Constitutional Court

In joint practices, IRAP is no longer levied automatically

There is no subordination in relation to the nature of the service. The organisational criterion has been met. The burden of proof lies with the Agency

by Roberto Cordeiro Guerra

11 August 2026

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4' min read

Translated by AI

Versione italiana

4' min read

Translated by AI

Versione italiana

The Constitutional Court, called upon to rule on certain issues regarding a potential conflict between the IRAP legislation on professional associations and Articles 3, 53 and 41 of the Constitution, has issued an interpretative judgment dismissing the case (judgement no. 153 of 2026, published in *Il Sole 24 Ore* on 25 July 2026), established fundamental interpretative guidelines on the matter.

Interpretative options

Firstly, the Constitutional Court has ruled as incorrect the interpretation – also upheld by the Revenue Agency (Circular No. 4/E/2022) – according to which the IRAP regulations, even though it does not expressly mention professional associations amongst taxable entities, would simply treat them as ordinary partnerships (Article 3(2)(c) of Legislative Decree 446/1997), thereby bringing them within the scope of IRAP taxation by the mere fact of their existence.

Secondly, the Court observes that, on the other hand, the wording of Article 5, paragraph 3, of the Tuir requires the existence of a professional association. For a taxable entity distinct and independent from the natural persons comprising it to come into existence, it is in fact necessary for the professional activity to be effectively carried out jointly and therefore in a substantially depersonalised manner. Where, on the other hand, the profession is practised personally, individually and autonomously by the individual members, this circumstance takes precedence over the chosen form of association, so that the activity remains attributable to the individual natural persons who comprise it, who, as such, are exempt from tax pursuant to the provisions of Article 1, paragraph 8, of Legislative Decree 446/1997.

Thirdly, again according to the Constitutional Court, this criterion is also essential for regulating the situation where, within the same association, the professional activity is carried out by the associated professionals partly on an individual basis and partly in an associative capacity. In such cases, income ‘deriving exclusively from the professional work carried out by the individual members’, that is, ‘generated solely by their personal work’, will not be subject to IRAP if it is adequately separated from the income generated by other activities carried out through the professional association’s organisation.

Fourthly and finally, with regard to the burden of proof, given that professional activities are generally carried out on an individual basis and that certain activities are reserved, under the respective professional laws, to the individual professional understood as a natural person, it is incumbent upon the Revenue Agency to demonstrate that professional associations are to be treated as companies, which requires the profession to be actually practised in an associative capacity.

The repercussions

These interpretative options not only enable the Court to dismiss the claims of illegality and unconstitutionality that would otherwise beset the IRAP legislation, but also have significant practical implications for professional associations.

With regard to those notarial firms, which were the specific focus of the questions raised by the referring court, the Constitutional Court explicitly states that they do not constitute a taxable entity distinct from the individual notaries who are members thereof, whose professional activity is, by its very nature, strictly personal. As for the others (solicitors, accountants, engineers, architects), following the same line of reasoning, they may be exempt from the levy not because of the absence of an organisational element – which has in fact become irrelevant – but rather because of the lack of depersonalisation of the professional activity of each member. In this regard, in addition to the practical manner in which the assignments are carried out, the regulations governing the specific profession will carry considerable weight, since – as the Court states verbatim – certain activities are reserved, by the respective professional laws, for the individual professional understood as a natural person. Consider, for example, the law governing the legal profession, according to which, ‘the practice of the legal profession must be based on the autonomy and independence of professional action and intellectual judgement’ (Article 3, paragraph 1); and even where the legal profession is practised in the form of a company, the principle of the personal nature of professional services remains unaffected (Article 4-bis, paragraph 3).

Where these conditions are met, organisations – in addition to not declaring and pay IRAP for the current financial year, they may claim a refund of sums paid in the past, within 48 months of the settlement (pursuant to Article 38 of Presidential Decree 602/1973, referred to in relation to IRAP by Article 25 of Legislative Decree 446/1997, as confirmed by the response to tax ruling No. 186 of 26 September 2024), with the clarification that the burden of proof, whilst resting with the Administration, as affirmed by the Court, whenever it intends to establish the liability for the tax, in the event of a refund it will generally fall on the taxpayer, who is in any case required to provide the grounds for the refund request pursuant to Article 7, paragraph 5-bis, last sentence, of Legislative Decree 546/1992.