03 April 2020 - Article
The new Italian reporting rules affect both resident and non resident trusts, trustees, settlors, beneficiaries and foundations.
The so called ‘European Law 2013’ (enforced on 4th September 2013) was adopted by the Italian legislator in order to comply with the European provisions and obligations, extending the scope of the existing reporting rules to Italian resident trusts, trustees and foundations, as well as to Italian tax residents that directly and/or indirectly own foreign assets.
In particular, it introduced the definition of ‘direct or indirect control’ and of ‘beneficial owner’ (titolare effettivo), adopting the same definition that is contained in the third Anti-Money Laundering Directive. The risks of non-compliance are self-evident, as are the risks of compliance. The new rules will put a spotlight on substantial trusts and are likely to lead to tax investigations. Therefore a thorough review is vital in any given case to ensure that the structure can withstand scrutiny.
The new rules do not apply to foreign assets that are held via qualified Italian intermediaries, to the extent that any incomes/gains are subject to tax at the source or final withholding tax (‘ritenuta o imposta sostitutiva’) in accordance with the rules that apply to assets under administration/management by Italian qualified intermediaries.
The new regulations will be applicable for tax year 2013. As such, the deadline for reporting via Quadro RW form is 30 September 2014.