Capital gains on foreign shareholdings: foreign tax credit available where substitute taxation is mandatory

by A&P, Matteo Aicardi | 29 Sep, 2026 | Publications

Decision no. 413/2/2026 of the Brescia First-Instance Tax Court recognises the right to a foreign tax credit in respect of capital gains arising from the disposal of foreign shareholdings by individuals and subject in Italy to the mandatory 26% substitute tax. The...

IRAP and professional associations: the Italian Constitutional Court prioritises the substance of the professional activity over the associative form

by A&P, Matteo Aicardi | 6 Aug, 2026 | Publications

Italian Constitutional Court Decision No. 153/2026 addresses the application of IRAP to professional associations, with specific reference to notarial associations. According to the Court, the mere existence of a professional association is not sufficient to establish...

PEX capital gains: the ETR test for pre-ATAD tax years

by A&P, Matteo Aicardi | 9 Jul, 2026 | Publications

Decision no. 1434/2026 of the Milan First-Instance Tax Court addresses the low-tax jurisdiction requirement for the participation exemption in relation to a capital gain realised upon the liquidation of a foreign subsidiary. The court held that the criteria set out in...

Interest expense, business purpose and economic reasonableness: the Italian Supreme Court requires a quantitative and comparative assessment by the tax authority

by A&P, Matteo Aicardi | 25 Jun, 2026 | Publications

Italian Supreme Court decision no. 19140/2026 clarifies that the deductibility of interest expense for IRES purposes does not require a direct link to specific taxable revenues, but rather a connection with the business activity as a whole. Economic unreasonableness...

Failure to file an income tax return: foreign tax credit available where a double taxation treaty applies

by A&P, Matteo Aicardi | 11 Jun, 2026 | Publications

Italian Supreme Court order no. 16134/2026 clarifies that, where a double taxation treaty requires Italy to eliminate double taxation, the foreign tax credit cannot be denied solely because the taxpayer failed to file an income tax return or to report the...