On 26 May 2017, the Italian Ministry of Economic Affairs and Finance adopted a Decree which establishes a new percentage of capital gains and losses achieved by non-resident taxpayers from the transfer of ‘qualifying’ shares in Italian companies and included in taxable income of the seller for the purposes of the Italian corporate income tax (IRES).
According to the Decree, the previous percentage of 49.72 will be increased to 58.14 and will be applicable to capital gains and share since 1 January 2018. This increase in the taxation of the shareholder is designed for the purpose of offsetting the decrease in the IRES rate (from 27.5% to 24% since fiscal year 2017) for the “investee” company.
However, for capital gains from the transfer of ‘non-qualifying’ shares, the current rate of 26% substitute tax will apply and if the seller is a resident of a white-list country, exemption will apply.
Also, if an income tax treaty applies, capital gains are usually taxable only in the seller’s country of residence and, therefore, are not subject to tax in Italy.