Through order No. 25843 of 26 September 2026, the Italian Supreme Court (Corte di Cassazione) has once again ruled on financial investigations, clarifying certain principles concerning the use of bank account movements in tax assessments.
With this decision, the Court emphasises the importance of the so-called rebuttable legal presumption, under which bank account movements may serve as the basis for an assessment, unless the taxpayer demonstrates that the sums have already been taken into account in determining taxable income or that they are irrelevant for tax purposes.
Table of contents
- The case
- The legal framework for bank investigations
- Order No. 7389/2026: the distinction between deposits and withdrawals
- The burden of proof and the implications for taxpayers
- Legal sources
The case
The case concerns a tax assessment against an individual, a director of two companies in the construction sector.
Investigations into the taxpayer’s personal accounts, carried out following the failure to file income tax returns from 2004 to 2009, had in fact revealed unjustified deposits of over EUR 917,000, which were presumed to be attributable to undeclared income.
The taxpayer therefore lodged an appeal, arguing that most of the contested deposits in his bank account were attributable to the repayment of loans previously granted to the companies he managed. He also challenged the lawfulness of the assessment, claiming that there was neither the required authorisation to carry out the bank investigations nor the prerequisites for applying the tax presumption, which he considered to apply exclusively to entrepreneurs and self-employed workers.
The Supreme Court nevertheless rejected this approach, specifying that the presumption relating to bank deposits is not limited to entrepreneurs and professionals, but extends to taxpayers generally.
The Court also clarifies that, in order to rebut this presumption, generic justifications are not sufficient: specific and analytical evidence of the nature of the individual contested transactions is required.
The legal framework for bank investigations
The rules on bank investigations are founded on Article 32(1)(2) of Presidential Decree No. 600/1973 (D.P.R. n. 600/1973), which grants the tax authorities the power to use the data and information obtained through banking and financial relationships for the purposes of assessing income.
The provision introduces a rebuttable legal presumption, under which unjustified bank deposits may be used as the basis for assessing additional undeclared income, unless the taxpayer demonstrates that the sums have already been taken into account in determining taxable income or that they are irrelevant for tax purposes.
This framework is linked to Article 38 of the same decree, concerning the assessment of the income of individuals, allowing the presumption on bank deposits to be applied also to taxpayers who do not carry on a business or self-employed activity.
The legal nature of the presumption distinguishes this mechanism from simple presumptions, for which the requirements of gravity, precision and consistency must be met.
In the context of bank investigations, by contrast, the Italian Revenue Agency (Agenzia delle Entrate) may presume that unjustified bank deposits constitute undeclared income, without having to demonstrate which specific economic transaction the sums derive from. It is therefore for the taxpayer to provide evidence to the contrary, demonstrating that those amounts have already been taken into account in determining taxable income or that they are irrelevant for tax purposes.
Order No. 7389/2026: the distinction between deposits and withdrawals
The principle is further confirmed by order No. 7389 of 27 March 2026, which examines in greater depth the scope of application of bank presumptions, distinguishing between deposit and withdrawal transactions.
The ruling in fact refers to judgment No. 228/2014 of the Constitutional Court, which declared unconstitutional the application to self-employed workers of the presumption of additional income arising from unjustified bank withdrawals.
In particular, the Constitutional Court held it unreasonable to presume that sums withdrawn by a professional are necessarily intended to cover costs related to his or her activity and, consequently, to generate undeclared fees. Such a presumptive mechanism, in fact, finds its justification in business activity, which is characterised by the use of goods and services to produce revenue, but cannot be automatically extended to self-employment.
It follows that the presumption relating to bank withdrawals remains applicable to holders of business income, within the limits laid down by law, while the presumption relating to unjustified deposits continues to apply to taxpayers generally, including self-employed workers.
Returning, then, to the dispute examined in order No. 7389/2026, in the specific case the taxpayer operated on bank accounts attributable to an activity carried on through a de facto partnership; the Court therefore considered this circumstance relevant for the purposes of classifying the income as business income and, consequently, of applying the presumption to withdrawals as well.
The ruling also clarified that investigations may concern accounts formally held in the name of third parties, provided that the tax authorities demonstrate that they are effectively attributable to the taxpayer, without it being necessary to prove that the latter used them exclusively.
The burden of proof and the implications for taxpayers
Both orders confirm the importance of evidence to the contrary in assessments based on bank account movements.
A taxpayer called upon to justify the contested deposits must therefore be able to reconstruct the origin of the sums, demonstrating, with reference to the individual transactions, their possible irrelevance for tax purposes or their inclusion in the declared income.
For this purpose, depending on the circumstances, loan agreements, documentation relating to loan repayments, deeds of gift, sale documents and other evidence suitable for reconstructing the nature of the account movements may be relevant.
It is also confirmed that the mere existence of a bank credit does not necessarily imply taxable income, but where an assessment is based on Article 32 of Presidential Decree No. 600/1973, the taxpayer must be able to provide an adequate and precise justification.
Orders No. 25843/2026 and No. 7389/2026 therefore fit within the settled case law that recognises the findings of bank investigations as having significant probative value, while at the same time confirming the taxpayer’s ability to rebut the presumption by adequately demonstrating the nature of the contested transactions.
Legal sources
- Italian Supreme Court (Corte di Cassazione), Tax Chamber, order of 26 September 2026, No. 25843 — Original text – Corte di Cassazione
- Italian Supreme Court (Corte di Cassazione), Tax Chamber, order of 27 March 2026, No. 7389 — Original text – Corte di Cassazione
- Presidential Decree of 29 September 1973, No. 600, Article 32(1)(2) — Economic and Financial Documentation – MEF
- Presidential Decree of 29 September 1973, No. 600, Article 38 — Economic and Financial Documentation – MEF
- Constitutional Court, judgment of 24 September – 6 October 2014, No. 228 — Constitutional Court – Full text of the judgment