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 Substituted Tax Regime Applies in Case of Partly Italian-Source, Partly Foreign-Source Income
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
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
Disregarded Trust Still Complete For Italian Gift and Estate Tax Purposes, Italian Tax Agency Says
In its Ruling n. 359 of July 4, 2022 (Risposta n._359 of 04.07.2022), the Italian Tax Agency ruled that a trust which is disregarded for income tax purposes under the standards of Circular n. 61/E of December 27, 2010, is still respected as a complete and effective trust for Italian gift and estate tax
Italy’ Tax Agency Rules on Interplay Between HNWIs’ Flat Tax and Taxation of Italian Source Employment Income
With its Resolution n. 83 of 2-14-2022, the Italian Tax Agency ruled on interaction between the Italian special tax regime for high net worth individuals (so called “flat tax” or “lump sum tax” regime) and taxation of Italian source employment income under Italy’s general income tax.
The case involved certain international employees of an
Discretionary Beneficiary of Irrevocable Trust Required to Disclose Trust on Italian Tax Return
With its ruling n. 693 of October 8, 2021 (Prassi – AGENZIA DELLE ENTRATE – Risposta 08 ottobre 2021, n. 693), the Italian Tax Agency held that a discretionary beneficiary of a foreign irrevocable trust, treated as a fiscally opaque trust under Italy’s tax classification rules, is required to report his beneficial interest
Italian Tax Agency Rules on Italy’s Foreign Branch Exemption
With tax ruling n. 18/2022 of January 12, 2022 (Risposta_18_12.01.2022), the Italian tax agency ruled that for the foreign branch tax exemption to apply, a permanent establishment must exist in the foreign jurisdiction, fully taxable in the host country under both foreign country’s domestic tax law and any applicable tax treaty between Italy
Foreign Employer’s Italian-Based Remote Worker Eligible For Special Tax Regime, Italy’s Tax Administration Rules
In a series of recent tax rulings, Italy’s Tax Administration ruled that “remote workers” who live in and work remotely in Italy for a foreign employer with no trade or business in Italy can still qualify for the benefits of Italy’s new-resident workers special tax regime.
In 2015, Italy enacted a special tax regime for