Italian Supreme Court Order No. 23218/2026 provides an opportunity to examine the tax treatment of liabilities assumed as part of a business acquisition and subsequently written off, and, more broadly, the circumstances in which the extinguishment of a liability gives rise to taxable income under Article 88 of the TUIR. While confirming taxation in the case at hand, the ruling raises the broader question of whether a liability written off from the balance sheet should give rise to taxable income in all cases or only where the underlying item previously affected taxable income.
Published in La Circolare Tributaria no. 32/2026 by Euroconference.
