Law Decree No. 91 of June 24, 2014, converted into law by the
Italian Parliament on August 7, 2014, has broadened the scope of
the withholding tax exemption applicable to eligible nonresident
investors (i.e., investors resident in a white-listed country and
with no permanent establishment in Italy) on certain debt-like
Before the enactment of the new rules, nonresident holders could
benefit from a withholding tax exemption on interest paid on the
Bonds, bond-like securities, and commercial papers that were
issued by Italian-resident banks, regardless of whether these
securities were listed on a regulated market;
Bonds, bond-like securities, and commercial papers, whether
listed or not, that were issued by resident companies whose shares
were traded on regulated markets or multilateral trading facilities
of an EU Member State or an EEA country included in the Italian
white list (i.e., Iceland and Norway); and
Bonds, bond-like securities, and commercial papers that,
although issued by nonlisted resident companies, were listed on a
regulated market or a multilateral trading facility of an EU Member
State or an EEA country included in the Italian white list (i.e.,
Iceland and Norway).
The Law Decree has added a new item to the list of
exemptions—interest on bonds, bond-like securities, and
commercial papers issued by nonlisted resident companies will be
exempt from Italian withholding tax if the security holder is a
"qualified investor" under article 100 of the Italian
Unified Financial Act (e.g., banks, broker-dealers, investment
funds, pension funds, etc.), regardless of whether the security is
listed. It is not clear whether the exemption is available only in
the event the entire bond issuance is subscribed to by
Finally, the Law Decree has introduced a blanket withholding tax
exemption that applies to interest deriving from any type of bond,
bond-like security, and commercial paper and paid to undertakings
for collective investment, whether set up in Italy or in another EU
Member State, if: (i) their units are entirely held by
"qualified investors"; and (ii) more than 50 percent of
their assets are the aforesaid debt securities and commercial
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Cyprus Tax Department recently issued Forms T.D 38, T.D 38Qa and T.D 38Qb applicable to individuals being Cyprus tax residents but non-Cyprus domiciled.
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