In its ruling of 1 December 2025, No. 299, the Italian Revenue Agency provided clarification regarding abuse of law in connection with “one-coupon” bonds where there is a timing mismatch between the issuer’s deduction of interest expense and the taxation of interest income for investors.
The Agency held that there is no abusive tax advantage: although the issuer deducts interest on an accrual basis and the investors are taxed on a cash basis, the resulting mismatch does not constitute an undue tax benefit. Since the first condition of Article 10-bis of Law 212/2000 (undue tax advantage) is not met, the anti-abuse analysis does not proceed to the other requirements.
In the case at hand, the company intends to finance major investments through a subordinated, unsecured bond loan with a 15–20-year horizon, offered to shareholders, directors, employees, and third parties.
The bonds are “one coupon” instruments (a single payment at maturity) with a compounded annual rate of up to 16.5%. Tax is withheld upon payment of the interest, while the issuer deducts interest on an accrual basis. This creates the timing mismatch addressed in the ruling.
In this case, the transaction finances strategic investments and the timing mismatch is inherent to “one-coupon” structures. It is not contrary to the fiscal system’s purposes.