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“Home State Taxation” Measures For Foreign Entities In Italy


Following a new provision introduced by Italian law, foreign entities establishing a new activity in Italy stand to benefit from the application of the tax rules of one of its EU countries, dependent on certain conditions. Taxand Italy provides a brief overview of the new law.

According to the new law, companies with seats in one of the EU countries which start new economic activities in Italy, including their employees, are entitled for a 3 year period to the tax legislation of one of the EU member states. Such activities must be new (i.e., not already performed in Italy by such foreign entities). Recent amendments have also included the holding and direction of activities in the concept of economic activities that could be entitled for the new regime.

The Ministry of Finance has recently issued a draft of the Decree to open a public discussion of its content and measures before the final Decree itself is enacted.

Taxand's Take

The new tax provisions may have an impact on future investments as it may allow companies with an EU residence to continue to apply for their home state taxation rules.

Your Taxand contacts for further queries are:
Guido Arie Petraroli
T. +39 02 7260591

Alberto Alfredo Ferrario
T. +39 02 7260591

Taxand's Take Author