Italy: Company effectively managed in Italy and thus subject to Italian corporate income tax (Supreme Court decision)
Effective place of management corresponds to the location where the company’s strategic and administrative decisions are actually taken and implemented.
The Supreme Court on June 11, 2026, held (Court of Cassation, Order No. 19092/2026) that a Slovakia-incorporated company was effectively managed from Italy and thus subject to Italian corporate income tax (IRES).
The court confirmed that, under Article 73(3) of the Italian Income Tax Code, the effective place of management corresponds to the location where the company’s strategic and administrative decisions are actually taken and implemented. The court agreed that the Slovak company’s effective management was located in Italy based on the Italian residence of the directors, the absence of management activity in Slovakia, invoices prepared in Italy and issued to a related Italian company, contracts drafted in Italy, and evidence that the company had been established in Slovakia primarily because operating through an Italian entity would have been more costly.
Read a July 2026 report prepared by KPMG’s EU Tax Centre