ITALY Trends and Developments Contributed by: Giuliano Foglia, Foglia & Partners
Incentives for innovative start-up companies Ad hoc provisions are provided to foster investments in innovative start-up companies engaged in genu - inely innovative activities or projects and meeting a minimum threshold of research and development expenditures. In particular, individuals and entities that invest in start-up companies can deduct a portion of their investments from their taxable income. Moreover, capital gains realised by individuals on participations held in start-up companies are exempt. Reshoring regime Within the broader framework of the Italian tax reform, the Italian Government has introduced a favourable regime aimed at fostering the transfer to Italy of eco - nomic activities carried out in non-EU/EEA countries (so-called “Reshoring”), providing for a five-year (10- year, in the case of large enterprises) 50% tax deduc - tion on the income deriving from the economic activi - ties transferred to the Italian territory. The effectiveness of the regime is suspended, subject to the (still pending) authorisation by the EU Commis - sion. Advance Certainty The Italian tax system offers foreign-resident investors (both individuals and entities) a wide variety of instru - ments to seek advance certainty on the interpretation and application of specific tax regimes and provisions. Ordinary tax rulings The ordinary tax ruling programme provides certainty, in relation to actual cases described by the taxpay - ers, on: • interpretation of the tax law (“interpretative ruling”); • qualification of specific cases in relation to the applicable tax provisions (“qualification ruling”); • whether a specific transaction could be considered abusive (“anti-abuse ruling”); • disapplication of specific anti-avoidance rules (“disapplication ruling”); • existence of the conditions required by the law for the application of specific tax regimes (“probatory ruling”); and
• existence of the conditions required by the law for the application of the Flat Tax Regime. A probatory ruling can only be requested by taxpayers under the cooperative compliance regime or by tax - payers that have already applied for the new invest - ments ruling. Since 2024, filing a ruling request has, in principle, been subject to a fee. As of today, absent any imple - menting rules, no fee is required. Depending on the domicile, nature and size of the applicant taxpayer, the ruling request is processed by either the central bodies or by the competent Regional Directorate of the Italian Revenue Agency. An answer to the ruling request must be provided within 90 days, with the possibility of extending the term by an additional 60 days if a request for addi - tional information or documentation is made. If the Italian Revenue Agency does not answer within the prescribed term, the ruling request is considered con - firmed. The ruling binds both the Italian Tax Authorities and the specific taxpayers(s), provided the relevant laws, facts and circumstances remain as represented. “New investments” ruling The Italian system also provides a specific instrument for foreign investors seeking investment opportunities in Italy. In particular, taxpayers can apply for the new investments ruling in relation to intended new invest - ments that have the following characteristics: • be realised in the Italian territory; • have a value of at least EUR15 million; and • have a beneficial and long-lasting impact on employment and tax revenues. The new investment ruling provides advance certainty on the tax regime applicable to the overall investment, covering both matters normally covered by ordinary tax rulings and more factual issues (eg, existence of a permanent establishment in Italy).
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