The Italian tax authorities with Answer to ruling no. 7 of January 12th, 2024 confirmed (in accordance with the consolidated jurisprudence of the Court of Cassation and the precedent and similar administrative clarifications provided with Answer to ruling no. 310/2019) that the donation of foreign deposited sums effected via wire transfers from a non-Italian bank account in favour of a taxpayer resident in Italy is not subject to gift tax in Italy.
The case object of the ruling involves a taxpayer resident for tax purposes in Italy that intends to receive from a Swiss citizen a donation of considerable amount of money to purchase a property in Italy.
The plan: the donor will effect a wire transfer (from a bank account in Switzerland) of the relevant sums requested by the beneficiary for the purchase of the property to the bank account of the beneficiary in Italy.
The matter is not new in Italy, considering that both the jurisprudence of the Court of Cassation (with decision no. 8175/2021 and decision no. 9780/2023) and the Italian tax authorities (with Answer to ruling no. 310/2019) have already clarified on this point, although in a general way.
Despite the previous clarifications provided, the taxpayer still asked the Italian tax authorities whether the money deposited in (and to be donated by a non-resident person from) a Swiss bank account qualifies as money “existing” in Italy.
Good news!
According to Article 2 of Legislative Decree no. 346 of 1990 (Inheritance and Gift Taxes Code), the gift tax is applicable:
- to all assets and rights transferred by donation, even if existing abroad, if the donor at the time of the donation was an Italian resident;
- limited to assets and rights existing in Italy if the donor was resident abroad at the date of the donation.
Therefore, given that in the present case the donor was not resident in Italy, the question arises whether the transferred money can be considered as “existing” in the territory of the State pursuant to Article 2, paragraph 3, of Legislative Decree no. 346 of 1990.
The Italian tax authorities take the chance to clarify that, in the case at hand, “the donated money (…) exists abroad” because “before the donation by wire transfer” it was deposited in a bank account located in Switzerland. Therefore, the application of the gift tax in Italy shall be excluded due to the absence of the territorial requirement. Attention!: please note that Article 55-bis of Legislative Decree no. 346 of 1990 provides in any case that deeds regulating donations, direct or indirect, even effected abroad to beneficiaries resident in Italy are subject (albeit without payment of the gift tax) to registration in Italy.
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