ITALY Law and Practice Contributed by: Paolo Ludovici and Andrea Mirabella, Gatti, Pavesi, Bianchi, Ludovici
parties – the lessor is subject to a reduced cedolare secca at the rate of 10%. 1.5 Stability of Tax Laws In general, tax laws in Italy are considered stable, pro - viding a certain level of predictability for taxpayers. The main elements that currently make Italy attrac - tive to private clients are not expected to be changed or repealed in the immediate future, namely: the Flat Tax Regime, tax incentives to attract skilled workers, low inheritance and gift taxes, and the absence of a proper wealth tax (other than those discussed in 1.1 Tax Regimes ). The Statute of Taxpayers’ Rights ( Statuto dei diritti del contribuente , Law No 212 of 27 July 2000) implements the principles of democracy and transparency of the taxation system. Article 3 of the Statute states that tax provisions do not have retroactive effect and, in any case, the adop - tion of interpretive provisions in tax matters may be enacted only in exceptional cases and by ordinary law, qualifying authentic interpretation provisions as such (Article 1, paragraph 2). In general, amendments to tax provisions that grant the enjoyment of certain regimes for a certain period of time provide for a grandfathering period until the originally envisaged expiration. 1.6 Transparency and Increased Global Reporting Italy has implemented various measures in line with international initiatives, such as: • OECD Common Reporting Standard (CRS) – effec - tive since 2017, CRS allows tax authorities in con - tracting states to automatically exchange informa - tion on financial accounts held by non-residents with the tax authorities of the account holders’ countries of residence. Italian financial institutions are required to report the information to the Italian tax authorities by 30 June of each year. • Foreign Account Tax Compliance Act (FATCA) – on 10 January 2014, Italy and the United States signed an Inter-Governmental Agreement (IGA),
which was ratified by Law No 95 of 18 January 2015. Specifically, Italy signed a Model 1 IGA. The FATCA implementation decree was issued by the Italian Ministry of Economy and Finance on 6 August 2015. Italian financial institutions are required to report the information regarding US persons to the Italian tax authorities by 30 June of each year. • EU Directive DAC 6 – Italy implemented EU Direc - tive DAC 6 with Legislative Decree No 100/2020, which introduces reporting obligations for tax advisers and businesses regarding potentially aggressive tax planning schemes. • Public Registers of Beneficial Ownership (“UBO Register”) – Italy introduced public registers of beneficial ownership to improve transparency of corporate ownership and prevent money launder - ing. Trusts are among the entities subject to report - ing obligations. The Italian UBO Register became effective on 9 October 2023 but is currently sus - pended. By means of Orders No 8245 and No 8248 dated 15 October 2024, the Council of State ( Consiglio di Stato , Administrative Court of Second Instance) suspended the application of the imple - menting provisions relating to the UBO Register due to concerns regarding the conformity of Italian legislation with European Union law. The Council has referred the preliminary questions to the Court of Justice of the European Union. 2. Succession 2.1 Cultural Considerations in Succession Planning The Italian entrepreneurial environment is mainly com - posed of small/medium-sized family businesses, and the management of the generational handover is of critical importance. The family is a pivotal element of Italian entrepre - neurship, and it is important that the family shares the values and guidelines of the family business for a succession that is as smooth as possible. To this end, instruments such as “Family Constitutions” may rep - resent interesting tools to regulate the family’s found - ing values and the relationship between members and the family’s assets.
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