Italy has Published Legislative Decree No. 147 of 14 September 2015 to Implement Tax Measures. The following issues are the main corporate tax measures as per the Legislative Decree:

• As per article 3 of the Legislative Decree, Dividends directly or indirectly distributed by a company resident in a jurisdiction included in the CFC blacklist are fully taxable in the hands of the Italian recipient, unless income has been already taxed in the hands of the Italian recipient under the applicable CFC rules. This will be effective from tax year 2015.
• As per article 4 of the Legislative Decree, dividends received from non-resident controlled companies will be included in the adjusted gross operating income which is earnings before interest, taxes, depreciation and amortization, EBITDA and is relevant for the computation of the maximum amount of interest deductible, i.e. 30% of EBITDA. This will be effective from tax year 2016.
• As per article 5 of the Legislative Decree, expenses and other deductible items related to transactions between resident persons and enterprises resident in a blacklist jurisdiction are only deductible up to their fair market value and will be effective from tax year 2015.
• Under article 7 of the Legislative Decree, with effect from tax year 2016, the domestic rule providing for force of attraction of PEs is repealed. PE income will be calculated according to the ordinary rules for resident companies, on the basis of the specific financial statements prepared according to the accounting principles applicable to resident enterprises with similar characteristics.
• Under article 6 of the Legislative Decree, with effect from tax year 2015, the domestic tax consolidation regime has been extended to qualifying companies resident in Italy and controlled by an entity resident in an EU Member State or an EEA country that has signed an agreement with Italy allowing an effective exchange of information; and qualifying Italian permanent establishments (PEs) of entities resident in an EU Member State or an EEA country that has signed an agreement with Italy allowing an effective exchange of information.
• As per article 7 of the Legislative Decree, the domestic rule providing for force of attraction of PEs is repealed and is effective from tax year 2016.
• CFC legislation no longer applies to affiliated companies, i.e. companies not controlled by a resident person, but in whose profits a resident person directly or indirectly holds an interest of at least 20% (10% in the case of listed companies).