Italy Tax Agency Clarifies Tax Treatment of Non-Proportional Distributions to Corporate Shareholders

The Italian Revenue Agency March 31 issued Letter No. 90/2026, clarifying the tax treatment of non-proportional distributions to corporate shareholders. The taxpayers, corporate shareholders of a joint stock company, sought to approve a resolution to distribute profits and reserves in a measure not proportional to their shareholdings, to address one shareholder’s liquidity needs. The taxpayers sought clarification on whether the amounts received qualified as dividends under the Income Tax Law and, therefore, could benefit from the 95 percent corporate income tax (IRES) exemption. Upon review, the Tax Agency clarified that: 1) taxpayers receiving distributions in a higher than proportional amount ...