The Italian Government has continued to extend and update its
white list of States and territories, adding a number of new states
to the total of more than 130 States and territories. The Decree,
published on 3 April 2017, follows the agreement of exchange of
information with these new states.
The new 'white list' now includes also:
The State of Vatican City and Monte
Carlo, which have recently reached an agreement with Italy on
exchange of information procedures (Monte Carlo has also recently
reached a specific agreement with the European Union on the so
called 'Savings directive' – Council Directive no.
The Republic of Chile, that has
recently reached an agreement with Italy for the avoidance of
double taxation based on the OECD model (that also includes
standard exchange of information procedures),
Jurisdictions that recently signed the
OECD multilateral convention on exchange of information (of which
Italy is party), such as Andorra, Barbados, Narau, Niue, Saint
Kitts and Nevis, Saint Vincent and Grenadine, Samoa and
This update to the white list follows the previous one in August
2016 (which included other key jurisdictions such as Hong Kong,
Taiwan, Channel Islands, Switzerland, etc.) and confirms the
Italian tax administration's commitment to attracting foreign
investments (in fact, applicable laws require that this white list
is to be updated every six months).
Tax exemptions on financial instruments deriving from the White
The Italian white list has a great impact on foreign investments
into Italian entities as investors based in a State or territory
included on the list fall within the scope of several exemptions
from Italian withholding/substitutive taxes (generally applied at
the 26% rate), mainly on financial incomes, such as the
interest deriving from certain
security lending transactions;
interest deriving from certain
medium/long term loans to Italian enterprises;
proceeds deriving from investments
into Italian investment funds;
interest deriving from bonds issued
by the Italian Treasury, by Italian banks or listed companies and
capital gains arising from several
Italian securities (including 'non-qualified' shares of
Italian companies and obligations held in Italy).
Finally, with particular regard to investments into Italian
investment funds, the new white list simplifies the most common
investment structures based on the recent AIFM EU Directive.
The entitlement to the aforementioned exemptions remains subject
to several subjective and procedural conditions that Italian
withholding agents still have to carefully assess (e.g. beneficial
The effects of such amendments to ongoing investments will have
to be carefully assessed and will require some clarifications from
the Italian tax authorities (since tax exemptions are often also
granted on an accrual basis).
Focus on Monte Carlo
The addition of Monte Carlo to the Italian white list from
August 2016 is to be welcomed from investors' perspectives,
such as high net worth individuals currently living in the
Nonetheless, it is worth mentioning that Monte Carlo still:
remains 'black listed' for
Italian citizens willing to transfer their residence to the state
(i.e. they will be deemed as resident in Italy for tax purposes
unless they prove their actual residence in Monte Carlo),
may fall within the Italian CFC
rules, due to its generally low level of taxation on business
activities (unless exonerating evidence is provided).
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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