Italy removed Cyprus and Malta from black list for purposes of CFC rules and Italian rules on tax residency of individuals.
Italian Taxation of Companies and Businesses
MQR&A advised Landi Renzo on its acquisition of Baytech Corporation
By Marco Rossi on
Landi Renzo acquires Baytech, MQR&A acts as legal counsel on the transaction…
New Law Requires Additional Disclosure of Abusive Transactions
By Marco Rossi on
Italy reinforces its anti abuse rules by requiring separate monthly or quarterly disclosure of transaction with foreign enterprises organized in black listed jurisdictions. Deduction of costs and expenses arising from those transactions is denied unless taxpayer proves legitimate business purpose beyond tax saving.…
Italy’s Government to Approve New Rules on Transfer Pricing Documentation, Anti Tax Abuse
By Marco Rossi on
A decree presented to the Italian Council of Ministers today will introduce new provisions on contemporaneous documentation for transfer pricing purposes and a new black list with a duty to disclose any transaction carried out in or with any black listed countries to the tax administration. Also, the minimum threshold for the duty to report cross border transfers of money will be reduced to euro 5,000.…
Italy’s Tax Administration Announces More Controls on Nonresidents’ Tax Refunds
By Marco Rossi on
Italy’s tax administration announced stricter controls on tax refund applications filed on behalf of nonresident persons, and sent a notice to various banks acting as intermediaries in which it requested more information in order to avoid abuse and treaty shopping. As a result, banks may be compelled to identify and disclose information about clients and final beneficiaries of the refund.…
Italy’s Tax Administration Published Report on Italian International Tax Ruling (APA)
By Marco Rossi on
Italy’s tax administration published its report on Italian international tax ruling showing 52 applications and 19 agreements signed in the first five years of the program, half of which by foreign multinational enterprises.…
Italy Extends Deadline for Voluntary Compliance Program
By Marco Rossi on
Italy Extends Deadlines for Voluntary Disclosure of Undeclared Foreign Assets Program…
No Participation Exemption in the Absence of Active Business
By Marco Rossi on
Participation exemption rules do not apply to gains from sale of stock of passive intellectual property holding companies. For the exemption to applies, the company must be engaged in an active licensing business, which includes the active management and development of the intangibles and active licensing to third parties.…
Italy Amended its CFC Rules
By Marco Rossi on
Italy amended its CFC rules with effect from 1/1/2010. Under the new rules, the active business exception applies only when the controlled foreign company carries on a business in the local market of the country in which the company is established, and it never applies to company more than 50 percent of whose income is passive income (dividends, interest, gains and income from services to affiliated entities). Also, the CFC rules apply also to companies that are established in white listed jurisdictions, when (1) the foreign company is subject to an effective tax in its own country of organization that is less than 50 percent of the Italian tax, and (2) more than 50 percent of the foreign company’s income is passive income (dividends, interest, gains and income from services to affiliated entities. As a result of the changes, many tax planning structures for Italian companies shall have to be revisited. In particular, many holding companies used by Italian company to handle their outbound investments may become CFC and their income could become taxable currently upon their Italian shareholders in Italy.…
Circular 26/E of May 21, 2009 Provides Guidance on EU Dividends Withholding Tax
By Marco Rossi on
Italy issued circular n. 26/E of May 21, 2009 which provides clarifications on the new EU dividend withholding tax. The reduced tax rate of 1.375 percent applies to dividends paid to companies that are resident in an EU member state and are subject to corporate tax in their own state of residence, even though they do not pay any tax on their income due to an exemption or other particular tax regime that applies in that state.…