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 authorized the ratification of the new U.S.-Italy tax treaty (the “1999 Treaty”), together with a protocol and memorandum of understanding.

The 1999 Treaty shall enter into force on the date on which the instruments of ratification are exchanged and shall apply to taxable periods beginning on or after the first day of the following year.

However, for withholding taxes, the 1999 Treaty shall apply to payments made or accrued on or after the first day of the second month following its entry into force.

The 1999 Treaty contains several new important provisions, including provisions on limitation on benefits, arbitration, branch profits tax, reduced withholding rates, creditability of the Italian regional tax on production activities, and application of treaty benefits to partnerships.
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