Omnibus Decree: what changes for tax assessments

The corrective Omnibus Decree (Legislative Decree No. 148 of 7 August 2026, effective from 12 August 2026) has addressed certain regulatory gaps concerning tax assessment activities that have so far been the subject of doctrinal and case-law debate. Specifically, it concerns: the time limits for challenging multi-year costs, the presumption of off-the-books profits in closely held companies, and audits based on the non-economic nature of transactions.

1. Multi-year items: when does the time limit start running? (Article 22)

For negative business income components with multi-year effects — i.e. items whose tax deduction is spread over several subsequent financial years — the new paragraph 1-bis of Article 43 of Presidential Decree No. 600/1973 introduces a general rule: the limitation period starts from the first year in which a portion of the component was deducted, and all subsequent portions must be assessed within that single time window, which begins with the first deduction.

This general rule is accompanied by two clarifications: it applies only to businesses (not to self-employed professionals, for whom only the existing case law remains applicable), and it does not apply to fictitious transactions, which may be challenged directly in subsequent years without constraints linked to the first year of deduction.

The safeguard clause: the provision therefore establishes that, if the Tax Authority serves a tax assessment notice before the expiry of the limitation period calculated from the first year of deduction, for the current year, the previous year, and subsequent years, the ordinary five-year assessment period applies again. Conversely, if the assessment is issued after the expiry of the deadline relating to the first year of deduction, the Tax Authority loses its power to assess the components deducted in subsequent years, even if those years are still within the ordinary assessment periods.

Further clarification: the obligation to assess the multi-year expense within the deadline of the first year of deduction applies only where the defect is original (i.e. identifiable already at the time the asset was acquired or the expense was incurred). If the defect is subsequent, meaning that it arises at a later stage, this restriction does not apply and the Tax Authority may directly assess the year in which the defect becomes apparent.

Effective date: the reform applies to assets and expenses incurred during tax periods ongoing as of 31 December 2027. For previous periods, the former rules remain applicable until the related tax effects have been exhausted.

Excluded items: the provision concerns only negative components with “multi-year effects” in the strict technical sense, deducted according to a predetermined allocation schedule. Items that do not fall within this definition, such as the carry-forward of tax losses, should remain outside the scope of the new rule and continue to follow the principles developed by case law, which emphasise the independence of each tax period. However, it should be noted that sector sources do not all address this issue with the same degree of clarity, and further confirmation will be needed through doctrinal interpretations and administrative practice.

2.      Off-the-books profits in closely held companies (Article 23)

In closely held companies, where the Tax Authority identifies unrecorded profits at company level, it has often automatically presumed that such profits were distributed pro rata to the shareholders, shifting the burden of proof onto them. This presumption, which has been consistently upheld by case law, has now been incorporated into legislation as a rebuttable legal presumption, but with a narrower scope: it applies only where the Tax Authority proves, through certain and specific evidence, unrecorded and undeclared revenues or non-deductible costs arising from fictitious transactions.

It can no longer apply, however, where the increase in taxable income derives from costs that were actually incurred but challenged due to lack of business relevance, lack of proper accrual, or quantitative limits on deductibility. Furthermore, the presumption would appear not to apply where the company remains in a tax loss position even after the adjustment.

Where the presumption applies, the taxation of the profits attributed to shareholders now follows the ordinary dividend taxation rules: partial exemption for entrepreneur shareholders and a 26% withholding tax for individuals who are not entrepreneurs, thereby overcoming the approach that, in certain cases, subjected such individuals to full personal income tax (IRPEF).

Effective date: no explicit effective date is provided; as a precautionary approach, the rule is considered applicable to assessment notices issued from 12 August 2026 onwards.

3.      Tax assessments based on the non-economic nature of transactions (Article 24)

Where the price of a transaction differs from market value, case law has long distinguished between a limited deviation (a simple presumption, insufficient on its own) and a clear and substantial deviation (a qualified presumption, sufficient on its own to support an assessment). Article 24 has incorporated this two-tier approach into legislation, solely for income taxes and IRAP purposes: as a general rule, the deviation remains a simple presumption and must be supported by the Revenue Agency with further serious, precise, and consistent circumstantial evidence; where the discrepancy is clear and significant, it is, instead, sufficient in itself to justify the assessment.

The provision does not apply to VAT, for which EU principles continue to apply, potentially creating a dual regime between income taxes/IRAP and VAT.

Effective date: no explicit effective date is provided; as a precautionary approach, it is considered applicable to assessment notices issued from 12 August 2026 onwards.

4.      ConclusionMore predictable time limits, narrower presumptions, and a clearer framework for non-economic transactions: the Omnibus Decree does not introduce entirely new concepts, but rather seeks to bring order to areas where case law had previously played the predominant role, repeatedly shifting the balance between the powers of the Tax Authority and taxpayers’ safeguards.

However, it will be necessary to await the first practical applications in tax assessment activities carried out by the Revenue Agency, as well as future judicial interpretations, in order to assess the actual effectiveness of the amendments introduced.

Tax & Legal Research Hub

Centro Studi e Pianificazione Fiscale

Responsabile

Dott. Valerio Locatelli

Coordinatore

Dott. Giancarlo Marengo