Inheritance Tax: Exemption for Third Sector Entities and Joint Liability - Civil Cassation, Order No. 15743/2025

Tax law and inheritance law intersect in a complex field, especially when it comes to tax benefits for entities with social purposes. A recent ruling by the Court of Cassation, Order No. 15743 of June 12, 2025, has provided fundamental clarification regarding the joint liability of Third Sector Entities (ETS) within the scope of inheritance tax. This decision offers greater legal certainty and strengthens the protection of the mission of ETS, whose work is of vital importance to the community.

Regulatory Context and Dispute

The discipline of inheritance tax, governed by Legislative Decree No. 346 of 1990, provides for specific exemptions for Third Sector Entities in Article 3, paragraph 1. These benefits have been reiterated and strengthened by the Third Sector Code (Legislative Decree No. 117 of 2017), particularly by Articles 82, paragraph 2, and 89, paragraph 7, aimed at supporting activities of general interest.

Concurrently, Article 36, paragraph 1, of Legislative Decree No. 346/1990 establishes the joint liability of heirs for the payment of the tax due on the entire inherited estate. The crucial issue raised before the Court of Cassation concerned the applicability of this joint liability to ETS which, despite being heirs, benefit from a specific exemption. The dispute saw the State Attorney General's Office (A.) opposing the private party (D.) regarding a decision by the Regional Tax Commission of Rome of February 22, 2023.

Cassation Order No. 15743/2025: The Ruling and Its Significance

The Supreme Court, with Order No. 15743/2025, provided a clear and decisive answer, establishing a fundamental principle for the protection of ETS. The ruling is summarized below:

In matters of inheritance tax, a third sector entity, as an heir benefiting from the exemption provided by Article 3, paragraph 1, of Legislative Decree No. 346 of 1990 (confirmed by Article 89, paragraph 7, of Legislative Decree No. 117 of 2017 and renewed by Article 82, paragraph 2, of the same Legislative Decree), is not subject to joint liability for the tax due by other heirs or legatees pursuant to Article 36, paragraph 1, of Legislative Decree No. 346 of 1990, as this would otherwise frustrate the legislative purpose of excluding its passive subject status, for any reason, from the tax obligation.

The Court thus clarified that an ETS, even if an heir, cannot be held jointly liable for the tax due by other co-heirs or legatees when the entity itself enjoys a specific exemption. The reasoning lies in the need to preserve the ratio legis: if the entity is excluded from passive subject status for the tax obligation, imposing joint liability would nullify the benefit of the exemption, betraying the legislator's intent to support the Third Sector.

Practical Implications of the Decision

This ruling has significant practical implications:

• Legal Certainty for ETS: Greater tax clarity for Third Sector Entities.
• Protection of Social Mission: The exemption allows ETS to fully dedicate inherited resources to their statutory purposes.
• Heirs' Liability: Other heirs or legatees will bear their share of the tax.

The interpretation by the Court of Cassation is consistent with the principle of proportionality and the intention to incentivize the Third Sector, recognizing its public value.

Conclusions

Order No. 15743 of 2025 by the Court of Cassation is a landmark decision for inheritance tax and the Third Sector. By recognizing that exemption from passive subject status also implies exclusion from joint liability, the Supreme Court protects the coherence of the regulatory system and the interests of ETS, ensuring the effectiveness of tax benefits. For entities and those who support them, this ruling offers greater clarity and legal security, crucial for estate planning and the sustainability of social activities.