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
International Taxation
Italian Taxation of Trusts: U.S. Complex Trust Meets Italy’s Anti-Abuse Rule, Distributions of Trust Income to Italian Trust Beneficiaries Not Taxable In Italy
The Italian Tax Agency’s Ruling n. 309 of April 28, 2023 (Risposta-n.-309_2023-1.pdf) deals with the issue of taxation to Italian beneficiaries of income distributions from a U.S. trust.
Background.
Under Italy’s tax law, trusts with identified income beneficiaries are treated as fiscally transparent, and the beneficiaries are taxed on their share of…
Italian Taxation of Trusts: Tax Agency Rules that Settlor’s Unconditioned Power To Remove and Replace Guardian Makes the Trust Fiscally Interposed, Nonexistent For Tax Purposes
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…
Italian Taxation of Trusts: Tax Agency Rules on Taxation of a Foreign Family Trust and Testamentary Trust in Italy
The Italian Tax Agency recently issued a ruling (n. 251 of March 16, 2023) that provides guidance on the Italian tax classification of Family Trusts and Testamentary Trusts and the taxation of Italian beneficiaries on the trusts’ income.
Background
The settlor, an Australian national, established the trusts while he was a resident of…
Italian Taxation of Trusts: Tax Agency Rules on Taxation of Beneficiaries of Unitrust Distributions
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…
Italian Taxation of Trusts: Tax Agency Rules on Taxation of “Unitrust” Beneficiaries
By Marco Rossi on
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…
Italy’s New Guidance on International Tax Reporting for Trust Beneficiaries
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…
Some further thoughts on the Italian Supreme Court’s dividend foreign tax credit ruling: very good news for taxpayers, or a potential misunderstanding?
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…
Italy’s Tax Administration Issued Final Guidance on Taxation of Trusts, Singles Out UK “Offhore” Trusts Subject to New Anti Abuse Rule
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,…
Italian Tax Administration Issued Its Final Guidance on Taxation of Trusts, Discusses Italian Gift Tax On Distributions From Foreign Trusts
On October 20, 2022 the Italian Tax Administration issued Circular n. 34/E (Circolare Trust n. 34 del 20 ottobre 2022) providing final guidance on Italian taxation of trusts. One issue addressed in Circular 34 deals with the application of the Italian gift tax with respect to a transfer of property into a foreign…