The Italian Supreme Court, in ordinanza n. 26234/2026, delivered a pivotal interpretation of the “Omnibus” decree (Decree-Law 113/2024, converted into Law 143/2024) concerning the presumption of occult dividend distribution in closely-held companies (società a base ristretta). The new legislation narrowed the scope of the presumption: it now triggers only for non-existent costs (costi inesistenti), i.e., costs that never occurred, excluding costs that are merely non-deductible for other reasons (e.g., lack of documentation, exceeding statutory limits, or violation of the inerenza principle). Crucially, the Court held that this favorable narrowing does not have retroactive effect. Therefore, for fiscal years ending before the decree’s entry into force (9 August 2024), the previous broader presumption applies, which encompassed all non-deductible costs. The ruling provides legal certainty by confirming the principle of non-retroactivity of substantive tax provisions (Article 3 of the Statute of Taxpayer Rights, Law 212/2000), while simultaneously validating past assessments raised under the old regime.
Key Takeaways
- Prospective Application Only: The restrictive interpretation (presumption limited to non-existent costs) applies exclusively to tax periods starting on or after 9 August 2024. Assessments for prior years based on the broader presumption (any non-deductible cost) remain legally sound and cannot be challenged on the basis of the new law.
- Clear Distinction Between Cost Categories: The Court drew a sharp line between costi inesistenti (fictitious costs with no economic reality) and costi indeducibili (real costs that fail deductibility requirements). Only the former now trigger the dividend presumption. This requires companies to rigorously classify cost adjustments in tax returns and maintain evidence of the economic reality of expenses.
- Compliance Strategy for Mixed Periods: Groups with fiscal years straddling the effective date must apply the old rule for the portion before 9 August 2024 and the new rule thereafter. This may necessitate dual tracking of cost adjustments and proactive disclosure in tax returns to avoid automatic presumption triggers. Tax advisors should review pending litigation and voluntary disclosure opportunities in light of this temporal boundary.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement