In the question time of the Finance Commission, the Italian Ministry of Economy and Finance with answer no. 5-02060 of February 27, 2024 has clarified that the new exemption regime applicable to dividends paid to UCITS, and alternative investment funds established in the European Union (EU) or in the European Economic Area (EEA), with a supervised manager, is applicable to profits paid starting from January 1, 2021.
The domestic rules on the withholding tax applicable to dividends paid by Italian companies and distributed to non-Italian investment funds are governed by Article 27(3) of Presidential Decree no. 600 of 1973, which generally provides for the application of a 26% withholding tax (or a substitute tax in the case of shares or other similar financial instruments placed in central securities depository; in this respect, please refer to the exception under Article 27-ter of the same Decree).
The above-mentioned regime was “recently” amended by Article 1, paragraphs 631-633 of Law no. 178 of December 30, 2020 (Budget Law 2021), extending the exemption regime provided for dividends paid to Italian investment funds also to EU and EEA UCITS and alternative investment funds with a supervised manager.
In this regulatory scenario, lacking precise official clarifications of the Italian tax authorities, there has been uncertainty (up to date) among professional operators as to the temporal element to be taken into consideration for the application of the new (and more favourable) provisions (such as e.g. the period of formation of profits, the date of establishment of the funds, etc.).
Good news: according to the Italian Ministry of Economy and Finance, the new exemption regime for dividends paid by Italian companies to EU and EEA qualified UCITS and alternative investment funds, with a supervised manager, is applicable to profits paid as from January 1, 2021, in line with the provisions set forth by paragraph 632 of Article 1 of the Budget Law 2021.
Therefore, pay attention!: the new exemption regime introduced by the Budget Law 2021 does not take into account neither the period of formation (accrual) of profits nor the date of the relevant distribution resolution. Also the date of the fund’s establishment is not relevant.
DISCLAIMER: This newsletter merely provides general information and does not constitute legal advice of any kind from Macchi di Cellere Gangemi. The newsletter does not replace individual legal consultation. Macchi di Cellere Gangemi assumes no liability whatsoever for the content and correctness of the newsletter.