By way of thirteen decisions issued in June and July (numbers 15451, 15453, 15455, 15456 of June 7, 2019, numbers 16699, 16700, 16701, 16702, 16703, 16704, 16705 of June 21, 2019, no. 19167 of July 17, 2019 and no. 19319 of July 18, 2019), the Italian Supreme Court ruled that the Italian gift tax does not apply to the transfer of property to a trust, at which time the gift is to be regarded as…

With its tax ruling n. 88/E of October 18, 2019 (Ruling 88-2019), the Italian Tax Agency denied the interest withholding tax exemption provided for in the EU Interest and Royalties Directive, in respect of interest due by an Italian Target on a shareholder’s loan extended from its EU Parent in connection with a merger leveraged buy-out transaction carried out in Italy. A EU-based holding company (Purchaser) set up and Italian acquisition vehicle (NewCo),…

In its Ruling N. 380 of September 11, 2019, Italy’s Tax Agency provided its guidance on certain tax implications of a corporate reorganization pursuant to which a Luxembourg holding company, which owns an Italian company, would reincorporate into Switzerland and convert into a Swiss tax resident company. Prior to the reincorporation of the holding company in Switzerland, the dividends paid by the Italian subsidiary to its Luxembourg parent were exempt from Italian withholding tax…

In its Private Letter Ruling n. 355 of August 30, 2019 the Italian Tax Agency considered the tax implications, for Italian gift tax purposes, of a transaction involving the early termination of an irrevocable trust by way of mutual consent of the trustee, settlor and beneficiaries of the trust, with a return of the trust’s assets to the settlor. The Tax Agency treated the termination of the trust as a gift of the trust’s assets…

Italian tax residence is a very important topic for foreign nationals who travel regularly to Italy, own houses and spend significant time with their family there, while living and working abroad, as well as for those who relocate to Italy and work, do business or just retire there. For the former, it may be surprising to know that they may have crossed the line and become Italian tax residents, under Italian tax law, even though…

Italy taxes various categories of financial income – namely dividends, interest and capital gains – earned by private investors outside the carrying on of a trade or business, by way of a substitute tax charged on the gross amount of the income at the flat rate of 26 percent. With effect from January 1, 2018, capital gains are no longer categorized as gains realized from the sale of qualified shareholdings (i.e., shareholdings exceeding a minimum…

With its resolution n. 53/E issued on May 29, 2019 the Italian tax agency issued some important clarifications on the exact scope of the Italian international tax reporting rules in case of foreign assets held through trusts, foundations or similar entities. In particular, the ruling focuses upon the interpretation of the term “beneficial owner”, which applies and is used to identify the individuals subject to the duty to report. Under Italian law (article 4, paragraph…