Italy Tax Agency Clarifies Abusiveness of Corporate Reorganizations

The Italian Revenue Agency Feb. 18 issued Letter No. 42/2026, clarifying abusiveness of corporate reorganizations. The taxpayers, a father and his two sons, owned all shares in two companies and planned to transfer them under the controlled realization regime to a holding company subject to the ordinary tax regime. The father would then donate the bare ownership of his non-controlling holding company shares to the sons. The taxpayers inquired whether the reorganization would be abusive. Upon review, the Tax Agency clarified that: 1) the conditions for finding abuse are an undue tax advantage, lack of economic substance, and the nature ...