The presumption of profits allocation to shareholders in limited liability company

The Supreme Tax Court with the decision n. 27049/2019 ruled that the presumption of the pro quota assignment to shareholders of the extra-accounting profits of LTD company that are verified in tax audit, can be applied even if the same shareholders are set up in the form of a company.

The Supreme Tax Court ruled that it won’t be possible to oppose the existence of this type of shareholders (legal entities) in order not to apply the presumption of profit allocation.

The abovementioned decision stated that the presumption of the attribution of extra-accounting profits to the shareholders of a limited company with a narrow social base extends its effectiveness to the further degree when a company participates in the capital company holding the business, so that the whole social structure is still characterized by narrowness.