(Finance) – “The Revenue Agency restricts the scope of application of the tax exemption applicable to transfers of companies or businesses in favor of the family members of the entrepreneur, and does so in an interpretative way, adding a requirement not envisaged by the law” . This is what thelawyer Carlo Cicala, scientific director of “investment trust”, commenting on the response to question number 552/2021 of the Revenue Agencywhich excludes from the benefit of the tax exemption, provided for by the law for generational handover of companies, controlling shareholdings in holding companies that do not in turn have effective control of an operating company. The opinion of the operators and scholars is negative, because in this way the Tax Authority adds, as a matter of practice, a requirement for the exemption from tax that is not provided for by law.
It is known that most of our companies do not stand up to the generational change, also due to divisions between descendants and inherited disputes. What has been done to solve this problem?
“In 2006, the legislator intervened by introducing an important tax exemption (Article 3, paragraph 4-ter, of the Consolidated Law on income taxes): transfers of business or company shareholdings in favor of descendants (therefore children or grandchildren) or of the spouse are not subject to proportional tax on inheritance and gifts, provided that the successors continue the business for at least five years. An additional requirement is required for shareholdings: there is a need for the shareholdings to ensure control of the company (i.e. the majority of votes that can be exercised in the ordinary assembly). This is therefore an important incentive to avoid the fragmentation of the company, also applicable to transfers arranged with family pact and generational trusts. Very often entrepreneurs group together in a holding company equity investments in various operating companies, and it is of course possible to transfer the share capital to the descendants or spouse d she holding, enjoying this benefit. But the Revenue Agency believes that there must be a requirement that the standard does not provide. According to the Agency, in fact, the benefit is not due if the transferred holding is in turn the owner of shareholdings that do not ensure control of an operating company. So, in other words, if the entire shareholding of a holding is transferred, which however contains minority shareholdings in one or more operating companies, the exemption does not apply. This is an interpretation of the Agency that ‘adds’ something that the law does not provide. The art. 3, paragraph 4-ter, of the TUS, in fact, with regard to the transfers of shareholdings, it does not set requirements regarding the activity carried out by the transferred company, nor does it actually require that it actually carries out an activity “.
In its response to the ruling, the Agency supports its reasoning by referring to a recent ruling by the Constitutional Court. Is this therefore a “constitutionally oriented” reading of the provision that provides for the exemption?
“In reality, the sentence of the Constitutional Court (n. 120/2020), mentioned by the Agency, does not seem to provide decisive elements in support of the position of the tax authorities. completely different, and no longer current, which arose when the exemption of art. 3, paragraph 4-ter, of the TUS did not yet provide for the spouse as a possible beneficiary of the tax-free transfer. another set of problems is aimed at, the incident contained in an obiter dictum of the sentence, according to which the facility in question would respond to the “need to guarantee business continuity”, cannot be read as an indication of the need to contain , in the silence of the law, the scope of operation of the exemption only for transfers of shareholdings which, directly or indirectly, ensure control of a company. I would rather say that the decision of the Agency is based on the increasingly widespread tendency to make a (presumed) ‘substance’ prevail over ‘form’, sometimes to the detriment of the legislator’s intentions, not always grasping the valid economic and organizational justifications underlying an operation. And so, in the wake of this ‘transversal’ principle, even if art. 3, paragraph 4-ter expressly requires only the two requirements mentioned above, the Agency requires a third (the effective control of a business activity), as if to limit the ‘abuse’ of the exemption for a use that, according to him, would not reflect the purposes for which it would have been granted by the law “.
What impact will this orientation have on the generational transitions underway?
“Even beyond the case specifically considered, this is a ‘restrictive’ signal which, in my opinion, does not go towards favoring this phenomenon, although it is appreciated and protected by the legislator. Especially at a time when the Agency seems to have finally taken acknowledgment of the fact that the contributions of trust assets (and therefore also the contributions of company shareholdings) do not discount the proportional tax, which will be paid if and when the assets are transferred to a beneficiary, only thereby determining an effective enrichment, and hence the imposition of the tax. The latter result was reached only in August 2021 with a draft circular, made public for consultation and still awaiting the issue of the definitive version, after the jurisprudence of Cassation annulled the claims of the Agency, which believed it was applying the proportional tax on inheritances and donations when the assets were conferred in trust. Taxpayers who did not acquiesce, but decided to challenge the liquidation of this tax, had to wait years before their reasons were recognized in court. Today, therefore, the generational handover that takes place through the equity trust is always exempt from tax in the first phase, that of the transfer of the asset, while as regards the transfer to the final beneficiary, it will always be exempt in the presence of the requisites provided for by the art. 3, paragraph 4-ter, of the TUS, as interpreted by the Agency “.
Do you think that the Agency’s orientation on the issue of generational handover of holding companies can be successfully contested?
“We know that the tax guidelines, contained for example in the circulars and in the responses to a ruling, do not bind the tax judges. There is therefore always the possibility of appealing, up to the Supreme Court, to see a principle affirmed even opposite to the one expressed. from the acts of the Administration. However, it is probable that operators will spontaneously comply with the guidelines of the Agency to avoid disputes. Let’s take a practical example: the entrepreneur confers his (controlling) stakes in the family holding company to a generational trust so that they are managed by the trustee, collecting the dividends, and then transferring them to one of the descendants when the latter turns 25. We know that the contribution of the shares in the trust is in any case exempt from indirect tax. , the problem arises of verifying whether the holding, in turn, also contains co Check it or not. It is highly probable that the practical operator, instead of “challenging” the Agency’s orientation in a judgment, will spontaneously comply with it to avoid disputes. So here is a case in which fiscal practice has a practical effect comparable to that of the law “.