BLOG

Article 1 para. 59 of Law No. 213 of 30 December 2023 (Budget Law 2024) introduces paragraph 2-bis to Article 68 of Presidential Decree No. 917/1986 (TUIR) providing for the extension of the participation exemption rules to capital gains deriving from the transfer of qualified participations, having the same requirements applicable to resident entities, made by foreign companies (i) without a permanent establishment in Italy, (ii) resident in an EU or EEA State that allows for a proper exchange of information and (iii) subject to corporate income tax.

With ruling No. 3755, filed on 20 December 2023, the Superior Tax Court of Lombardy confirmed the decision ruled on by the trial court (ruling No. 3361 filed on 5 December 2022) on the VAT deductibility paid by a Special Purpose Vehicle (SPV) on transaction costs (notary fees, consultancy, due diligence, etc.) incurred in connection with a Merger Leveraged Buy-Out (MLBO) transaction.

According to the literal wording of the rule, “The provisions of this Article shall apply in favour of persons who transfer their tax residence to Italy starting from the 2024 tax period […]” and, similarly, the previous regime is still applicable “[…] in favour of persons who have transferred their registered residence to Italy by 31 December 2023 […]”.

Article 9, paragraph 1, letter b), numbers 1) and 2) of the Enabling Act for Tax Reform has provided for a substantial change to the regulation of shell companies, in order to bring the rule back to its original purpose

Article 16 of the 2024 Budget Law, currently in drafting phase, extends the participation exemption rules also to capital gains deriving from the transfer of qualified participations