The Italian Supreme Court, with its ruling n. 8196 of April 22, 2015 held that a NY corporation, wholly owned by an Italian company, and effectively managed and controlled by its Italian shareholders and directors in Italy, had to be treated as an Italian resident company for Italian tax purposes, and was subject to corporate

Foreign trusts, with connections to Italy such as Italian located assets, beneficiaries or grantors, and aimed at producing legal and tax effects in Italy, will be subject to full disclosure in Italy including registration in the Italian public register of enterprises regardless of the fact that they are created and administered abroad and governed by foreign law. The disclosure obligation falls upon the trustee, even if residing abroad. Failure to disclose brings with it criminal and monetary penalties.

That is the result of the new transposition in to Italian law of the new EU anti money laundering directive.

The deadline for the implementation of the Directive in the law of the EU Member States is June 2017.

Foreign trustees of foreign trusts with connections to Italy must pay attention to the developments in this area of law.
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Italy enacted a new law that significantly amends its rules requiring Italian resident individual taxpayers to report their foreign financial investment and accounts and other assets capable of generating foreign source taxable income.

SCOPE OF REPORTING

The fist significant change reduces the scope of the reporting. it eliminates the duty to report intra year transfers

Italy’s enacted a new tax on real estate properties located outside of Italy. The tax is charged at 0.76 percent rate on purchase price of fair market value. Individual taxpayers owning foreign real property directly are liable for the tax. Apparently, the tax does not apply to real property owned indirectly through foreign investment or management companies.
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Italian tax administration provided clarifications that expand the application of Italian CFC rules. In particular, the administration explained that income from contract manufacturing activities and income from purchases or sales of related party products count as passive income for the purpose of applying the passive income test that triggers the application of the rules to controlled foreign companies organized in non black listed jurisdictions. The clarifications pose additional burden on international tax planning of Italian multinationals.
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Tre risposte dell’Agenzia delle Entrate a domande in materia di CFC affermano l’estensione della normativa sulle controllate estere anche ai casi di controllate estere che svolgono attività di trading e di lavorazione di prodotti per conto della casa madre. Le imprese italiane multinazionali sono costrette a rivedere la pianificazione fiscale dei rapporti infragruppo e valutare la necessità di un interprello a salvaguardia della non applicazione automatica della normativa con recupero di reddito e imposte e applicazione di conseguenti sanzioni in Italia
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Italy’s tax administration issued a guideline according to which all foreign assets must be reported in Italy, including personal assets (such as vacation homes, yachts, jewelery) that do not generate any foreign income taxable in Italy. The new guideline is part of a general reinforcement of foreign assets reporting rules adopted in connection with the enactment of the new tax shield, which enables taxpayers to declare unreported foreign assets and income and pay a reduced tax (4 percent, increased to 5 percent for disclosure returns filed by February 28 and 6 percent for disclosure returns filed by April 30).
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