Tax Penalties: Liability Between Company and Director in Ruling 16454/2025

In the complex landscape of tax law, the issue of liability for tax penalties is a crucial point, especially when distinguishing between a corporate entity and the individuals managing it. The recent ruling by the Court of Cassation, Ruling No. 16454 of 18/06/2025, addresses this debate, offering fundamental clarifications on the limits and conditions under which penalties can be attributed to the director or, conversely, fall solely on the company. This decision, which saw the State Attorney General's Office (A.) and F. in opposition, rejecting the decision of the Regional Tax Commission of Bologna of 03/05/2016, is of extreme importance for all operators in the sector, from entrepreneurs to professionals.

The Principle of the Entity's Exclusive Liability

The ruling in question reiterates a cornerstone principle of our tax system: in the presence of a capital company or an entity with legal personality, liability for tax penalties rests exclusively with the entity itself. This means that, as a general rule, it is the company that must answer for tax violations committed, not the individuals who represent or manage it. This principle finds its legal basis in Article 7 of Legislative Decree No. 269 of 2003, converted with amendments by Law No. 326 of 2003. The underlying rationale is clear: the tax relationship is established with the entity, which is the legal subject to whom the benefit derived from economic activity is attributable and, consequently, also the burden of penalties in case of non-compliance.

However, as often happens in law, every rule has exceptions. And it is precisely on these exceptions that the Court of Cassation has sought to provide clarity, outlining the boundaries within which an individual can be held liable.

When the Director is Personally Liable: The Fictitious Veil

Ruling No. 16454/2025 does not merely reaffirm the general principle but focuses on the cases where this principle is not upheld. The liability of the director (or, more generally, the "intraneus," meaning anyone operating within the entity) arises when the capital company or entity does not constitute an autonomous and substantial legal reality, but a "mere veil" or a "fictitious entity."

What is meant by "fictitious veil"? This refers to situations where the entity is used as a mere instrument for the director's personal purposes, evading tax regulations. In these cases, the company loses its substantial autonomy and becomes a mere interposed subject, a sort of alter ego of the individual who unduly benefits from it. Jurisprudence has long dealt with similar situations, such as the Cassation with ruling No. 9448 of 2020, which had already highlighted the need to assess the substantiality of the entity.

Here are the key points to understand when a "mere veil" is established:

• The entity does not have its own effective economic operation.
• Decisions and operations are dictated exclusively by the director's personal interests.
• The entity is instrumental to tax evasion or other illicit conduct by the intraneus.
• There is a lack of real separation between the entity's assets and those of the individual.

Only in these specific circumstances can the tax penalty be attributed to the intraneus as complicity, pursuant to Article 9 of Legislative Decree No. 472 of 1997, which governs joint liability for administrative penalties.

In the case of a capital company or an entity with legal personality that does not constitute a mere veil and therefore a fictitious entity, or that is not otherwise used as a mere interposed subject by the director and in general by the intraneus for their own purposes, tax penalties must be imposed exclusively on the company or entity to which the tax relationship and therefore the related benefit are attributable, based on the provisions of art. 7 of d.l. no. 269 of 2003, converted with amendments by l. no. 32 of 2003, thus excluding any imputation of the penalty as complicity to the intraneus pursuant to art. 9 of d.lgs. no. 472 of 1997.

This maxim from ruling 16454/2025 is illuminating. It tells us that, as long as the company is a real entity, with its own life and purpose, the liability for penalties belongs to it. But if the director (or any internal figure, the "intraneus") uses the company as a mere puppet for their personal affairs, perhaps to hide income or evade taxes, then it is they who must answer for it, in complicity with the company itself. The Court emphasizes the importance of verifying the genuineness of the entity, distinguishing between lawful business management, even if with errors, and an abuse of the corporate form for illicit purposes. It is a subtle but fundamental distinction that protects the proper function of legal personality.

Reference Regulatory Framework

The Court's decision is based on a careful interpretation of two regulatory pillars:

• Article 7 of Legislative Decree No. 269 of 2003 (converted with amendments by Law No. 326 of 2003): This provision establishes the general principle of attributing tax penalties to the entity, recognizing its patrimonial and legal autonomy.
• Article 9 of Legislative Decree No. 472 of 1997: This provision governs joint liability for administrative penalties and is invoked when the condition of a "mere veil" occurs. It allows for extending liability to the individual who participated in the violation.

It is crucial to note how the ruling connects these two norms, highlighting that Article 9 does not nullify the general principle of Article 7 but integrates it, providing a safeguard for cases of abuse of legal personality. This harmonization is fundamental to ensuring both legal certainty and the effectiveness of violation repression.

Conclusions and Practical Implications

Ruling No. 16454/2025 offers a valuable compass for navigating the delicate balance between the liability of the entity and that of the director regarding tax penalties. The dividing line is clear: as long as the company acts as an autonomous legal subject and not as a mere instrument in the hands of the director for personal purposes, the penalties fall on it. Only when the entity transforms into a "fictitious veil," losing its actual autonomy, can liability extend to the individual.

For directors, this means the need for transparent and lawful management, avoiding any instrumental use of the company. For companies, the ruling reiterates the importance of maintaining a clear distinction between corporate assets and interests and those of the directors personally. In an economic context increasingly focused on tax compliance, a thorough understanding of these principles is essential to prevent litigation and protect one's position.

This law firm is available for further clarification and specific consultations on these complex issues, supporting businesses and professionals in the correct management of tax liabilities.