In recent years, the structuring of professional activities has seen a significant evolution with the rise of Società tra Professionisti (STP), or Professional Associations, in Italy and other civil law jurisdictions. These structures allow professionals—such as lawyers, accountants, engineers, and doctors—to collaborate under a corporate form while maintaining compliance with regulatory and ethical obligations.
A critical issue for professionals transitioning their individual practices into an STP is the tax treatment of the transfer of assets, goodwill, and activities. This brings us to the key principle of tax neutrality—a safeguard mechanism ensuring that such restructuring is not unduly penalized from a tax perspective.
- What Are STPs and Why Are They Formed?
STPs allow multiple professionals to offer services under one legal entity. They may be formed as:
- STP in form of S.r.l. (limited liability company)
- STP in form of S.p.A., or
- STP in form of a simple partnership (società semplice)
They are particularly useful for: - Pooling resources and clients
- Facilitating generational turnover
- Achieving better market visibility
- Providing cross-disciplinary services
When a professional joins or incorporates an STP, they often contribute assets or goodwill from their sole practice. The transfer of these elements raises important tax questions.
- Tax Neutrality in Professional Transfers
Tax neutrality means that the contribution of a business (or professional activity) to a company does not immediately trigger capital gains taxation. In Italy, this is governed primarily by:
- Art. 176 of the TUIR (Testo Unico delle Imposte sui Redditi) – Business contributions in exchange for shares are tax-neutral under certain conditions.
- Revenue Agency’s Circulars – Several interpretative documents clarify application to professional activities and STPs.
Key requirements for neutrality:
- The professional activity must be organized and operating as a business (even if small scale).
- The contribution must be in exchange for quotas/shares in the STP.
- The STP must continue the activity without interruption.
- What Can Be Transferred Without Taxation?
The following elements can be transferred tax-neutrally if structured correctly:
– Professional goodwill (avviamento professionale)
- Client lists and databases
- Equipment, software, and other assets
- Ongoing contracts and mandates
- Licenses and regulatory authorizations (if transferable)
If the transfer meets the neutrality conditions, no VAT or registration tax applies, and no income tax is due at the time of transfer.
- The Challenge of Identifying “Business Activity”
A key issue is whether a sole practitioner qualifies as operating a business (impresa) under tax law. The Italian Revenue Agency has, in some cases, accepted that a structured professional activity—especially if it has personnel, organized resources, or recurring contracts—qualifies for neutrality under Art. 176 TUIR.
However, if the professional merely acts as an individual with no business organization (e.g., a freelance consultant with no assets), tax neutrality might not apply.
- Indirect Tax Implications
In tax-neutral cases:
- No VAT is due on the contribution, as it is considered outside the VAT scope (exempt under Art. 2 DPR 633/1972).
- No registration tax is triggered, unless real estate is involved.
- Accounting and Corporate Considerations
From an accounting standpoint:
– The STP will record the contribution based on the carrying values or fair market values (depending on valuation and method).
- Shareholders will receive quotas in proportion to the contribution value.
- It is essential to draft a clear contribution agreement (atto di conferimento) and, if needed, perform a sworn valuation (perizia giurata).
- Benefits of Tax-Neutral Transfers
- No immediate tax cost to the professional transferring assets.
- Smooth transition of client relationships and contracts.
- Continuity of business under a new legal and fiscal identity.
- Enables succession planning, co-working, and growth.
- Risks and Considerations
- Misclassification of the transfer may lead to capital gain taxation.
- If not structured properly, VAT or registration tax could apply.
- Need to comply with professional regulations (e.g., bar associations, national councils).
- Proper due diligence is crucial, especially when involving more than one professional.
- Final Thoughts
Transfers to STPs or other professional associations, when structured with proper legal and fiscal guidance, offer a powerful tool for professionals seeking growth, collaboration, and long-term planning. Tax neutrality ensures that such reorganizations do not result in immediate tax burdens, encouraging efficiency and modernization in the professional services sector.
However, the specific tax treatment depends on the facts of each case. Therefore, professionals are strongly advised to consult tax advisors and legal experts before proceeding with such contributions.
