Entertainment tax and the presumption of revenue: clarification by the Court of Cassation in Order no. 28909/2025

In the landscape of Italian tax law, the boundary between the possession of an asset and the generation of actual income is often the subject of complex litigation. A particularly sensitive issue concerns the gaming and entertainment sector, where the management of amusement machines is subject to specific tax regimes. Recently, the Court of Cassation intervened with Order no. 28909 of 02/11/2025 to clarify the relationship between the Entertainment Tax (ISI) and the assessment of alleged undeclared revenue, overturning interpretations that excessively penalized the taxpayer.

The lump-sum nature of the Entertainment Tax

The case analyzed by the Supreme Court involves the taxpayer P. R. against the State Attorney General's Office. At the heart of the dispute is the very nature of the ISI, governed by Presidential Decree (D.P.R.) no. 640 of 1972. This tax is not calculated on the actual receipts generated by each individual game or use, but is instead determined on a lump-sum basis according to the type and number of machines owned by the operator. In other words, the tax is due simply because the machine is present and potentially usable, regardless of whether customers actually use it.

The judges of legitimacy emphasized that this very characteristic makes the ISI a tax 'disconnected' from actual profitability. To better understand the scope of this decision, it is necessary to analyze some key points:

• The ISI is due even in the absence of actual receipts.
• The calculation is based on standard parameters established by law (number and type of machines).
• The payment of the tax does not attest to the actual receipt of money by the operator.

The limit of simple presumptions in tax law

The most relevant aspect of the order concerns the application of Article 2729 of the Civil Code. The Tax Administration often attempts to infer an 'unknown fact' (actual revenue) starting from a 'known fact' (payment of the ISI tax). However, the Court of Cassation has clarified that this automatism is not legally sustainable. In order to establish a legal presumption, the evidence must be serious, precise, and consistent.

The Entertainment Tax (ISI) is a lump-sum tax determined on the basis of the number and type of entertainment machines owned, which is independent of the actual profitability of the latter, being due even in the absence of use or receipts, with the consequence that the relative payment cannot in itself constitute a serious, precise, and consistent presumption of the existence of revenue, pursuant to Art. 2729 of the Civil Code, as the requirement of a direct correlation between the known fact (payment of the tax) and the unknown fact (the actual receipt of revenue) is lacking.

Commenting on this principle, it emerges clearly how the Court intends to protect the taxpayer from assessments based on mere theoretical calculations that do not take into account economic reality. If the tax is due regardless of profit, its payment cannot be proof that a profit has been made.

Conclusions on the scope of the ruling

Order no. 28909/2025 represents an important precedent for all operators in the gaming and entertainment sector. It reaffirms the principle that the burden of proof on the Tax Authority cannot be satisfied through simple automatisms when dealing with lump-sum taxes. For operators, this means that the Revenue Agency (Agenzia delle Entrate) will no longer be able to demand higher income taxes based exclusively on the number of machines installed and the relative ISI paid, but must instead seek concrete and direct evidence of the actual wealth produced.