ITALY Trends and Developments Contributed by: Guglielmo Maisto, Marco Cerrato, Alessandro Bavila and Stefano Tellarini, Maisto e Associati
managed by an asset manager subject to supervi - sion under Directive 2011/61/UE (AIFMD) if, amongst other things, the Italian advisory company receives an arm’s length remuneration supported by proper trans - fer pricing documentation complying with Italian law. Inheritance and Gift Tax Reform Introduction On 2 October 2024, Legislative Decree 239/2024 No 239 of 18 September 2024 (“Decree 239/2024”) was published in the Italian official gazette, provid - ing relevant changes to the existing rules on IHGT, taking effect as of 1 January 2025. The main amend - ments concern the IHGT assessment procedure, the exemption on intergeneration business transfers and the IHGT regime applicable to trusts. Reform of the IHGT assessment system Decree 239/2024 replaced the previous IHGT assess - ment mechanism – whereby IHGT was liquidated by the tax authorities based on the inheritance tax return within three years from the filing – with the introduc - tion of a self-assessment system. Under the new sys - tem, taxpayers are required to autonomously assess and pay IHGT, under their own liability, within 90 days from the deadline to file the IHGT return (ie, one year from the demise). Alternatively, heirs may opt for an immediate payment of no less than 20% of IHGT due, while spreading the residual in maximum eight quar - ter instalments (increased to 12 if the amount due exceeds EUR20,000). Reform of the exemption on intergenerational business transfers Article 3 (4-ter) of the Italian IHGT Act provides for a IHGT exemption for transfers in favour of the spouse or descendants of shareholdings in corporate entities and partnerships, as well as enterprises and branches thereof. Decree 239/2024 amended the above exemption specifying in detail the conditions applicable to each of the above transfers for the exemption to apply. In particular: • For transfer of corporate shareholdings: the ben - eficiary shall acquire a controlling shareholding (ie, in general, a shareholding representing more than
50% of the voting rights) or increase a pre-existing controlling shareholding. In this last respect, a specific reference to the “integration of the control” has been inserted overturning a prior consolidated position of the tax authorities denying the exemp - tion in relation to transfers to beneficiaries already holding more than 50% of the transferred com - pany. • For transfer of partnerships’ interests: the benefi - ciary shall maintain the ownership of the interest for at least five years. • For transfer of enterprises and branches thereof: the beneficiary shall continue the business activity for at least five years. Following the enactment of Decree 239/2024, the pro - vision literally limits the “business activity condition” to transfers of enterprises and branches of activities, whereas transfers of participations are not subject to that condition. Therefore, the issue arises as to wheth - er transfers of participations in pure passive holding companies could now benefit from the exemption, which was instead consistently denied in the past by the case law (both by the Supreme and Constitution - al Courts) and the tax authorities. However, lacking specific clarifications on this point in the preparatory reports of Decree 239/2024, even under the revised provision, the Italian tax authorities and Courts could uphold their historical position denying the exemp - tion for pure holding companies, on the ground of the “business activity condition” being implicit in the rationale of promoting generational continuity in fam - ily-owned businesses (rooted in EU Recommendation No 94/1069/EC). Lastly, Decree 239/2024 implemented a consolidated case law by the Supreme Court, by extending the exemption also to transfers involving foreign compa - nies, resident in the EU/EEA or in third states allowing for exchange of information in tax matters (under the same conditions applicable for Italian-resident com - panies). Rules on the application of IHGT to trusts With Decree 239/2024, the Italian legislator codified for the first time within the IHGT Act rules on the IHGT regime applicable to trusts, which was previously based exclusively on guidance by the tax authorities
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