Studio Legale Tributario Biscozzi Nobili updates

Italy implements OECD definition of 'permanent establishment'
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 05 October 2018

Italy recently implemented the recommendations set out in the Organisation for Economic Cooperation and Development's Additional Guidance on the Attribution of Profits to Permanent Establishments regarding the definition of a 'permanent establishment'. Article 162 of the Income Tax Code now includes a negative list of activities that do not constitute a permanent establishment, the anti-fragmentation rule and details of the requirements that give rise to a permanent establishment.

Unilateral corresponding downward adjustments
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 03 August 2018

The Tax Administration can now introduce unilateral corresponding downward adjustments to eliminate double taxation where a foreign tax authority makes a primary adjustment as a result of applying the arm's-length principle to transactions involving associated enterprises in a different tax jurisdiction. This new administrative procedure aims to accelerate the resolution of double taxation deriving from transfer pricing adjustments under mutual agreement procedures.

Implementing BEPS Actions 8 to 10
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 20 July 2018

The new principles introduced by Actions 8 to 10 of the Base Erosion and Profit Shifting project have been reflected in Italy through Decree-Law 50/2017's amendments to Article 110(7) of the Income Tax Code. The new article includes a specific reference to the arm's-length principle and provides for implementing provisions to be issued by the Ministry of Finance to align with international best practices.

Budget Law 2018 – new regime applicable to tax on blacklisted source dividends
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 04 May 2018

The Budget Law 2018 introduced, among other things, amendments to the tax regime concerning dividends from non-resident companies located in low-tax jurisdictions (ie, blacklisted companies). 'Blacklisted companies' are entities resident or located in jurisdictions other than EU or European Economic Area member states, whose ordinary or special tax regime grants a nominal tax rate that is 50% lower than the Italian one.

New tax rules for dividends and capital gains realised by non-business individuals
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 23 February 2018

The recently approved Budget Law has harmonised the taxation of dividends and capital gains earned by non-business individuals on substantial and non-substantial participation held in Italian and foreign companies, among other things. Companies and partnerships will be unaffected by these changes, as the distinction between substantial and non-substantial participation is irrelevant.

Notional interest deduction – an overview
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 24 November 2017

The notional interest deduction (NID) regime has been in effect since the 2011 fiscal year. Under this regime, Italian resident companies and permanent establishments of non-resident companies may deduct notional interest from their corporate income taxable base. The NID is calculated according to the equity increase (ie, new equity rate) from the end of the 2010 fiscal year, multiplied by a rate determined annually.

Country-by-country reporting – obligations of Italian subsidiaries of multinational groups
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 19 May 2017

Articles 1(145) and (146) of Law 208/2015 provide that the parent company of a multinational group resident in Italy must file a country-by-country report with the tax authorities within the specified time limit. The secondary legislation enacted by the Ministry of Finance's February 2017 decree-law provides further details on country-by-country reporting requirements and application rules, considering Organisation for Economic Cooperation and Development recommendations and EU Directive 2016/881/EU.

New tax regime for new residents
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 31 March 2017

The Budget Law 2017 has introduced an innovative tax regime based on a substitute flat tax reserved for new eligible individuals who transfer their tax residency to Italy. The new tax regime is based on the non-domiciled resident approach already adopted in the United Kingdom and other EU countries and aims to attract high-net-worth individuals and their relatives to Italy and increase foreign investment.

Tax Authority clarifies new CFC rules
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 24 February 2017

The Tax Authority recently issued Circular Letter 35/E, which clarifies Italy's controlled foreign companies (CFC) regime in light of recent changes under Budget Laws 190/2014 and 208/2015 and Decree-Law 147/2015. The black-list criteria provided for CFC purposes have been significantly revised and, if a CFC is deemed to exist, material clarifications have been provided with regard to the taxation of dividends paid which are – in principle – fully taxable in the hands of the Italian receiving company.

Tax guidance on leveraged buy-out transactions
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 14 October 2016

The Tax Authority recently issued a circular that provides general guidelines regarding leveraged buy-out transactions and similar acquisition structures, with particular reference to investments made by private equity funds. The guidelines cover interest expenses, fees charged by private equity firms, withholding tax on interest, shareholder loans and exit disposals.

Main provisions of Patent Box regime
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 20 November 2015

The government introduced a 'Patent Box' tax regime for the first time in 2014. The provision applies to corporate income tax and regional tax on productive activities and aims to provide a tax incentive to create, relocate and maintain intangible assets in Italy through the introduction of a tax regime based on the Organisation for Economic Cooperation and Development's 'nexus' approach.

New measures to support economic growth and internationalisation
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 10 July 2015

The Council of Ministers recently approved the implementation of three tax reform decrees. The third decree aims to create a favourable environment for foreign investors and Italian enterprises that want to grow their international business. Accordingly, the changes aim to simplify the existing rules based on international compliance standards.

Changes to withholding and substitute tax on financial income
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 03 October 2014

The government recently approved Decree-Law 66/2014, which introduced changes to the taxation of some types of financial income (ie, interest on loans, notes, capital gains and dividend incomes) effective as of July 1 2014, increasing the tax rate from 20% to 26%.

Stability Law brings changes for taxpayers
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 28 February 2014

Parliament recently approved the Stability Law 2014. The law contains a number of significant measures affecting individual and corporate taxpayers, including an increase in notional interest rate deductions, introduction of the option for companies to step up the tax cost of business assets and new provisions on the deductibility of payments made under finance lease agreements.

New reimbursement and exemption forms introduced for withholding taxes
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 11 October 2013

The Italian Revenue Agency recently approved new and revised forms to be used to claim for reimbursement of or exemption from Italian withholding taxes applicable to certain income of non-Italian residents. The agency also approved a standard certificate of tax residence to be filed by Italian residents with foreign tax authorities in order to obtain reimbursement of or exemption from foreign taxes.

Further clarification of participation exemption regime
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 07 June 2013

Under the Income Tax Code, any capital gain derived by an Italian-resident company is 95% exempt from corporate income tax. Since the participation exemption regime was introduced, the tax authorities have often been asked to consider specific cases involving the residence and the business activity requirements. As a result, Circular Letter 7/E was recently issued to clarify such issues further.

Stability Law ushers in new tax provisions
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 15 March 2013

Parliament recently approved the so-called 'Stability Law' for 2013. The law includes a number of significant measures affecting individual and corporate taxpayers. New provisions include an increase in value added tax, the reintroduction of an elective regime providing for a step-up in the tax basis for participation in unlisted 'revaluation' companies and the introduction of a financial transaction tax.

New anti-abuse provisions introduced for companies incurring consecutive tax losses
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 03 August 2012

Law Decree 138/2011, which was later converted to Law 148/2011, introduced new anti-abuse provisions for companies consecutively incurring tax losses and widened the application of provisions concerning non-operating companies that are required to disclose for tax purposes a minimum income determined on the basis of their assets, notwithstanding the actual result of the application of ordinary tax provisions.

Saving Italy: tax breaks seek to support corporate taxpayers
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 23 March 2012

In order to encourage corporate self-financing, the government has introduced the allowance for corporate equity, which enables companies to deduct an amount equal to the notional return on invested capital from their taxable income for income tax and corporation tax purposes. Further deductions are available for regional tax on production as an incentive to employers.

€54 billion austerity plan seeks to balance the books
Studio Legale Tributario Biscozzi Nobili
  • Corporate Tax
  • Italy
  • 02 December 2011

Parliament recently approved an austerity package that aims to present a balanced budget for 2012. Its various provisions - with an estimated financial impact of €54 billion - include a number of significant measures for individual and corporate taxpayers. In particular, companies should be aware of new provisions on carry-forward rules, criminal penalties and dormant companies.

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