Legal collection and waiver of dividends: the Italian Inland Revenue Agency clarifies with Answer no. 59/2025 59/2025
Knowing good advice In its response torequest no. 59 dated 3 March 2025, the Italian Inland Revenue Agency addresses the issue of legal collection in relation to the waiver of dividends by shareholders, particularly when the dividends have already been approved by the company. In the case under analysis, the applicant company reports that: having approved the distribution of dividends when approving the 2020 financial statements; never having paid out the approved amounts; wishing to proceed with only a partial distribution of the approved dividends; having received confirmation from the shareholders (natural persons who are not entrepreneurs) that they waive the remaining portion, so that this amount can be allocated to the extraordinary reserve. Firstly, it should be noted that the legal collection argument is based on the principle that the sums waived by the shareholder have the same tax effect as if they had first been collected and then returned by the shareholder. More specifically, the waiver of receivables relating to income subject to cash taxation (such as directors’ remuneration) presupposes the legal collection of the receivable and therefore entails the obligation to tax such amounts, including through withholding tax (see Ministerial Circular No. 73/1994 and Inland Revenue Agency Resolution No. 124/2017). Returning to the specific case, the company retained that the dividend waived by a shareholder who was a natural person and not an entrepreneur did not generate any active tax effect, constituting a contingent asset under Article 88, paragraph 4-bis, of the TUIR. This position is based on the principle that the waiver does not alter the tax value of the shareholding, as confirmed by the Court of Cassation in its ruling no. 16595/2023. 16595/2023. However, in its response no. 59/2025, the Inland Revenue Agency reaches different conclusions, stating that this rule is not applicable to individual shareholders who are not entrepreneurs, as there is no difference between the tax value and the nominal value of the credit waived. In these cases, there is an increase in the tax value of the shareholding, with the consequent absence of taxable extraordinary income for IRES purposes. Finally, the Tax Office clarifies that waived dividends must be considered legally collected, making it necessary to apply the 26% withholding tax, without any obligation for the company to subject any extraordinary income to taxation. Date of publication Author Areas of activity Assistenza Fiscale (4)
Milleproroghe (Law Decree No. 202 dated 27 December 2024): Conversion into Law No. 15 dated 21 February 2025 – Main Tax and Regulatory Changes
Knowing good advice Law Decree No. 202 dated 27 December 2024 (the ‘Milleproroghe’ decree) was converted into Law No. 15 dated 21.2.2025, published in the Official Gazette No. 45 dated 24.2.2025, which came into force on 25.2.2025, introducing significant changes to the original text. Main provisions Scrapping of tax collection notices – Readmission due to forfeiture Paragraphs 1-2 of Article 3-bis of Law Decree 202/2024, inserted during conversion, provided for readmission to the ‘scrapping of tax collection notices’ under Law 197/2022 (2023 Budget Law) for taxpayers who: Had submitted an application by 30 June 2023 Had forfeited their rights on 31 December 2024 due to irregularities in payments Had debts entrusted to Collection Agents between 1 January 2000 and 30 June 2022 Remote meetings – Extension to 31 December 2025 Paragraph 14-sexies of Article 3, introduced during conversion, extended the use of emergency regulations for meetings of companies, associations and foundations (Article 106 of Law Decree 18/2020) to 31 December 2025, previously expiring on 31 December 2024. Tax Credit Transition 5.0 – Retroactivity Article 13, paragraph 1-quinquies, inserted during conversion, amended Article 38, paragraph 2, of Law Decree 19/2024, making investments incurred before the submission of the application for access eligible for the tax credit Transition 5.0, provided they were made on or after 1 January 2024. Deadlines to be monitored by businesses Catastrophic risk insurance – Extension to 31 March 2025 Article 13, paragraph 1 extends the deadline for the mandatory stipulation of catastrophe insurance policies by companies registered in the Register of Trading Companies to cover damage to land, buildings, plants, machinery and equipment from 31 December 2024 to 31 March 2025. National Electronic Waste Traceability Register (RENTRI) – New Deadlines Article 11, paragraph 2-bis, inserted during conversion, provides for the extension from 60 to 120 days of the deadline for registration with RENTRI. For initial producers of special waste with more than 50 employees and other obligated parties, registration must take place between 15 December 2024 and 14 April 2025 (previously 13 February 2025). Date of publication Author Areas of activity Assistenza Fiscale (4)
New Rules on Payment Traceability: Changes Introduced by the 2025 Budget Law
Knowing good advice The 2025 Budget Law introduced important changes to the Consolidated Income Tax Law (TUIR) regarding payment traceability (Art. 1, paragraphs 81-83, Law No. 207 dated 30 December 2024). Starting from 1 January 2025, expenses incurred for food, accommodation and transport during business trips by employees or collaborators will only be deductible if paid for using traceable payment methods. Which expenses are involved? The new provisions concern expenses incurred for: – Food and accommodation during business trips; – Analytical reimbursements for travel and transport expenses, including those incurred by taxi or private hire vehicle with driver; – Entertainment expenses incurred by companies for promotional and networking activities. These expenses will only be deductible if payment is made using traceable means such as credit cards, debit cards or bank transfers (Art. 23, Legislative Decree 241/1997). What are the consequences for companies and employees? Failure to use traceable payment methods will result in tax penalties for companies, self-employed workers and employees. Let’s look at the details: Non-deductibility of expenses for businesses and self-employed workers Expenses for food, accommodation, non-scheduled transport and entertainment will not be deductible from taxable income for IRES and IRAP purposes, irrespective of the nature of the expense or the context in which it was incurred. Taxation of reimbursements for employees Expenses incurred by employees during business trips, if reimbursed by the employer without adequate traceability, will be considered taxable income and therefore taxed as income from employment. Critical issues and compliance requirements for companies These new provisions require companies to adapt quickly to avoid tax penalties and problems in managing reimbursements. The main critical issues include: – Lack of detailed guidelines on certain expense items; – Need to implement dedicated company policies for travel management; – Adoption of more rigorous internal procedures for verifying and storing traceable payment receipts. The Tax Authorities should provide further clarification to deal with ambiguous situations or those not covered by current legislation. In the meantime, companies are advised to update their procedures and adequately train the staff responsible for administrative management. The traceability of payments is not only a tax obligation but also an essential condition for ensuring the correct deduction of expenses and avoiding unexpected tax burdens, both for the company and its employees. Date of publication Author Areas of activity Assistenza Fiscale (4)