Italy: news about dividend taxation from “black list” countries

The Italian Finance Bill Law 2018 amended the methods for the taxation of dividends from countries or territories with a privileged regime for all the IRES subject (companies, entities, etc.) which can demonstrate the first exempt ex art 167 TUIR.

Dividends received by IRES subjects  from subsidiary companies resident in blacklist countries are not taxable for the 50% if the effective execution, of an industrial or commercial activity by the non-resident subject is demonstrated, as the main activity in the territory in which it is established.

 There is still the possibility, for the Parent Italian company, to obtain a tax credit on the profits gained during the period of possession of the subsidiary, in relation to the taxable part of the profits achieved (50%) and within the limits of Italian tax on these profits.

The new tax exemption is in addition to the ordinary tax forecast (exemption of 95% of the dividends received from white list subsidiaries) and to the full taxation for the subsidiary companies in blacklisted countries in which it is not possible to demonstrate any exemption ex Article 167 TUIR.

Our staff is available for further clarification.