EXCHANGE OF EQUITY INVESTMENTS THROUGH CONTRIBUTION
A contribution under the special tax scheme pursuant to section 177 (2) of the Italian Tax Code (TUIR) - whereby the value realisable by the transferee is given by the net equity increase made by the transferor due to the contribution (realizzo controllato) - occurs only if by comparing
- the fiscally recognized cost of the contributed equity investment, and
- the transferor's share of net equity increase,
the transferee achieves a capital gain. However, in the event of capital losses, the general "fair value" principle under section 9 Italian Tax Code (TUIR) applies (Italian tax authority, Principio di diritto n. 10 as of 28 July 2020).
The contribution pursuant to the new section no. 177 (2-bis) of the Italian Tax Code (TUIR), that extended the special tax scheme (realizzo controllato) to contributions of qualified equity investments (20 percent or 25 percent), applies only if such contribution is made to a sole shareholder holding company. Hence, the special tax scheme does not apply, if there are several transferees and neither in the event of a joint contribution (Italian tax authority, answer to advance ruling no. 314 and no. 315 as of 7 September 2020 and no. 309 as of 4 September 2020).
APPROPRIATION OF INCOME COMPONENTS FURTHER TO A JUDGEMENT
Positive income components of micro-entities arising from a favourable decision are fiscally relevant in the tax period in which the judgement is legally issued (notwithstanding the further requirement of determinability). Indeed, neither the date on which the ruling becomes final (res judicata effect) nor the course of the proceedings are relevant for tax purposes, since a tax-deductible contingent liability would arise, if the decision is amended by higher courts.
However, the tax period of appropriation for entities other than micro-entities must be identified based on the correct charging of the item in the financial statements. To this end, the Italian accounting principle OIC 15 provides as follows: <<Claims arising from transactions other than the sale and purchase of goods and services (e.g. financing transactions) must be recorded in the balance sheet, if there is a legal title for the claim, i.e. if they actually form a third-party obligation vis-à-vis the company>>. Hence, it is not required that the obligation is unchangeable (Italian tax authority, answer to request for advance ruling no. 9 as of 4 August 2020).
STOCK OPTION TAX LIABILITY
Income from employment in the form of stock options is subject to tax in Italy, if it is derived from an activity carried out in Italy or if the employee worked in Italy at the time of accrual of the right (so-called "vesting period"). In this respect the fact it is irrelevant that the employee is not resident for tax purposes in Italy and does not work in Italy any more at the time of exercise and attribution of the shares (Italian tax authority, answer to request for advance ruling no. 316 as of 7 September 2020).
SALE OF A BUILDING TO BE DEMOLISHED
The sale of a building, including the appurtenant land, to a construction company that intends to demolish and rebuild the building, based on a building permit still to be obtained, does not form a sale of land as future development land, but a sale of a building. Hence, any different interpretations previously released have become obsolete (Italian tax authority, answer to request for advance ruling no. 312 as of 4 September 2020).
SALE OF A BUILDING STILL TO BE COMPLETED
The sale of a property under construction is deemed a sale of a good still to be included in the production cycle and, hence, "uncompleted". As a consequence, the sale is subject to VAT, whereas mortgage and land register fees are due at a fixed amount. This clarification seems to be in contrast with the interpretation given by the Italian Supreme Court, according to which reference must be made not to the objective state of the property, but to the purchaser's subjective position in order to establish whether a property can be deemed "uncompleted" (Italian tax authority, answer to request for advance ruling no. 241 as of 3 August 2020).