Ruling No. 42/2026 of the Italian Revenue Agency provides clarification of great significance for corporate and estate planning transactions that combine the contribution of shareholdings pursuant to Article 177, paragraph 2, of the TUIR with the subsequent gift of the holding company’s shares. The Administration acknowledges that the sequence “tax-neutral contribution + gift” results in an undue tax saving, but at the same time does not constitute an abuse of law where the transaction is supported – as in the case at hand – by genuine economic substance.
The case
Two brothers, each holding 50% of company ALFA and 26.5% of company BETA together with their father (who holds 48.2%), intend to implement a corporate reorganisation structured in two phases:
Contribution pursuant to Article 177, paragraph 2, of the TUIR of all shareholdings in ALFA and BETA into a newly incorporated holding company, carried out jointly by the two brothers and their father;
Gift, by the father to his sons, of the shares held in the newco holding, to be executed after the approval of the first financial statements.
In the absence of the requirements for the application of the exemption under Article 3, paragraph 4-ter, of the TUS to the gift (due to the lack of the requirement of transfer/integration of control), the gift of shareholdings remains subject to the ordinary tax regime pursuant to Article 16, paragraph 1, letter b), of the TUS. Under this provision, for the purposes of determining the taxable base to which gift tax applies, reference must be made to the “net equity of the entity or company resulting from the latest approved or certified financial statements, taking into account subsequent changes.”
The combination “tax-neutral contribution + gift” generates a significant tax saving. In fact, under the tax-neutral regime, the shares received by the contributor are valued based on the corresponding portion of net equity created by the receiving company as a result of the contribution (rather than at fair market value). In this way, with a view to the subsequent gift, the net equity of the newco holding is predetermined by the tax basis of the contributed shareholdings, resulting in a lower gift tax compared to the direct gift of the shareholdings in ALFA and BETA.
The Italian Revenue Agency defines such tax saving as undue, since “Such transaction results in a tax saving that is contrary to the simplification and objective determination criteria underlying the calculation of the taxable base pursuant to Article 16, letter b), of the TUSD.”
Despite the undue tax saving, the Italian Revenue Agency excludes that the transaction is abusive. Article 10-bis of the Taxpayers’ Statute requires the concurrent presence of three elements: undue tax advantage, lack of economic substance and essential nature of the advantage. In the present case, according to the Italian Revenue Agency, the sequence of transactions displays economic substance: the holding company is structured to ensure unified group management, rationalise treasury management, prevent shareholder conflicts through specific by-law provisions (such as a deadlock clause) and support a gradual generational transition.
Although generating an undue tax advantage, therefore, the overall structure of the transaction is justified by concrete organisational and managerial reasons. For this reason, Ruling No. 42/2026 reiterates an important operational principle: the existence of valid organisational and managerial reasons is sufficient to prevent a finding of abuse of law, even where the transaction results in a tax saving that the Revenue Agency considers inconsistent with the purpose of the rules.
