Regarding the issue of “costs from crime,” the problem arises with particular clarity when, within the same case, multiple offenses are charged, some classifiable as felonies and others as misdemeanors. In such cases, for the purposes of non-deductibility, a case-by-case or offense-by-offense assessment is required, resulting in the non-deductibility only of costs attributable to felonies, and not to misdemeanors.
The principle affirmed by the Court of Cassation
With order no. 2717 of February 7, 2026, the Court of Cassation clarifies that the mere unity of criminal design does not justify an automatic extension of non-deductibility to the entire complex of costs; the verification must be conducted by identifying the portion of costs attributable to each offense, with non-deductibility limited to those traceable to felonies.
The principle is rooted in the regulations of Art. 14, paragraph 4-bis, Law 537/1993, which provides for the non-deductibility of costs or expenses relating to goods or services directly used for the commission of activities classifiable as non-negligent felonies, for which the public prosecutor has initiated criminal action. It follows that non-deductibility applies only in the presence of non-negligent felonies; negligent felonies and misdemeanors, however, are not relevant.
The specific case
The case examined by the Court concerned a sequence in which unauthorized land subdivision in conspiracy, classified as a misdemeanor, was first charged, followed by the felonies of corruption and fraud. The Tax Administration argued that the unity of the criminal design justified the recovery for taxation of the entire complex of costs and expenses attributable to the illegal activity, even if the charges were brought at different times. The Court of Cassation, however, excluded such automatism: non-deductibility does not “drag” all costs along en bloc, “as regard must instead be had separately to the specific portion of these attributable to each offense, with the consequent non-deductibility only of costs and expenses attributable to felonies and not to misdemeanors.”
The decisive criterion: the “direct usability” of costs
A further central profile is the verification of direct usability, a criterion that limits non-deductibility only to costs “directly employed” for the commission of the illegal activity. On this point, reference is made to the Revenue Agency circular no. 32 of August 3, 2012, which includes among the relevant costs:
- costs originally intended for the commission of the crime;
- production factors acquired for lawful activities but subsequently used for the crime;
- goods or services intended promiscuously for lawful activities and non-negligent felonies.
Nevertheless, a distinction must be made for the hypothesis in which the concept of “directly used” costs also includes those incurred after the completion of the felony, provided they are based on an obligation functionally connected to the felony itself. In general terms, the Supreme Court admits the possibility that even subsequent costs may be drawn into the area of non-deductibility if functional to the felony; however, in this specific case, it excludes such an outcome with reference to the subsequent unauthorized land subdivision, emphasizing the conceptual and legal autonomy of the cases and the diversity of the legal interest protected.