Waiver of credits taxed by the partners
The Court of Cassation, with sentence no. 2057 filed on 30 January 2020, ruling on the case of a foundation that had waived in 2009 the receivable relating to interest accrued on loans granted to an investee company, returned to the issue of the tax treatment to which shareholders’ receivables should be subject in the event of waiver, confirming the argument of the so-called “legal collection”.
This long-standing issue stems from the argument put forward by the tax authorities in Ministerial Decree no. 73 of 1994, subsequently confirmed by the Tax Revenue Office in Resolution no. 124/2017, according to which the waiver of receivables related to income that must be acquired for cash taxation (such as, for example, the remuneration due to directors and interest on shareholder loans) presupposes that the receivable has been legally collected and therefore the obligation to tax its amount, also by applying withholding tax.It should be noted that the Court of Cassation ruled on a tax period in which Article 88 paragraph 4 of the TUIR was applied, as it resulted before the amendments introduced by Legislative Decree 147/2015, according to which the waiver of the credit for the shareholder does not constitute a contingent asset.
The Supreme Court of Cassation, confirming the orientation already expressed in sentence no. 26842/2014, stated that the waiver of the credit by a shareholder is an expression of the desire to capitalize the company and as such presupposes the achievement of the credit, the amount of which, even if not materially collected, is still “used”, albeit by a deed of disposition having the nature of a waiver Otherwise, by operating, the company would be allowed to benefit from provisions deducted for tax purposes during the individual tax periods which are not subject to any taxation, despite the fact that they have the ultimate effect of increasing the cost of the equity investment and therefore generate income.It should be remembered that from the tax period after October 7, 2015, in accordance with Art. 88 paragraph 4-bis TUIR, the shareholders’ waiver of receivables is considered as a contingent asset for the portion exceeding the related tax value that the shareholder is required to certify, for the benefit of the investee company, by producing a special declaration in lieu of a notarial deed.
In the absence of such deed, the tax value of the receivable is assumed to be zero, with a consequent contribution to the formation of the company’s income, of the amount of the entire waiver.
