Observatory › Business and companies › Static holding companies and retained dividends: the line between a lawful choice and abuse

Static holding companies and retained dividends: the line between a lawful choice and abuse

Deferring tax on dividends at the level of the holding company is inherent in the system so long as it is temporary: the risk arises when profits sit there sine die, with no investment plan behind them.

Tax audits over recent months have put the spotlight on “static” holding companies, those that keep within themselves the profits received from the trading companies without either reinvesting them or distributing them to the shareholders.

Where the advantage comes from

When the dividend moves up from the trading company to the holding company, the effective charge is 1.2% (IRES at 24% on a taxable base of 5%, art. 89 TUIR), against the 26% withholding that an individual shareholder would have borne. This deferral is regarded as inherent in the system — and therefore lawful — so long as it remains temporary; where profits are instead retained over the medium to long term, the postponement of IRPEF risks becoming indefinite and amounting to abuse under art. 10-bis of L. 212/2000. The MEF policy statement of 27 February 2025 expressly counts deferrals of taxation among tax advantages, provided they are indefinite or significantly postponed rather than merely temporary.

What the tax authorities are challenging

In the audits currently under way the deferral is being challenged even for dividends passed to the holding company in very recent years (2024-2026), in respect of which, by definition, no period has yet elapsed that could characterise the postponement as anything other than temporary. Auditors may also take issue with the placing of the cash in financial instruments that the individual shareholder could have subscribed directly.

The arguments for the defence

Not even the sternest analyses have ever asserted that a holding company is forbidden to retain a dividend, nor is there any duty to redistribute it immediately to the shareholder: no provision of Italian law supports such a constraint. On the contrary, the holding company is an arrangement the system positively encourages — consider the controlled-realisation contribution under art. 177(2) and (2-bis) TUIR — precisely in order to rationalise investment and keep capital within the business tax regime. It is entirely normal for funds to sit temporarily “parked” in a securities account pending an investment consistent with the group’s strategy; distributing profits remains the natural destination contemplated by the company contract (art. 2247 of the civil code), but with no requirement of immediacy.

How to prepare

Given the restrictive stance emerging from audit practice, when new holding companies are set up it is advisable to spell out in the corporate documents the non-tax purposes of the arrangement (less conflictual management of the trading company, separation of ownership from management, asset protection and generational succession) and to back the retention of profits with a documented investment strategy. The firm advises shareholders and family groups on assessing the risk profile and on assembling the supporting documentation.

• Art. 10-bis, L. 212/2000 – the rules on abuse of law.
• MEF policy statement of 27 February 2025 – tax advantages and deferrals of taxation.
• Arts. 89 and 177(2) and (2-bis) TUIR; art. 2247 of the Italian civil code.
• Commentary: G. Infranca – P. Semeraro, “Il Punto”, Eutekne, 25 July 2026.