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Italy’s Revenue Agency has ruled that a Delaware trust — irrevocable, run by an independent professional trustee, with no other strings attached to the settlor or main beneficiary — is nonetheless fiscally “interposed,” triggering full income tax, RW monitoring, IVIE and IVAFE exposure for the beneficiary once she moves to Italy. The reason: a standard US-law clause giving her the power to decide, by will, how the remaining trust assets are split among her own children after she dies. Ruling No. 81/2026 treats that future, death-triggered choice as present control over the trust’s assets today — a reading of the “genuine divestment” test that looks hard to square with how limited powers of appointment actually work, and one that, if generalized, would make interposition the default outcome for a huge share of ordinary US discretionary trusts.…

I’m pleased to share my latest commentary, “Italy Changes Course on Bonus Tax Deferment for Inbound Employees,” published in Tax Notes International (2025tni37-5).

The article examines the Italian Revenue Agency’s surprising reversal in Ruling No. 199/2025, which abandons the pro rata approach to cross-border deferred compensation.

Under the older approach, Italy would not…

Introduction

The taxation of outbound dividends has been the subject of intense litigation in Italy and across Europe, particularly where non-E.U. entities are treated less favorably than similarly situated EU-based or domestic recipients operating in similar circumstances. Recent rulings by Italian courts following the European Court of Justice (ECJ) confirm that withholding tax on dividends…

On October 9, 2023, the last Ministerial Decree required for the final implementation of Italy’s Register of Trusts was published, and the Register of Trusts is now in effect. The initial filing deadline is December 11, 2023. The filing in the Register is required for domestic trusts, private foundations, and similar legal arrangements, defined as…

On October 16, the Council of Ministers approved a legislative proposal that will repeal the special tax regime for new resident workers, entrepreneurs, and professionals with effect from January 1, 2024.

The special regime, enacted in its final form in 2020, allows Italian and foreign nationals who establish their tax residence in Italy while not…

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…

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…