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.