In Italy, shell companies or non-operating companies
(“società di comodo” or “società non operative”) are companies that,
over a prolonged period, carry out no operating activity or only very limited activity,
despite owning significant assets (e.g. real estate, shareholdings, financial investments).
The regulation is based on Art. 30 of Law No. 724/1994 and was last amended
as part of the tax reform (Law No. 192/2024 – “Revisione IRPEF/IRES”).
Its purpose is to counter abusive arrangements in which companies are primarily used
as “asset shells” for their shareholders.
Who is affected?
The rules on shell companies generally apply to:
- corporations (Ltd., stock corporations, partnerships limited by shares)
- partnerships (ordinary partnerships, limited partnerships)
-
non-resident companies and entities with a permanent establishment (branch) in Italy
Operational test
Whether a company is considered non-operational is determined by the so-called
operational test:
-
the arithmetic mean of the actual declared revenues, inventory increases and other
ordinary income of the last three years (current year + two preceding years)
-
is compared with the presumed minimum revenues.
Result:
-
if the actual revenues are lower than the presumed minimum revenues, the company
is classified as a shell company or non-operating company;
-
in this case, specific tax consequences apply (minimum taxation, limitations on
loss carryforwards, restrictions on VAT credits).
Calculation of minimum income
Presumed minimum income is determined by applying specific percentages to the
average value of certain asset items, in particular:
- securities, shareholdings and financial receivables
- real estate (including leased properties)
-
other tangible and intangible fixed assets
(e.g. machinery, trademarks)
The average value is calculated on the basis of the current financial year and the two
preceding financial years.
With the tax reform (Law No. 192/2024), the coefficients for minimum income
and minimum revenues were largely halved starting from the 2024 tax period.
The following percentages apply for the calculation of minimum revenues:
- 1% on shareholdings, securities and financial receivables
- 3% on other real estate
- 2.5% on properties in cadastral category A/10 (offices)
-
2% on residential properties acquired or revalued in the current year or in the two
previous years
-
0.5% on properties located in municipalities with fewer than 1,000 inhabitants
- 6% on commercial vessels
-
15% on other fixed assets (e.g. machinery, business equipment)
Tax consequences of a shell company
Direct taxes (IRES/IRPEF) and IRAP
If a company is classified as a shell company (società di comodo), it must:
-
pay tax on a minimum income calculated on a flat-rate basis from its assets,
even if the actual result is lower. The following percentages (also reduced under
the tax reform) apply:
- 0.75% on shareholdings, securities and financial receivables
- 2.38% on other real estate
- 2% on real estate in cadastral category A/10 (offices)
-
1.5% on residential properties acquired or revalued in the current year or in the
two previous years
-
0.45% on properties located in municipalities with fewer than 1,000 inhabitants
- 4.75% on commercial vessels
-
12% on other fixed assets (e.g. machinery, business equipment)
-
as a corporation, pay an additional IRES surcharge of 10.5%
on the minimum income
- determine a minimum taxable base for IRAP
-
offset losses from previous years only against the portion of income exceeding
the minimum income
Value added tax (VAT)
For companies classified as non-operational, VAT credits are subject to significant
restrictions: as a rule, they cannot be refunded or offset horizontally against other
taxes, but only offset against future VAT (vertical offsetting). In cases of prolonged
non-operativity over several years, further limitations on the use of the VAT credit
may also apply.
Exemptions and exclusions
In certain situations, the shell company rules do not apply. Automatic exclusions exist,
among others, for:
- the first financial year
- companies with at least 50 shareholders
-
companies with a consistently high number of employees
(at least 10 employees)
- companies subject to bankruptcy proceedings
-
companies whose total operating performance (item A of the P&L)
exceeds total assets
-
companies with a high tax reliability index (ISA) or that have accepted the
concordato preventivo biennale (CPB)
In addition, grounds for non-application may exist, for example in the case of real estate
leased to public institutions or subject to strict rent controls, certain holding companies,
or companies in an advanced stage of liquidation.
Interpello (application for suspension)
By filing an Interpello, a taxpayer may request the Revenue Agency to
disapply the shell company rules for a specific tax year. However, this option has been
significantly restricted by Law No. 219/2023.