress as of July 18, 2012, the provisions under consideration will apply after 12 months (as of July 18, 2013) to allow for appropriate adjustments;
• For new relationships entered into on or after July 18, 2012, the provisions take effect according to the specifics to be said below.

By Circular no. 32 of Dec. 27, 2012, the Ministry of Labor substantially postponed the first checks until July 2014.

Small sole proprietorships

The Ministry of Labor, while excluding corporate entities from the scope of the rule, believes that the new provisions are applicable not only to professional self-employed persons without a business organization, but also to those organized as small sole proprietorships.

The Prime Minister’s Office confirmed that the regulations do not apply to services rendered by VAT-registered workers in favor of public administrations.

False VAT returns and legal presumption

Art. 69-bis of Legislative Decree. n. 276/2003, unless proven otherwise by the principal, stipulates that services performed by persons with VAT numbers are requalified as employment relationships if at least two of the following conditions are met:

• Collaboration with the same principal has a total duration at 8 months per year for 2 consecutive years (lett. a – time criterion);
• The consideration arising from such collaboration, even if billed to several parties attributable to the same center of interest, constitutes more than 80% of the total annual consideration received by the collaborator over 2 consecutive calendar years (lett. b – turnover criterion);
• The employee has a fixed workstation at one of the principal’s premises (lett. c – organizational criterion).

-False VAT returns: time criterion

With reference to the time criterion, the Ministry of Labor in Circular No. 32/2012 clarified that the time requirement is to the calendar year.

The period under analysis must be at least 241 days, even if not continuous.

For the purposes of the Ministry of Labor’s assessment, any document capable of providing information, even indirectly, on the duration of the activity performed, such as, for example, letters of assignment or invoices in which the time frame of reference of the professional service is indicated, becomes relevant. Among other things, during verification, the inspection body may also use testimony from third parties.

-Fake VAT returns: turnover criterion

With reference to the turnover criterion, which is based on a percentage and not on a fixed figure, the Ministry of Labor, again in the aforementioned Circular, clarified that only the amounts invoiced (the collection does not matter) under the VAT number to the same principal or to several legal entities traceable to a single center of imputation of interest are to be considered.

The standard refers to a time frame equal to two consecutive calendar years, that is, two 365-day periods that do not necessarily have to coincide with the calendar year. The computation must be made retroactive to the date on which the existence of the assumption in question is invoked.

In any case, if it is intended to enforce this condition together with the previous one, the Ministry of Labor believes that the calendar year criterion necessarily attracts the income criterion as well. On the other hand, in the case where this criterion is to be made to operate with that of fixed location, reference should be made to the exactly previous calendar biennium.

-False VAT returns: organizational criterion

With reference to the organizational criterion, the Ministry of Labor confirmed that this condition occurs when, in the time frames previously identified, the service provider can make use of a location on the client’s premises without having exclusive use of it and regardless of the possibility of using any equipment necessary for the performance of the activity.

Proof to the contrary to be borne by the principal

Where there is a relative presumption, proof to the contrary from the principal is permissible. The Circular of the Ministry of Labor no. 32/2012 did not clarify whether proof to the contrary can also be provided by the VAT number holder.

The evidence must show that the elements of continuity and coordination do not exist.

Exceptions to the presumption

The presumption does not operate under Art. 69-bis, paragraph 2, of Leg. n. 276/2003:

• Where the performance is marked by high-level theoretical skills acquired through significant training courses, or by technical/practical skills acquired through relevant experience gained in the concrete exercise of activities;
• If the benefit is carried out by a person with a gross annual income from self-employment of not less than 1.25 times the minimum taxable level for social security purposes, or 18,662 euros (amount that increases year by year).

The Ministry of Labor has clarified that the presumption does not operate if both of the two conditions set forth are met.

False VAT numbers and professional registration

In addition, the presumption does not operate in the presence of work performed in the exercise of professional activities for which the law requires registration with a professional order or with special registers, rolls, rolls or qualified professional lists, dictating specific requirements and conditions.

By special decree dated December 20, 2012, the Ministry of Labor provided special list of benefits that allow the disapplication of the regulations under consideration. The link at which the decree can be downloaded is as follows: www.lavoro.gov.it/NR/rdonlyres/…/20121227DM.pdf

In case some activity is not included in the list, Art. 2(1) of the aforementioned Decree makes it possible to identify whether membership in a particular register, roll, role or list allows for an exception to the new provision.

In essence, the exemption is not recognized in all cases in which the registration has a mere declaratory publicity function and, therefore, takes place on the basis of the interested party’s request alone, without any check on the existence of requirements and conditions.

With reference to the above two conditions, the legislature wanted to allow exemption only against “significant educational backgrounds” and “relevant experience gained in the actual practice of activities,” and set a minimum income limit that is equal to 18,662.50 euros, given by multiplying by 1.25 the minimum taxable income established for the calculation of the IVS contribution due by artisans and traders in that year, equal to 14,930 euros.

Interestingly, for this condition, the legislature used an income criterion and not consideration earned. The Ministry clarified that the income is before withholding taxes and must refer exclusively to self-employment activity, excluding any other income from both employment and ancillary work.

Certification of skills

Specifically on training, the Ministry of Labor in Circular No. 32/2012 provided interesting suggestions while waiting for a timely system of skills certification to be made final.

In anticipation of this, the Ministry clarified that the “high degree” and “relevant experience” can be demonstrated through:

• Possession of a degree awarded at the end of the second cycle of the education and training system (high school system and vocational education and training system);
• Possession of an undergraduate degree (bachelor’s degree, PhD, postgraduate master’s degree);
• Possession of qualifications or diplomas obtained at the end of any type of apprenticeship;
• The possession of a qualification or specialization awarded by an employer under an employment relationship and pursuant to the relevant collective agreement. In the latter case, however, it is considered that only a qualification or specialization held for at least 10 years can guarantee technical and practical skills from “relevant experience.”
• The performance of the self-employed activity in question exclusively or predominantly in terms of income.

In any case, in order to be considered useful for the purpose of exclusion from the scope of application of the rule, certificates, diplomas and degrees must evidently be relevant to the work performed by the employee.

Conclusions and practical effects

The requalification of a VAT-registered self-employment relationship into a coordinated and continuous collaboration entails the whole series of tax and social security effects provided by the rule of the contract obtained by the transformation.

The inspection bodies will be required, when re-qualifying the employment relationship, to draw up the single assessment report to be forwarded to INPS and INAIL for the recovery of contributions and premiums and determine administrative fines for non-compliance.

The rationale for the rule is clear, and although changes have been made to the original text, the risk of litigation remains high.

In addition to the proper preparation of contractual documentation and the employer’s retention of documents evidencing high-level competency, it is advisable in doubtful situations to resort to the institution of labor contract certification under Art. 75 et seq. of Leg. n. 276/2003. A pre-certified contract produces effects that must be disallowed by a judgment on the merits and, more importantly, does not allow inspection bodies to directly requalify the relationship in the absence of such a judgment.

Among other things, when certifying the contract, the parties will be invited to set forth their own evaluations, evaluations that the court must take into account before disallowing the certification.