Corporate Tax, Studio Legale Tributario Biscozzi Nobili updates

Italy

Contributed by Studio Legale Tributario Biscozzi Nobili
Italy implements OECD definition of 'permanent establishment'
  • Italy
  • 05 October 2018

Italy recently implemented the recommendations set out in the Organisation for Economic Cooperation and Development's Additional Guidance on the Attribution of Profits to Permanent Establishments regarding the definition of a 'permanent establishment'. Article 162 of the Income Tax Code now includes a negative list of activities that do not constitute a permanent establishment, the anti-fragmentation rule and details of the requirements that give rise to a permanent establishment.

Unilateral corresponding downward adjustments
  • Italy
  • 03 August 2018

The Tax Administration can now introduce unilateral corresponding downward adjustments to eliminate double taxation where a foreign tax authority makes a primary adjustment as a result of applying the arm's-length principle to transactions involving associated enterprises in a different tax jurisdiction. This new administrative procedure aims to accelerate the resolution of double taxation deriving from transfer pricing adjustments under mutual agreement procedures.

Implementing BEPS Actions 8 to 10
  • Italy
  • 20 July 2018

The new principles introduced by Actions 8 to 10 of the Base Erosion and Profit Shifting project have been reflected in Italy through Decree-Law 50/2017's amendments to Article 110(7) of the Income Tax Code. The new article includes a specific reference to the arm's-length principle and provides for implementing provisions to be issued by the Ministry of Finance to align with international best practices.

Budget Law 2018 – new regime applicable to tax on blacklisted source dividends
  • Italy
  • 04 May 2018

The Budget Law 2018 introduced, among other things, amendments to the tax regime concerning dividends from non-resident companies located in low-tax jurisdictions (ie, blacklisted companies). 'Blacklisted companies' are entities resident or located in jurisdictions other than EU or European Economic Area member states, whose ordinary or special tax regime grants a nominal tax rate that is 50% lower than the Italian one.

New tax rules for dividends and capital gains realised by non-business individuals
  • Italy
  • 23 February 2018

The recently approved Budget Law has harmonised the taxation of dividends and capital gains earned by non-business individuals on substantial and non-substantial participation held in Italian and foreign companies, among other things. Companies and partnerships will be unaffected by these changes, as the distinction between substantial and non-substantial participation is irrelevant.


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