In its ruling n. 370 issued on July 4, 2023, the Italian Tax Agency concluded that in a case of a change of tax residency during the year, the treaty provision according to which the change of tax residence takes effect on the day of the transfer out of Italy to the foreign country is…

In its Ruling n. 309 of April 28, 2023 (Risposta-n.-309_2023-1.pdf) the Italian Tax Agency addresses the issue of taxation to Italian beneficiaries with respect to distributions from a U.S. Trust.

Background

Under Italy’s tax law, trusts are classified in one of three ways, with different tax consequences for the trust, the settlor, and…

In its ruling no. 267, dated March 27, 2023 (Risposta-n.-267_2023.pdf), the Italian Tax Agency addressed a case involving a trust where the Settlor reserved the power to revoke and replace the Guardian and retained certain powers related to the shares of a company he transferred to the trust, including the power to appoint…

With its ruling n. 251, issued on March 16, 2023 (n. 251 of March 16, 2023), the Italian tax agency addressed the issue of the tax classification of a Family Trust and a Testamentary Trust that were funded and started operating following the death of the settlor.

Background

Under Italy’s tax law, trusts are classified…

The Italian Tax Agency recently issued Ruling n. 237 of March 2, 2023 (Risposta-n.-237_2023.pdf), which clarifies foreign trusts’ tax treatment concerning Italian tax resident beneficiaries.

Under the ruling, when the trustee of a foreign trust is required to make an annual distribution to beneficiaries based on a predetermined percentage of the fair market…

With its Ruling n. 237 of March 2, 2023 (Risposta n. 237-2023), the Italian Tax Agency ruled that when the trustee of a foreign trust is required to make an annual distribution to the beneficiaries of the trust of cash or other property of the trust that represent a predetermined percentage of the…

The Italian tax administration, in its Circular n. 34 of October 20, 2022, provided some new guidance on the international tax reporting obligations for assets held in foreign trusts. Domestic trusts report foreign assets held under the name of the trust on their own income tax return. In the case of foreign trusts, the reporting…

On September 1, 2022, the Italian Supreme Court issued a ruling (n. 25698) in a case concerning a distribution from a U.S. partnership treated as a taxable dividend in Italy. The dividend was taxed by way of a substituted tax, and Italian tax law did not allow a credit for the income tax paid the…

In its Ruling n.83 of February 14, 2022, the Italian Tax Agency confirmed that Italy’s substituted tax regime (so-called flat tax, or forfeit) for high net worth individuals applies in a case in which international executives or managers of multinational companies perform their functions partly in Italy and partly outside of Italy, where the group’s…

On October 20, 2022, Italy’s Tax Administration issued Circular 34/E providing final guidance on the Italian taxation of trusts. One section of the guidance discusses the new anti-abuse rule on the taxation of income distributions from foreign trusts to Italian resident beneficiaries. Article 44, paragraph 1, letter g-sexies of the Italian Income Tax Code…