ITALY Law and Practice Contributed by: Guido Alberto Inzaghi, Ivana Magistrelli, Silvia Gnocco and Gabriele Paladini, SI – Studio Inzaghi
REIFs may not directly own business activities, which are deferred to affiliates indirectly owned by the REIF. SIIQs The SIIQ regime has been adopted to introduce an investment vehicle in Italy that is similar to the REITs existing in other jurisdictions. If certain requirements are met, income from leasing real estate assets is exempt from income tax. Real Estate SICAFs A real estate SICAF, like a REIF, is an undertaking for collective investments and an AIF. Unlike the REIF, the real estate SICAF is incorporated under Italian law as a joint-stock company with fixed corporate capital. Law No 21/2024 introduced measures aimed at sim - plifying the regulation of real estate SICAFs. Under the new rules, a real estate SICAF reserved to quali - fied investors and externally managed by a regulated management company (ie, AIFM) is no longer subject The real estate securitisation scheme was introduced in Italy in 2019. It means that a securitisation vehicle may purchase real estate assets and benefit from the tax and regulatory regime applicable to the vehicles for the securitisation of receivables. From an income tax perspective, the securitisation vehicle does not own the profits of its activity and, consequently, is not subject to income taxes. The pro - ceeds of its activity must be used to reimburse the securitisation notes. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity Limited liability companies have a corporate capital divided into quotas with no face value. Joint-stock companies have corporate capital divided into shares of the same face value. to authorisation by the Bank of Italy. Real Estate Securitisation Vehicle Limited liability companies and joint stock companies are subject to ordinary corporate income tax of 24% (ie, IRES) and regional tax on productive activities of approximately 3.9% (ie, IRAP). Special rules are pro -
vided for the tax deduction of certain interest expens - es. From 1 January 2024, there are no tax incentives for equity injections. Capital gains from the sale of participation in these companies may benefit from the participation exemp - tion regime (with an effective tax rate of 1.2%) if cer - tain requirements are met. The new property-rich companies rule introduced in 2023 should be considered in cross-border invest - ment structures, with reference to the capital gains on the disposal of the participation (exit phase). REIFs and real estate SICAFs are exempt from IRES and IRAP. IRAP may apply to real estate SICAFs, but not to the proceeds from the real estate activity. Investors in REIFs and real estate SICAFs may benefit from a withholding tax exemption on profits distrib - uted by the REIF/real estate SICAF if certain require - ments are met. For example, in the case of foreign pension funds or foreign investment funds having certain features (both in the case of direct or indirect investment into REIFs and real estate SICAFs). For - eign investors may also benefit from a tax exemption on capital gains from the sale of participation in REIFs and real estate SICAFs. The real estate securitisation vehicle is not subject to IRES or IRAP on the profits realised during the secu - ritisation transaction, as it does not own the profits for tax purposes. This is because the profits must be used to repay the notes issued by the vehicle to finance the property acquisition. Non-resident noteholders may benefit from an exemp - tion from withholding tax on proceeds paid under the notes. 5.3 REITs REITs have been implemented in the Italian jurisdic - tion pursuant to Law No 296/2006 (as subsequently amended). Liquidity and diversification are among the main fea - tures of these instruments. The tax regime for SIIQs provides an advantage for direct tax purposes, con -
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