Ruling 199/2026: demerger and step-up of reserves

In brief: with ruling No. 199 of 3 November 2026 the Italian Revenue Agency confirms that a limited partnership (società in accomandita semplice) formed by a partial proportional demerger of an srl may access the extraordinary step-up under art. 14 of Legislative Decree (d.lgs.) No. 192 of 2024 for revaluation reserves subject to tax suspension rebuilt in its 2024 financial statements. The omitted payment of the substitute tax can be remedied through voluntary correction, with tax code 1867.

What does ruling 199/2026 say?

The applicant is a company keeping ordinary accounts, set up in December 2024 as the beneficiary of a partial proportional demerger, which received revaluation reserves (Law No. 448/2001, Decree-Law (d.l.) No. 185/2008 and Decree-Law No. 104/2020). It had already indicated the step-up in its 2024 income tax return, but had not paid the first instalment of the substitute tax, pending the ruling. The Agency, on the basis of the facts set out by the applicant and taken as given “uncritically”, answers on three points.

• Reconstitution of reserves: once the surveillance period of the respective revaluation laws has expired (for the most recent one, that of Decree-Law No. 104/2020, which ended on 31 December 2023), the reserves are reconstituted in proportion to the book net equity attributed to the beneficiary, according to the general criterion of art. 173, para. 9, first sentence, of the TUIR.
• Access to the step-up: since the reserves are present both in the 2023 financial statements of the demerged company and in the 2024 financial statements of the applicant, they meet the requirement of art. 14, para. 1, of Legislative Decree No. 192 of 2024.
• Tax treatment: since the beneficiary is a partnership formed as a result of a demerger involving a homogeneous regressive transformation (trasformazione omogenea regressiva), arts. 5 and 6 of the Ministerial Decree (DM) of 27 June 2025 apply; the stepped-up reserves are considered formed at the level of the beneficiary, and their distribution to shareholders is not taxed a second time, but it reduces the tax cost of the shareholdings.

The Agency specifies that, if the beneficiary's net equity includes profit reserves set aside before the transformation, the presumption under art. 47, para. 1, of the TUIR still applies to those reserves if they are distributed to shareholders. The opinion does not address the civil-law correctness of the transaction or any possible abuse of law.

How is the omitted payment remedied?

According to the ruling, the option is perfected upon its indication in the 2024 income tax return, and the omitted or insufficient payment does not affect its perfection. The applicant can therefore correct the omitted payment with tax code 1867 (established by Resolution No. 35/E of 4 June 2025), paying the penalty under art. 13 of Legislative Decree No. 471 of 1997, with the reductions under art. 13 of Legislative Decree No. 472 of 1997, if there are no other preclusive elements.

What to do in the office, client by client

• Identify clients with demerger or transformation transactions in 2024 and revaluation reserves subject to tax suspension.
• Check the 2024 return: the option for the step-up must appear in the form, with the reserves and the substitute tax.
• Verify the payments of the four instalments of the substitute tax and, if the first one is missing, consider voluntary correction.
• Distinguish reserves of profits earned before the transformation, to which the presumption under art. 47 of the TUIR still applies.

Advice on extraordinary transactions such as this is a service that goes through the client's anti-money laundering due diligence, and tax advice carries its own risk level under the CNDCEC Technical Rules (Regole tecniche CNDCEC). With the free due diligence checklist using the CNDCEC Technical Rules method you set up the client file before assisting them.

Sources

• Agenzia delle Entrate, ruling No. 199/2026, “Corporate demerger – homogeneous regressive transformation – reserves subject to tax suspension – extraordinary step-up under art. 14 of Legislative Decree No. 192 of 2024 – payment of the substitute tax”, accessed 5/11/2026