New percentages of taxability for dividends and capital gains in Italy

The D.M. of 26 May 2017 fixes for Italy the new percentages of dividends and capital gains arising from qualifying holdings of individual businessman, commercial companies and individuals who do not carry out business activities.

The percentage of taxable profit goes to 58,14% (compared to the previous 49,72%) starting from 2017 for dividends and 2018 for capital gains.

Despite, the changes made by the legislator, there are a number of inconsistencies in the system that make investments in unqualified shareholdings cheaper than the one in qualifying holdings.

With the new provisions there is an increase in tax rates that can be “mitigated” with the use of specific structures like that of matt trust.

Indeed, a beneficiary of a mature trust who holds holdings in Italian or foreign-owned companies, has the privilege, compared to the direct qualified shareholder or holding holdings, not to discount the marginal Irpef and the additional 58.14% of the dividend, only taxing the Ires tax. In addiction, matt trust is particularly favour if it holds holdings in companies with head offices in privileged tax countries because the foreign dividend will be taxed at 24% instead of the marginal rate of Irpef.

So, the mature trust institute based in both Italy and abroad remains an excellent solution for holding and managing its Italian and foreign holdings, also obtaining a legitimate tax savings on the distribution of its profits.