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New Tax Provisions On Common Investment Funds


As from 1st July 2011 a new tax regime involving Italian common investment funds will come into force. The new tax treatment involves the abolition of the 12.5% tax, which currently applies on an accrual basis at the Italian resident fund level, with a related transition to a tax regime based on taxation in the hands of the investors on a cash basis. Taxand Italy provides a brief overview of this development.

A 12.5% withholding will apply on income received by investors. Such withholding tax will be levied also to non-resident investors, except for investors resident in white listed countries. These rules will concern Italian common funds - other than real estate funds that are subject to a different tax regime - irrespective of their compliance with the EU Directive 2009/65. New tax rules have also been introduced with respect to tax treatment of income received by Italian investors from non-resident common funds.

Taxand's Take

The new tax provisions may have an impact on current investments flows and may require a reorganisation of certain investments structures through common funds.

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