Do you have several inactive companies? The tax authorities allow you to merge them without paying tax
Many family businesses maintain several companies out of inertia, even though they no longer make sense. Merging them can be a good decision… and what’s more, without paying tax. When business has changed, maintaining several companies only adds costs and complications. The good news is that the tax authorities allow you to simplify without penalty.
Sometimes family businesses become complicated on their own. What started out to protect assets or better organizes the business ends up, over the years, becoming a tangle of companies, duplicate paperwork, and obligations that no longer make sense.
And there comes a time when you ask yourself: why continue to maintain such high costs when everything we do could be under one company?
This was the question asked by a family with two companies, both managed by the same partners. One was dedicated to the rental of industrial warehouses; the other simply had no activity. At the time, they had been separated as a precautionary measure—so as not to carry the risks of one company that guaranteed another—but that reason no longer existed.
So, they decided to go back to square one: merge the two companies and simplify their structure. But before doing so, they wanted to make sure that the merger would not force them to pay taxes on the hidden capital gains of their assets.
And they consulted the tax authorities.
The Directorate General for Taxation (consultation V1503-25, dated August 18, 2025) confirmed that they can benefit from the tax neutrality regime, if there are genuine business reasons, not just a desire to pay less tax.
What does this mean in practice?
When a merger makes economic sense-for example, to reduce administrative costs, improve management, or simplify decision-making-, any capital gains that may arise from combining assets are not considered profits. In other words, the merger is not taxable. The assets retain their tax value and age prior to the transaction.
The tax authorities see no problem when a merger makes business sense. They do not consider it a trick to pay less, but a logical way to bring order to a structure that, over time, has become impractical. Ultimately, the authorities understand that entrepreneurs have the right to organize their businesses in the way that works best for them, provided they do so transparently and without seeking unsustainable tax benefits.
The Supreme Court has also reiterated this on more than one occasion: it is not a question of punishing those who want to be efficient, but of preventing mergers from being used solely as a means of avoiding taxes.
Things to keep in mind
Some business decisions, if prepared well, can save a lot of problems later on. And a merger is one of them. These are the points that require the most care:
- Explain why. It is not enough to say, “we want to simplify.” You must show that the operation makes sense. That improves management, reduces costs, or allows for clearer control of the activity. If you don’t provide evidence of these reasons, the tax authorities may doubt that there is a compelling economic reason.
- Don’t reactivate a dormant company solely for tax purposes. If a company has been inactive for years and suddenly merges without real justification, the risk of inspection increases. It is preferable to do so while both companies are still operating, even if only to a limited extent.
- Show that the absorbing company has a life of its own. It should have employees, income, or assets in operation. “Empty” or purely asset-based companies tend to arouse suspicion. Keeping contracts, accounting, and bank transactions up to date is good protection.
- Take care of the paperwork. The success of a merger depends not only on the substance, but also on the form. It must be correctly registered in the Commercial Register, reflected in the corporate income tax return, and all documentation must be kept. An administrative error can ruin the tax benefit.
- Seek advice before signing up. Not all mergers fit into the tax neutrality regime. Sometimes it is more appropriate to contribute assets or a partial spin-off. Therefore, it is best to study the operation calmly and design it to suit your needs.
If your family business has several companies that no longer add value, it may be time to simplify. Merging them not only streamlines the structure: it reduces costs, improves internal coordination, and frees up resources that are lost in duplicate tasks.
However, it must be done methodically. Good advice can make the difference between a successful transaction and one that ends up creating a tax problem. When planned wisely, a merger ceases to be a risk and becomes an opportunity to better manage the business.
For further information, please consult our Tax Advice.
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