Taxation of Proceeds from Unlawful Activities: Commentary on Ordinance No. 307 of 2025

Recently, Ordinance No. 307 of January 8, 2025, has attracted interest in the field of tax law, particularly regarding the taxation of proceeds derived from unlawful activities. The Court has established important principles concerning the tax period and the identification criteria for taxation. This article aims to clarify the content of the ruling, making it accessible even to those who are not experts in the field.

Context of the Ruling

In the Ordinance under review, the appellant M. (M. C.) contested the decision of the Regional Tax Commission of Venice, which had rejected his appeal. The central issue concerned the imputation of income derived from unlawful activities for the purposes of Personal Income Tax (I.R.P.E.F.). The Court, presided over by M. C., confirmed that the tax period to which such income should be imputed must be identified based on the moment the taxpayer acquires availability of it.

The Ruling's Maxim

Proceeds from unlawful activities - Taxation - Tax period - Identification - Criteria. In matters of IRPEF, the tax period to which income, consisting of proceeds from unlawful activities, should be imputed is identified by referring to the moment when availability of such proceeds is acquired, coinciding with the realization of the tax presupposition established by art. 1 of Presidential Decree No. 917 of 1986.

This maxim highlights a fundamental principle: proceeds derived from unlawful activities are not exempt from taxation. The Court emphasizes that taxation must occur at the moment the taxpayer has economic availability of the proceeds, not when they are realized. This approach is based on current legislation, particularly Article 1 of Presidential Decree No. 917 of 1986, which establishes the criteria for income taxation.

Practical Implications of the Ruling

The practical consequences of this Ordinance are manifold and deserve attention. Here are some key points:

• Unlawful proceeds must be declared and taxed like any other income.
• The moment of taxation is linked to availability, which implies that the taxpayer must be aware of their tax situation.
• The ruling reiterates the importance of correct tax planning, even in sensitive contexts such as that of unlawful proceeds.

In summary, Ordinance No. 307 of 2025 clarifies that the Financial Administration has the right to tax proceeds derived from unlawful activities, emphasizing the importance of responsible and informed tax management.

Conclusions

In conclusion, Ordinance No. 307 of 2025 represents an important step in Italian tax jurisprudence. It clarifies that proceeds derived from unlawful activities cannot be considered exempt from taxation and establishes clear criteria for income imputation. This sends a strong message to all taxpayers: tax responsibility cannot be ignored, regardless of the nature of the income.