In Italy, a new decree which was published in the official gazette on 11 August 2017 modifies the existing anti-avoidance rules under the “allowance for corporate equity” regime in such a way that duplications of the tax benefit within a group of enterprises can be excluded. The new decree is particularly applicable in those situations when intra-group transactions involve non-residents and therefore cause a reduction in the amount of the allowance which is provided as a decrease applicable against net taxable income.
According to the decree, the definition of “group” is extended to include private individuals and non-resident companies.
The decree applies to intra-group transactions between both Italian and non-Italian related parties as follows:
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- Cash contributions done to group companies, made from 2011
- Controlled interests acquired from other group companies
- Acquisitions of businesses or branches of business from other group companies
- Financing delivered to other group companies, as from 1 January 2011,
Additionally, the anti-avoidance rules are also applicable to the cash contributions of taxpayers (also outside the group) resident in a country not included in the “white list” jurisdictions.
