On 27 December 2021, the Italian Revenue Agency (IRA) has issued the publication of Circular No. 18/E, that provides guidance regarding the regulations for controlled foreign companies (CFCs) as amended by Article 4 of Legislative Decree No. 142/2018 for the implementation of the EU Anti-Tax Avoidance Directive (ATAD).
The circular letter No. 18/E provides clarifications on the subjective and objective requirements to apply the CFC regime, the control requirements, the process to compare the foreign taxation with the Italian virtual taxation, the exemption for non-application of the tax legislation, the tax of the controlling entity, and the CFC regime in cases of extraordinary transactions, and other matters.
