The Carried interest: Italian taxation and the verification of disposition of income

In the private equity field, the carried interest is a particular remuneration to be conferred to management and/ or employees of companies, or to companies that manage funds, that are owners of financial resources with patrimonial rights expansive. In particular, this beneficiaries have the right to obtain a proportional part of the incomes of investment.

The article 60 of the Decree Law no 50 on 24 April 2017 has been modified by Law no 96 on 21 June 2017 and, now, to the carried interest has been ascribe as financial investment. Therefore, it is possible to qualify the carried interest as a “different asset” (generally taxed at 26%), there are the following conditions: an investment with minimum amount, a deferment of carried interest distribution and a given minimum possession period.

The lack of one or more of the above conditions does not entail that carried interest maybe qualified as a employees or self employment income. It is necessary to carry out a careful analysis.

For example, it may be a financial disposition sign: (i) the suitability of the investment to guarantee a weighing the interests between investors and management, (ii) maintenance by the management of the financial resources ownership even in the event of termination of the employment relationship.

Our staff is available for any clarification.