Italy’s Tax Administration in ruling 54 of March 3, 2009 clarified that debt instruments issued by Italian limited liability companies (SRLs) can qualify as debt obligations for tax purposes, and interest paid thereunder can be eligible for the exemption from Italian tax (portfolio interest exemption) fore foreign investors, if the instrument is not part of a permanent establishment of the foreign investor in Italy and the foreign investor otherwise qualifies for the exemption by reasons of being resident or domiciled in an approved jurisdiction (white-listed country).
Italian Taxation of Companies and Businesses
Deduction of Tax-Haven Costs Requires Proof of Specific Economic Interest
By Marco Rossi on
Deduction of costs arising from transactions with entities domiciled in low-tax jurisdictions requires proof of specific economic interest.…
Special Audits and Rulings for “Big Taxpayers”
By Marco Rossi on
Big taxpayers are subject to automatic audit…
Italy’s Tax Administration Clarifies New Tax Avoidance Ruling Procedure
By Marco Rossi on
Italy’s tax administration clarified new tax avoidance ruling procedure. The ruling must be issued within 120 days from taxpayer’s application. Failure to issue the ruling within 180 days from taxpayer’s application is deemed to be an approval of taxpayer’s position on the relevant issues of law.…
The New Consolidated Corporate Income Tax Form for 2009 Addresses Interest Deduction Limitations in Consolidated Groups
By Marco Rossi on
New corporate tax form for 2009 implements new provisions on deduction of interest expenses within the tax consolidated group…
EU Outbound Merger Not Eligible For Tax-Free Treatment if No Permanent Establishment in Italy After the Merger
By Marco Rossi on
Italian tax administration rules that EU merger does qualify for tax free treatment under the EU merger directive if no permanent establishment in Italy exists after the merger…
Burden of Proof of Tax Avoidance on Tax Administration, Italian Supreme Court Says
By Marco Rossi on
The Tax Section of the Italian Supreme Court in its judgment n. 1465 of January 21, 2009 held that the tax administration bears the burden to prove that a transaction is carried out solely to obtain a tax advantage, in order to disregard the transaction and deny the tax benefits obtained by the taxpayer under…
Madeira Company Held Liable to Tax in Italy, Regional Tax Court Ruled
By Marco Rossi on
Italian Regional Tax Court found a Madeira company engaged in the business of purchasing and selling goods had its permanent establishment in Italy and was subject to tax in Italy, were its contracts were negotiated and its business was supervised by its shareholders.…
Italian Supreme Court Applies General Anti-Avoidance Principle
By Marco Rossi on
With two very important decisions issued on December 23, 2008 and concerning a dividend washing and dividend stripping transaction, the Italian Supreme Court for the first time applied a general anti-avoidance principle deriving directly from the Italian Constitution. According to the Court, the general anti-avoidance principle is an underlying principle of the Italian tax system that applies on top and above of any other specific anti abuse provision of the tax code, and denies the tax benefits of a transaction that lacks economic substance and is entered into for the sole or principal purpose of obtaining a tax advantage.…
Italy’s Tax Administration Rules on Cross-Border Tax Free Mergers
By Marco Rossi on
With ruling n. 470/E of December 3, 2008 Italy’s tax authority extended non recognition treatment to a merger falling outside the scope of the EU mergers directive, facilitating the possibility to carry out cross-border reorganization involving Italian assets or Italian companies without immediate recognition of gain.…