IRAP for associated professional practices: the Constitutional Court dismantles the Tax Authority’s automatic approach

By judgment no. 153/2026, filed on 24 July, the Constitutional Court redefined the scope of IRAP for professionals working within an associated professional practice.

The issue concerns Article 1(8) of Law no. 234/2021, which, as of 2022, exempts individuals carrying on artistic or professional activities from IRAP. Since the provision entered into force, the Italian Revenue Agency has excluded professional associations from this exemption, as stated in Circular no. 4/E/2022, by referring to Article 5(3)(c) of the Italian Income Tax Code (TUIR). That provision treats such associations as equivalent to simple partnerships, which are liable to IRAP under Article 3(2)(c) of Legislative Decree no. 446/1997. Article 2(1) of the same decree provides that their activity “constitutes, in all cases, a taxable basis”. On this basis, the Joint Divisions of the Supreme Court, in judgment no. 7371/2016, held that any assessment of the existence of an autonomous organisational structure was irrelevant.

The Constitutional Court, called upon to rule in a case concerning a notarial practice in Florence, has now rejected this automatic interpretation. It held that equivalence with a simple partnership presupposes that the profession is actually carried on “in associated form”; the mere existence of an associative relationship is not sufficient. Where a professional operates individually, with their own clients and personal responsibility, and the association performs only an organisational function—for example, solely to share common expenses—the activity remains attributable to the individual professional and does not merge with that of the collective entity.

The Constitutional Court also addressed the burden of proof, shifting it in favour of the taxpayer. It is no longer for the professional to prove the absence of an autonomous organisational structure; rather, the tax authorities must demonstrate that the activity is actually carried on in associated form.

In light of the principle established by this judgment, it appears likely that a new wave of refund claims and tax disputes will arise, similar to those previously seen in relation to individual professionals, both before and after the legislative reform.