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15 March 2013
On December 29 2012 Parliament approved the so-called 'Stability Law' for 2013. The law includes a number of significant measures affecting individual and corporate taxpayers.
The ordinary value added tax rate has been raised from 21% to 22% with effect from July 1 2013. The applicable rate is determined by the date on which the goods and services were supplied, according to Article 6 of Presidential Decree 633/72.
The law has reintroduced an elective regime providing for a step-up in the tax basis for participation (ie, shares, quota and equity rights) in unlisted 'revaluation' companies and land held as of January 1 2013. Revaluation is available only if the owners are resident individuals, non-commercial partnerships or non-resident persons (for a participation not held through a permanent establishment). However, non-resident persons are allowed to step up the tax value of a participation only if they are not entitled to take advantage of a tax treaty or if the applicable tax treaty provides for taxation of capital gains on equity instruments in Italy (eg, the Italy-US treaty under certain conditions and the Italy-France treaty, subject to certain requirements).
The relevant value of a company will be determined as of January 1 2013, pursuant to an appraisal drawn up by July 1 2013. The revaluation is recognised upon payment of substitute tax on the appreciated value resulting from an appraisal whose shares are stepped up (ie, former tax basis plus latent capital gain). The tax rate will be 4% for land or a 'qualified' participation and 2% for a 'non-qualified' participation.(1) The substitute tax can be paid in a one-off payment by June 30 2013 or in three equal annual instalments(2) – although an annual 3% interest charge will be due on the second and third instalments.
Following the guidelines of the European Commission, a financial transaction tax (also referred to as the 'Tobin tax') has been introduced on transactions involving shares, equity-like financial instruments and derivatives, and high-frequency trades.(3) The financial transaction tax will apply to:
Shares and other equity
As of March 1 2013, the financial transaction tax is due by individuals acquiring ownership of shares or participating instruments, regardless of their place of residence or where the contract was concluded. The following financial transaction tax rates will apply:
Derivatives and other securities
As of July 1 2013, the financial transaction tax will be due by contractual parties to transactions involving financial instruments and transferable securities, regardless of their place of residence or where the transaction was concluded.
A different fixed rate (up to €200) will apply according to the type of transaction concluded (eg, swaps, futures, options, cash notional forward agreements and credit default swaps). For transactions executed on regulated financial markets or in multilateral negotiation systems, the applicable rate will be reduced to one-fifth of the standard rate.
The financial transaction tax is due by the entity on behalf of which the trading orders are executed. High-frequency trading of shares and participating instruments (performed after March 1 2013) or derivatives (performed after July 1 2013) will be subject to the tax at the 0.02% rate.
For further information on this topic please contact Marco Abramo Lanza, Simona Zangrandi or Franco Pozzi at Studio Legale Tributario Biscozzi Nobili by telephone (+39 02 763 6931), fax (+39 02 780 146) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org).
(1) For unlisted companies, a 'non-qualified' participation is one with no more than 20% of the voting rights in the ordinary shareholders' meeting or no more than 25% of the issued capital.
(2) The step-up is effective upon payment of the first instalment. If the taxpayer neglects to pay the subsequent instalments, the tax authority will be notified. The tax authority will claim the payment of the next instalments with interest and penalties.
(3) As the financial transaction tax legislation is quite new, practitioners expect significant changes to the current provisions and clarifications from the Revenue Agency. Further details on this are forthcoming.
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