Opinion of the Advocate General — ECLI:EU:C:2025:223
Date: 2025-03-27
Language of the case: Italian
Procedure: Reference for a preliminary ruling
Origin: Italy

Translation C-92/24 – 1 
Case C-92/24 
Request for a preliminary ruling 
Date lodged: 
24 January 2024 
Referring court: 
Corte di giustizia tributaria di secondo grado della Lombardia 
(Italy) 
Date of the decision to refer: 
6 October 2023 
Applicant and Appellant: 
Banca Mediolanum SpA 
Defendant and Respondent: 
Agenzia delle Entrate – Direzione Regionale della Lombardia 
  
[OMISSIS]    Order n. 1467/2023 
[OMISSIS]       Lodged on 06/10/2023 
[OMISSIS] 
La Corte di Giustizia Tributaria di secondo grado della LOMBARDIA (the Tax 
Court at second instance of LOMBARDY) Section 22, [OMISSIS] 
[Composition of the court] 
on 27/09/2023, makes the following 
ORDER 
- on the appeal [OMISSIS] 
lodged by: 
Banca Mediolanum S.p.a.[OMISSIS] 
against 
EN 
REQUEST FOR A PRELIMINARY RULING OF 6. 10. 2023 – CASE C-92/24 
 
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Agenzia Entrate Direzione Regionale Lombardia (Lombardy Regional Directorate 
of the Revenue Agency) 
[OMISSIS] 
Concerning an appeal against: 
- judgment [OMISSIS] delivered by the Commissione Tributaria Provinciale 
MILANO (Provincial Tax Commission of Milan) sect. 12 [OMISSIS] 
Taxation acts: 
- REFUSAL REFUND IRAP (regional tax on productive activities) 2014 
following discussion in public hearing 
RELEVANT FACTS AND POINTS OF LAW 
The Tax Court at second instance of Lombardy 
- on the appeal lodged by Banca Mediolanum against the judgement delivered 
by Section 12A of the Provincial Tax Commission of Milan [OMISSIS]; 
- [OMISSIS]; 
- whereas the envisaged question of the compatibility of Article 6 of 
Legislative Decree No 446/1997 with EU law, and in particular with Directive 
2011/96/EU, appears necessary for the purposes of deciding on the application for 
a refund submitted by the taxpayer and rejected by the office; 
- refers the following question to the Court of Justice of the European Union 
for a preliminary ruling pursuant to Article 267 TFEU: 
QUESTION REFERRED FOR A PRELIMINARY RULING ON 
COMPATIBILITY 
WITH THE LAW [OF THE EUROPEAN UNION] OF PARAGRAPH 1 
OF ART. 6 OF LEGISLATIVE DECREE N. 446/1997 
1. [EUROPEAN UNION] LEGISLATION ON THE TAXATION OF 
DIVIDENDS DISTRIBUTED BY A SUBSIDIARY RESIDENT IN A MEMBER 
STATE TO A PARENT COMPANY RESIDENT IN ANOTHER MEMBER 
STATE 
Council Directive 2011/96/EU of 30 November 2011 on the common system of 
taxation applicable in the case of parent companies and subsidiaries of different 
Member States (recast of Directive 90/435/EEC of 23 July 1990) (‘Parent-
BANCA MEDIOLANUM 
 
3 
Subsidiary Directive’) aims to eliminate disadvantages and distortions faced by 
parent companies resident in one Member State of the European Union, when 
receiving dividends from subsidiaries resident in other Member States of the 
European Union. In fact, the recital identifies the objective as being ‘to exempt 
dividends and other profit distributions paid by subsidiary companies to their 
parent companies from withholding taxes and to eliminate double taxation of such 
income at the level of the parent company’ in so far as ‘the grouping together of 
companies of different Member States …. necessary in order to create within the 
Union conditions analogous to those of an internal market and in order thus to 
ensure the effective functioning of such an internal market”, they should not to be 
hampered “… by restrictions, disadvantages or distortions arising in particular 
from the tax provisions of the Member States” and it is therefore necessary “with 
respect to such groupings, to provide for tax rules which are neutral from the point 
of view of competition, in order to allow enterprises to adapt to the requirements 
of the internal market, to increase their productivity and to improve their 
competitive strength at the international level’. 
In order to achieve those objectives, article 4(1) of the Parent-Subsidiary Directive 
provides that, “where a parent company … by virtue of the association of the 
parent company with its subsidiary, receives distributed profits, the Member State 
of the parent company ”, shall “except when the subsidiary is liquidated”, a) 
refrain from “taxing such profits” or b) “tax such profits while authorising the 
parent company … to deduct from the amount of tax due that fraction of the 
corporation tax related to those profits and paid by the subsidiary”. 
In addition, Art. 4 (3) of the Parent-Subsidiary Directive grants ‘each Member 
State … the option of providing that any charges relating to the holding and any 
losses resulting from the distribution of the profits of the subsidiary may not be 
deducted from the taxable profits of the parent company’, but “where the 
management costs relating to the holding in such a case are fixed as a flat rate, the 
fixed amount may not exceed 5% of the profits distributed by the subsidiary”. 
Consequently, where the Member States exercise the option to determine the non-
deductible management costs of the holding as a flat rate, that provision requires 
them to make those costs non-deductible and thus to subject to tax a 
corresponding proportion of the dividends received by the parent company 
determined at a percentage rate not exceeding 5 per cent of their amount. 
2. THE TAX REGIME APPLICABLE TO IRAP (REGIONAL TAX ON 
PRODUCTIVE ACTIVITIES) IN ITALY IN RESPECT OF DIVIDENDS PAID 
BY RESIDENT SUBSIDIARIES IN OTHER MEMBER STATES TO PARENT 
COMPANIES RESIDENT IN ITALY 
Decreto Legislativo 15 dicembre 1997, n. 446 (Legislative Decree No 446 of 
15 December 1997 (‘Legislative Decree No 446’) governs the regional tax on 
productive activities (‘IRAP’). Under Article 2 of Legislative Decree No 446, the 
condition for the application of IRAP is the regular exercise of an independently 
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run activity whose object is the production of or trade in goods or the provision of 
services and, also under that provision, the activity carried on by companies and 
organisations is, in any event, a condition for the application of the tax. 
Consequently, Article 3 of Legislative Decree No 446 (a) and (e) also includes, 
among the persons liable to IRAP, the persons referred to in point l) of Part A of 
Annex I to the Parent-Subsidiary Directive, which contains the ‘list of companies 
referred to in Article 2(a) (i)’ of that directive, namely “companies under Italian 
law known as ‘società per azioni’, ‘società in accomandita per azioni’, ‘società a 
responsabilità limitata’, ‘società cooperative’, ‘società di mutua assicurazione’, 
and private and public entities whose activity is wholly or principally 
commercial’. 
Article 4 of Legislative Decree No 446 determines the basis of assessment for 
IRAP as the ‘net value of production deriving from activity carried on within the 
region’. 
Article 6 of Legislative Decree No 446 establishes that, for banks and other 
financial intermediaries, the basis of assessment for IRAP is determined by the 
algebraic sum of the following items in the income statement: 
(a) intermediation margin reduced by 50 per cent of the dividends; 
(b) depreciation/amortisation of tangible/intangible assets for functional use in 
the amount of 90 per cent; 
(c) other administrative expenditure in the amount of 90 per cent; 
(c-bis) net value adjustments and write-backs for credit risk, limited to those 
relating to loans to customers credits stated in the financial statement under that 
heading. 
Consequently, banks and other financial intermediaries resident in Italy, which are 
classified as parent companies for the purposes of the Parent-Subsidiary Directive, 
are obliged to include 50 per cent of the total amount of dividends distributed by 
companies resident in other Member States of the European Union, which are 
classified as subsidiaries, in their basis of assessment for IRAP, where those 
dividends are included in the intermediation margin recorded in the income 
statement. 
Under Article 16 (1-bis) and (3) of Legislative Decree No 446, with regard to 
banks and other financial intermediaries, IRAP applies at the rate of 4.65 per cent 
and the regional authorities may vary that rate up to a maximum of 0.92 
percentage points. 
Banks and other financial intermediaries which are classified as parent companies 
for the purposes of the Parent-Subsidiary Directive and which have included 50 
per cent of dividends distributed by subsidiaries resident in other Member States 
BANCA MEDIOLANUM 
 
5 
of the European Union in the basis of assessment for IRAP, are not permitted to 
deduct the fraction of corporation tax relating to those profits paid by those 
subsidiaries in their Member State of residence from the IRAP tax due. 
Consequently, banks and other financial institutions resident for tax purposes in 
Italy, which are classified as parent companies for the purposes of applying the 
Parent-Subsidiary Directive, tax dividends received by subsidiaries resident in 
other Member States, which fulfil the conditions laid down in the Parent-
Subsidiary Directive, to taxation for IRAP purposes, at the rate of 50 per cent of 
their total amount. 
3. THE MAIN PROCEEDINGS 
In the 2014 tax year, BANCA MEDIOLANUM S.p.A. (“BANCA 
MEDIOLANUM”) held shares in the following companies, which took one of the 
forms set out in Annex A to the Parent-Subsidiary Directive, were resident for tax 
purposes in Ireland, Luxembourg and Spain, without being considered, under the 
terms of the double taxation agreement concluded with a third State, as resident 
for tax purposes outside the Union and were subject, without benefiting from 
exemption schemes, to one of the taxes listed in Annex B to the Parent-Subsidiary 
Directive: 
(a) a 51 per cent holding in the capital of Mediolanum International Funds Ltd, 
which is resident for tax purposes in Ireland; 
(b) a 51 per cent holding in the capital of Mediolanum Asset Management Ltd, 
which is resident for tax purposes in Ireland; 
(c) a 99.996 per cent holding in the capital of Gamax Management AG, resident 
for tax purposes in Luxembourg; 
(d) a 100 per cent holding in the capital of Banco Mediolanum S.A., resident for 
tax purposes in Spain. 
Banca Mediolanum received dividends from those subsidiaries totalling 
EUR 231,912,007.51 and received, more precisely: 
(a) the sum of EUR 164,820,000.00 from Mediolanum International Funds Ltd; 
(b) the sum of EUR 10,710,000.00 from Mediolanum Asset Management Ltd; 
(c) the sum of EUR 6,382,007.51 from Gamax Management AG; 
(d) the sum of EUR 50,000,000.00 from Banco Mediolanum S.A.. 
The subsidiaries, resident for tax purposes in Ireland, Luxembourg and Spain and 
subject there to corporation tax, did not withhold any tax at source on the 
dividends paid to BANCA MEDIOLANUM, in so far as all the conditions laid 
REQUEST FOR A PRELIMINARY RULING OF 6. 10. 2023 – CASE C-92/24 
 
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down in Article 2 of the Parent-Subsidiary Directive were satisfied, this article 
providing for exemption from withholding tax on dividends paid by a ‘subsidiary’ 
which ‘(i) takes one of the forms listed in Annex I, Part A; ii) which, according to 
the tax laws of that Member State, is considered to be resident for tax purposes in 
that Member State and, under the terms of a double taxation agreement concluded 
with a third State, is not considered to be resident for tax purposes outside the 
union; iii) that, moreover, it is subject, to one of the taxes listed in Annex I, Part 
B, without the possibility of an option or of being exempt, or to any other tax 
which may be substituted for any of those taxes” with regard to a ‘parent 
company’ which, under Article 3 of that Directive, “fulfils the conditions set out 
in Article 2 and has a minimum holding of 10% in the capital of a company of 
another Member State fulfilling the same conditions’. 
BANCA MEDIOLANUM recognised the dividends received from those 
companies in the tax year 2014 under the item ‘dividends and similar income’ in 
the income statement, included in the intermediation margin. 
BANCA MEDIOLANUM therefore included the aforementioned dividends in the 
basis of assessment for corporate income tax (IRES) relating to the 
aforementioned tax year 2014 up to a maximum of 5 per cent of the total amount, 
in accordance with Article 89 of the Italian Tax Consolidation Act (TUIR). 
BANCA MEDIOLANUM is classified as a financial intermediary within the 
meaning of Article 6 of Legislative Decree No 446. Thus, that company also 
included, in its IRAP tax return submitted for the tax period 2014, 50% of the total 
amount of those dividends in the basis of assessment for that tax and therefore for 
the sum of EUR 115,956,003.76, in accordance with Article 6 of Legislative 
Decree No 446. 
Finally, BANCA MEDIOLANUM paid EUR 10,392,278.00 as IRAP due, in the 
same tax return, by applying the rate of 5.57 per cent to the basis of assessment 
thus determined, and, having acquired an IRAP tax surplus of EUR 5,712,250.00 
in its previous tax return and made down payments totalling EUR 9,451,969.00 
during the tax period 2004, it stated an IRAP tax surplus of EUR 4,771,941.00. 
On 4 June 2019, BANCA MEDIOLANUM submitted a request to the Lombardy 
Regional Directorate of the Revenue Agency (“Office”) for a refund of the IRAP 
paid in excess on the ground that it had applied that tax to 50 per cent of the 
dividends received by the company from Mediolanum International Funds Ltd, 
Mediolanum Asset Management Ltd, Gamax Management AG and Banco 
Mediolanum S.A., taking the view that, by imposing IRAP on 50 per cent of the 
amount of those dividends, Article 6(1) of Legislative Decree No 446 was 
contrary to Article 4 of the Parent-Subsidiary Directive, which precludes 
dividends distributed by subsidiaries to parent companies from being taxed at 
more than 5 per cent of their amount. 
BANCA MEDIOLANUM 
 
7 
On 16 October 2020, the Office served a rejection decision on BANCA 
MEDIOLANUM, dismissing the request for a refund submitted by that bank. 
In particular, in the statement of reasons for that decision, the Office maintained 
that Article 6 of Legislative Decree No 446, in so far as it requires financial 
intermediaries resident for tax purposes in Italy, which are classified as parent 
companies for the purposes of the Parent-Subsidiary Directive, to subject to IRAP 
tax also 50 per cent of dividends distributed by companies resident in other 
Member States of the European Union, which are classified as subsidiaries for the 
purposes of that directive, is not contrary to Article 4 of that directive, since that 
provision does not apply to IRAP, but only to income taxes. 
By an application served on 15 December 2020, BANCA MEDIOLANUM 
challenged the aforementioned rejection decision by making an application to the 
Corte di Giustizia Tributaria di Primo Grado di Milano (Tax Court of First 
Instance of Milan), challenging its legality and merits and asking that court to 
order the Office to pay the refund requested. 
In its judgment, the Tax Court of First Instance of Milan dismissed that 
application, finding, in turn, that the prohibition laid down in Article 4 of the 
Parent-Subsidiary Directive does not apply to IRAP tax. 
By an appeal lodged on 31 January 2023, BANCA MEDIOLANUM challenged 
the aforementioned judgment of the Tax Court of First Instance of Milan before 
the Referring court, requesting that it be amended and, consequently, that the 
Office be ordered to refund the amount of the IRAP tax surplus claimed in the 
initial application. 
4. THE QUESTION SUBMITTED FOR A PRELIMINARY RULING 
That said, the resolution of the question relating to the taxation for the purposes of 
IRAP of 50 per cent of the dividends received by financial intermediaries, which 
are classified as a parent company for the purposes of the Parent-Subsidiary 
Directive, from companies resident in other Member States of the European 
Union, which are classified as subsidiaries for the purposes of that directive, on 
the basis of national law, is, as a result of Article 6(1) of Legislative Decree 
No 446/1997, conditional upon the solution of the question referred concerning 
the compatibility of subjecting to IRAP 50 per cent of those dividends with 
Article 4 of the Parent-Subsidiary Directive. According to the defined legal 
framework [of the European Union], the prohibition on treating dividends 
distributed by a subsidiary resident in another Member State as taxable in the 
hands of a parent company resident in a Member State, in excess of 5 per cent of 
their amount, could also be applied in Italy in respect of IRAP. 
However, if that were the case, Article 6(1) of Legislative Decree No 446 would 
be incompatible with the prohibition thus defined, in so far as it requires banks 
and other financial intermediaries, which are classified as parent companies for 
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the purposes of the Parent-Subsidiary Directive, to subject to IRAP 50 per cent of 
dividends received by companies resident in other Member States of the European 
Union, which are classified as subsidiaries for the purposes of that directive, 
without Italy guaranteeing to the parent companies the right to deduct from IRAP 
the proportion of corporation tax relating to those dividends paid by the 
subsidiaries 
In that regard, it is significant to note that the Court of Justice of the European 
Union (“CJEU”), in its judgments of 17 May 2017, relating to Case C-365/16 
(AFEP v Ministre des Finances et des Comptes publics) and to Case C-68/15 (X v 
Ministerraad), clarified that Article 4 of the Parent-Subsidiary Directive prohibits 
EU Member States from subjecting to any form of taxation, with regard to parent 
companies, and thus not only to corporation tax, dividends distributed to them by 
their subsidiaries in excess of 5 per cent of their amount. 
More specifically, in Case C-365/16, the French Council of State referred to the 
European Court of Justice the question whether Article 235ter ZCA of the French 
General Tax Code was compatible with the combined provisions of paragraphs 1 
and 3 of Article 4 of the Parent-Subsidiary Directive, in so far as it imposed on 
parent companies, not only the obligation to subject to corporation tax 5 per cent 
of the dividends which they receive, in respect of the non-deductible management 
costs relating to the holding fixed as a flat rate, but also the obligation to subject 
them to an additional tax of 3 per cent when redistributing them to the 
shareholders of that parent company. In response to that question, the CJEU, 
having established that ‘since the Parent-Subsidiary Directive pursues, in 
accordance with recital 3 thereof, the objective of eliminating double taxation of 
profits distributed by a subsidiary to its parent company at the level of the parent 
company, taxation of that parent company by its Member State in respect of those 
profits when they are distributed, which would have the effect of making the 
profits subject to taxation exceeding the ceiling of 5% laid down in Article 4(3) of 
that directive, would lead to a double taxation at the level of the parent company 
contrary to that directive’, held that the French tax legislation was incompatible 
with Article 4 of the Parent-Subsidiary Directive. That provision ‘precludes a tax 
measure laid down by the Member State of a parent company, such as that at issue 
in the main proceedings, providing for the levy of a tax when the parent company 
distributes dividends and the basis of assessment of which tax is the amounts of 
the dividends distributed, including those coming from that company’s non-
resident subsidiaries’, since ‘Article 4(1)(a) of Parent-Subsidiary Directive does 
not limit its application to a particular tax’, by providing that ‘the Member State of 
the parent company shall refrain from taxing the profits distributed by the non-
resident subsidiary “ and “thus seeks to avoid Member States adopting tax 
measures which lead to double taxation of parent companies in respect of those 
profits” and therefore “in that context,….it is irrelevant whether or not the tax 
measure is classified as corporation tax”. Furthermore, in Case C-68/15, the 
Belgian Constitutional Court referred to the European Court of Justice the 
question whether it was compatible with the combined provisions of paragraphs 1 
and 3 of Article 4 of the Parent-Subsidiary Directive, Chapter 15 of the Belgian 
BANCA MEDIOLANUM 
 
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Income Tax Code, in so far as it imposed on parent companies, not only the 
obligation to subject to corporation tax 5 per cent of the dividends which they 
receive, in respect of the non-deductible management costs relating to the holding 
fixed as a flat rate, but also the obligation to subject them to a 5.15 per cent 
Fairness Tax when redistributing them to the shareholders of the parent company, 
in the event that those dividends consist of profits which had not been included in 
its taxable income. In answer to that question, the CJEU held that ‘Article 4(1)(a) 
of the Parent-Subsidiary Directive, read in conjunction with Article 4(3), must be 
interpreted as precluding national tax legislation, such as that at issue in the main 
proceedings, in so far as that legislation, in a situation where profits received by a 
parent company from its subsidiary are distributed by the parent company after the 
year in which they were received, has the consequence of subjecting those profits 
to taxation exceeding the 5% ceiling provided for in that provision”. 
[Repetition of extracts from Court judgments already cited in the preceding 
paragraph]. 
The approach taken by the CJEU is therefore that Article 4 of the Parent-
Subsidiary Directive prohibits EU Member States from subjecting to any form of 
taxation, with regard to parent companies, dividends distributed to them by their 
subsidiaries in excess of 5 per cent, not only when the dividends are received, but 
also upon their subsequent distribution to the shareholders of the parent company. 
In the light of the foregoing, Article 6 of Legislative Decree No 446, in so far as it 
obliges banks and other financial intermediaries resident in Italy, which are parent 
companies for the purposes of the Parent-Subsidiary Directive, to subject to IRAP 
50 per cent of the dividends they have received from companies resident in other 
Member States of the European Union, which are classified as subsidiaries for the 
purposes of that directive, could be incompatible with the prohibition on 
subjecting profits received by parent companies resident in one Member State 
from subsidiaries resident in other Member States to taxation at a percentage rate 
exceeding 5 per cent of the corresponding amount provided for in Article 4 of the 
Parent-Subsidiary Directive, as interpreted by the CJEU and the judgments passed 
on 17 May 2017, Case C-365/16 and Case C-68/15. The introduction of such an 
obligation ‘ has the consequence of subjecting those profits to taxation exceeding 
the 5% ceiling provided for in that provision’. 
The resolution of the envisaged question is obviously relevant and decisive for the 
purposes of resolving the present case due to the fact that, if Article 6 (1) of 
Legislative Decree No 446 of 15 December 1997 is found to be incompatible with 
the aforementioned provisions of Council Directive 2011/96/EU of 30 November 
2011, in so far as it allows, with regard to financial intermediaries resident in 
Italy, which are classified as parent companies for the purposes of the Parent-
Subsidiary Directive, 50 per cent of the dividends distributed by companies 
resident in other Member States of the European Union, which are classified as 
subsidiaries within the meaning of that directive, to be subjected to IRAP, the 
contested rejection decision and the judgment under appeal are unlawful and the 
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application for a refund made in the present case is well founded, given that 
BANCA MEDIOLANUM requested a refund of the IRAP in excess paid on 
account of the inclusion in the basis of assessment of 50 per cent of the dividends 
which that company received from its subsidiaries established in Ireland, 
Luxembourg and Spain, and the Office rejected that request with the decision 
made. 
In conclusion, the referring Tax Court of Second Instance, Lombardy, refers the 
following question to the Court of Justice of the European Union for a preliminary 
ruling, pursuant to Article 267 TFEU: 
is the claim made by the Italian Republic, contained in Article 6(1) of Legislative 
Decree No 446/1997, to subject to IRAP 50 per cent of dividends received by 
financial intermediaries resident in Italy, which are classified as parent companies 
for the purposes of Council Directive 2011/96/EU of 30 November 2011, and 
distributed by companies resident in other Member States of the European Union, 
which are classified as subsidiaries within the meaning of that directive, without 
authorising the parent companies to deduct from IRAP the fraction of corporation 
tax relating to those profits paid by the subsidiaries, not incompatible with the 
prohibition on subjecting profits received by parent companies resident in one 
Member State from subsidiaries resident in other Member States to taxation at a 
percentage rate exceeding 5 per cent of the amount referred to in Article 4 of that 
directive? 
ON THESE GROUNDS 
[OMISSIS] [Standard wording] 
[OMISSIS] 27.9.2023 
[OMISSIS] [Formation of the Court]