Tax assessment in closely-held companies: new evidentiary criteria from the Supreme Court

1. The fact

   The case brought to the attention of the Supreme Court originates from a series of tax audits conducted on a small limited liability company, consisting of only three shareholders linked by family ties. According to reports from FiscoOggi and NT+ Fisco in October 2026, the Tax Agency found unrecorded revenues amounting to several hundred thousand euros. Based on established case law, the Office proceeded to assess the corresponding capital income against the shareholders, presuming that the off-book profits had been distributed proportionally among them.

   The shareholders challenged the assessment notices, arguing that the Office had not provided concrete evidence of actual receipt of the funds, relying solely on an automatic assumption based on the closely-held nature of the company. After the assessment was upheld in the first and second instances, the case reached the Supreme Court. The legitimacy ruling arrives at a crucial moment, as it interprets the impact of the 2026 Omnibus Decree on pending assessment procedures and the new standards of proof required of the financial administration.

2. 

   The rules at play

   The regulatory framework is centered on four fundamental pillars governing taxation power and income tax.

   1. Article 23 of Legislative Decree 148/2026 (Omnibus Decree) is the reference rule that codified the presumption of distribution, limiting it to cases of undeclared positive components or non-existent costs.
   2. Article 39 of Presidential Decree 600/1973 governs analytical-inductive assessment, allowing the Office to infer unknown facts through presumptions that must necessarily be grave, precise, and consistent.
   3. Articles 47 and 59 of the TUIR regulate the taxation of dividends for the shareholder, defining the nature of the contested income.
   4. Article 2729 of the Civil Code establishes the general requirements for simple presumptions, which remain the evaluation parameter for the trial judge in weighing the evidence collected by the Tax Agency.

3. What the case law says

   Legitimacy jurisprudence has undergone a major evolution, moving from an approach heavily weighted in favor of the Tax Authority to a more protective perspective for taxpayers. For years, courts supported the thesis that, given the natural complicity among a few shareholders, proof of corporate off-book funds constituted per se proof of their distribution. However, with the 2026 guidelines, the Court clarified that this automatic mechanism must be mitigated by evaluating the actual conduct of the shareholders. The presumption is no longer considered absolute but iuris tantum, meaning it admits contrary evidence. The magistrates highlighted that the Office cannot merely cite the closely-held nature of the company, but must provide elements that make the withdrawal of profits by the shareholder the only logical and consistent explanation of the facts, respecting the more probable than not standard.

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8. What it teaches professionals

   1. Analysis of the corporate structure: it is essential to evaluate the actual distribution of powers among shareholders to demonstrate the possible exclusion of some of them from illicit financial flows.
   2. Defensive strategy: mere denial of facts is insufficient; positive facts incompatible with distribution, such as retention in reserves or corporate reinvestment, must be proven.
   3. Monitoring of internal company relationships: documenting any disputes or lack of participation in shareholder meetings can prove decisive in challenging the evidentiary standard required of the Office.

References: Art. 23 D.Lgs. 7 agosto 2026, n. 148Art. 39 D.P.R. 600/1973Art. 47 D.P.R. 917/1986Art. 2729 Codice Civile

Editorial oversight: Avv. Federico Papa·ICAMUpdated 27 October 2026Content drafted with AI support and subject to editorial source checks. Despite these controls, inaccuracies may remain: reports and rectification requests are welcome. Report a correction