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Italy: Robin Hood Tax on energy companies declared illegitimate



Giuliano Foglia

Giovanni d’Ayala Valva

With the February 11 2015 decision n. 10/2015, the Italian Constitutional Court declared the 'Robin Hood Tax' unconstitutional. The removal of the Robin Hood Tax is being welcomed by energy companies, since it determines a significant reduction of the tax burden (from 34% per cent to 27.5%) and boosts earnings. The Robin Hood Tax was introduced in 2008 as a surtax on certain companies operating in the energy sector to rein in what was considered an excessive profits from high oil prices. Starting from 2011, it became applicable also to companies active in the renewable energy sector

In a nutshell, the Robin Hood Tax consisted in a surcharge of 6.5% of the ordinary corporate income tax rate and it was applicable to companies that exceeded certain financial thresholds.

With the decision n. 10/2015 the Constitutional Court upheld the taxpayers' claim and declared Robin Hood Tax in breach of the principles of equality and ability-to-pay established by articles 3 and 53 of the Italian Constitution.

In particular, the Court underlined that: (i) Robin Hood Tax was supposed to tax extra-profits but it actually taxed the overall taxable income; (ii) the intention of the legislator was to introduce a temporary surtax to face specific economic circumstances but it has become an ordinary corporate income tax for energy companies, without any specific link with the taxpayer's ability to pay; (iii) notwithstanding the express ban provided by the law, the impossibility to prevent companies from shifting the burden of such tax onto consumers was proved.

According to decision n. 10/2015 the declaration of unconstitutionality does not apply retroactively and its removal is, therefore, effective as from the day after its publication in the Official Gazette (that is, February 11 2015).

Despite Italian law allowing for decisions of the Constitutional Court to be, in principle, retroactive, the Court in this case expressly limited its verdict to the future, to avoid a potentially massive adverse effect on the Italian public accounts.

This should mean that there is no room to claim for the refund of the sums paid in the past.

It is, however, unclear whether the decision affects 2014 considering that calendar year taxpayers have still (i) to pay the balance of the corporate income tax (in June 2015); and (ii) to file the 2014 tax return (in September 2015). It is also still unclear what happens for taxpayers whose fiscal year does not coincide with the calendar one. Other issues have arisen with respect to the impact of the decision in relation to the relevant accounting treatment of the deferred tax assets and liabilities due to taxable temporary differences.

Clarifications by the Italian tax authority are expected.

Giuliano Foglia ( and Giovanni d'Ayala Valva (

Tremonti Vitali Romagnoli Piccardi e Associati

Tel: +39 06 3218022 (Rome); +39 02 58313707 (Milan)


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