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Italy Includes New Countries in Its “White List”

Italy Includes New Countries in Its “White List”

Italy August 2016 includes new Countries in its “White List”

Following the Decree of 9 August 2016 (published on 22 August), the list of Countries or territories which allow the exchange of tax information with Italy (the so called “White List”) has been increased from 73 to 123 members, now also including the Countries or territories which have executed agreements for the exchange of tax information with Italy, even in the absence of a double tax treaty.

Overview thus be exempt from Italian taxation with respect to income (generally interest) earned Following a Decree from the Ministry of from certain financial instruments (i.e., those Economy and Finance dated 9 August 2016 subject to the tax regime provided for by (published on the Official Gazette no. 195, Legislative Decree no. 239/1996). dated 22 August 2016), Italy has introduced a new “White List”, which replaces the one The application of this White List has been provided by Ministerial Decree dated 4 extended to other domestic exemptions (e.g., September 1996 (as amended from time to various capital gains realized by non time). residents) and to other tax provisions and/or beneficial regimes (e.g., domestic tax The list of Countries or territories which allow treatment of income distributed by foreign an adequate exchange of tax information with funds, Controlled Foreign Companies rules, Italy has been increased from 73 to 123 ACE – i.e. the notional interest deduction members, now also including Countries or regime -, etc.). territories which have executed agreements With reference to real estate investments, and for the exchange of tax information with Italy namely those made through Italian Real complying with OECD standards, even in the Estate Investment Funds (REIFs) and real absence of a double tax treaty. In particular, estate SICAFs, it is worth noting that the this is the case, for: , Cook qualification of a foreign subject as an Islands, Guernsey, , and “institutional investor” (as defined for the Jersey. (The complete new Italian White List purpose of the REIF legislation, to treat the is given below.) REIF as an “institutional” fund, thus

benefiting from some simplifications), Background requires that the foreign institutional investor The Italian White List was originally is either set up or resident (dependent on its introduced in 1996 to set out the Countries form) in a Country included in the White List allowing an adequate tax information (in addition to meeting other criteria). exchange with Italy and whose residents could 2 PwC Real Estate Tax Services NewsAlert Italy - August 2016

Moreover, the domestic tax exemption Our view provided with respect to Italian REIF profit distributions is granted to foreign pension The Italian tax system refers to the White List funds and foreign “Organismi di for the purpose of several exemptions and Investimento Collettivo del Risparmio” (i.e., other tax provisions. Therefore, the collective investment vehicles), provided they enlargement of the White List may offer more are set up in a Country on the White List and opportunities to access such beneficial are managed by subjects resident in a White regimes. List Country. However, the following should be considered: (as per The New Italian White List - the Decree does not provide specific rules Decree 9 August 2016) regarding the timing of the application of Albania , the new White List, particularly for the Alderney Oman newly inserted Countries; according to Anguilla Gibraltar ordinary rules, the Decree should be Pakistan th effective from the 15 day following its Armenia Greenland publication and the inclusion in the List Guernsey Herm should be relevant for events thereafter; Austria Slovak Republic - the Decree explicitly states that, in the San Marino case of repeated violations of the Isle of Man Serbia obligation of administrative cooperation Belarus Cayman Islands Seychelles between the competent Authorities, the Bosnia and Herzegovina Sint Maarten relevant Country or territory will be Turks and Caicos Islands Syria removed from the list. Therefore, the Cameroon British Virgin Islands White List status may change if the Jersey Kazakhstan United States of America exchange of tax information with the Kyrgyzstan foreign Country ceases to be effective and Congo (Republic of Congo) adequate. Tajikistan Costa Rica Liechtenstein Taiwan Curacao Macedonia Turkmenistan Uganda Russian Federation Moldova Montenegro Uzbekistan Montserrat Zambia

The newly inserted Countries or territories are coloured

3 PwC Real Estate Tax Services NewsAlert Italy - August 2016

For more information, please contact your local PwC real estate tax service provider or one of the contacts below.

Global Nationally Uwe Stoschek Italy Global Real Estate Tax Leader +49 30 2636 5286 Daniele Di Michele [email protected] +39 02 91605.002 [email protected]

EMEA Marco Vozzi Jeroen Elink Schuurman +39 02 91605.011 Regional Real Estate Tax Leader [email protected] +31 88 792 64 28 [email protected] Alessandro Caridi +39 02 91605.003 Americas [email protected]

David Voss Fabrizio Acerbis US Real Estate Tax Leader Country TLS Leader +1 646 471-7462 +39 02 91605.004 [email protected] [email protected] AsiaPacific

KK So Regional Real Estate Tax Leader +852 2289 3789 [email protected]

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