DIGITAL SERVICES TAX
The Italian tax authority provides clarifications on the digital services tax pursuant to section 1 (35-50) of Law 145/2018 and, more specifically, on the procedures for verifying the threshold exceedances, the concept of group, the digital services subject to tax and the excluded services, the calculation methods of the taxable base and the geolocation methods for the purposes of determining the taxable income. Moreover, the taxpayers' obligations are outlined, with particular regard to the identification, bookkeeping, payment, reporting and request for reimbursement (Italian tax authority, newsletter no. 3 as of 23 March 2021).
USE OF TAX LOSSES AND NID EXCESS UNDER THE TAX CONSOLIDATION SCHEME
Under the tax consolidation scheme, in case of tax credits, previous year's losses and NID excess first the tax credits, then the tax losses and only subsequently the NID excess shall be taken into account; any NID excess not transferred to the group because of a "shortfall" may be transferred to the consolidated company in the following tax periods (Italian tax authority, principio di diritto no. 7 as of 23 March 2021).
TAX LOSSES AND NID EXCESS ALLOCATION UNDER THE DEMERGER SCHEME
In the event of a demerger, tax losses shall be allocated between the involved companies in proportion to the book net equity pursuant to section 173(4) of Italian Tax Code (TUIR). Hence, tax losses shall not be analytically attributed to the company to which, following the demerger, the business branch that had produced tax losses has been assigned.
Moreover, in the event of a demerger, also the NID excess shall be allocated between the demerged company and the beneficiary company in proportion to the book net equity remaining in the former and transferred to the latter respectively (Italian tax authority, answer to request for advance ruling no. 129 as of 2 March 2021).
WITHHOLDING TAX ON DIVIDENDS
The withholding tax exemption on dividend payments between subsidiaries provided for by the Bilateral Agreement between the EU and Switzerland shall apply also to Swiss holdings which, as of 1 January 2020, are no longer subject to favorable tax schemes but are subject to federal, cantonal and municipal taxes instead (Italian tax authority, answer to request for advance ruling no. 135 as of 2 March 2021).
PROPERTY MANAGEMENT INCOME SECURITISATION COMPANY
For "immovables and registered movables securitisation companies" pursuant to law 130/1990:
- any tax period differences connected with temporary misalignments between the cash flows of the securitised assets (i.e. any sums deriving from their assets and rights) and the income payments to subscribers do not add to the taxable base for Italian corporate tax (IRES) purposes;
- however, any income from the management of the portfolio of remaining assets and rights after all creditors of the segregated assets have been paid off adds to the taxable base for Italian corporate tax (IRES) purposes pursuant to section 83 of Italian Tax Code (TUIR).
For the purposes of Italian regional tax on productive activities (IRAP):
- any differences pursuant to point (a) above do not add to the net production value as they are not recorded in the profit and loss account;
- however, any income pursuant to point (b) above adds to the net production value, insofar as it is available to the special purpose vehicle and recorded in the profit and loss account under the relevant item for IRAP purposes (Italian tax authority, answer to request for advance ruling no. 132 as of 2 March 2021).
As far as the taxation of interests and other income from securities issued in the course of securitisation transaction is concerned, the provisions pursuant to Italian legislative decree 239/1996 shall apply.
RETIREMENT PENSION SUPPLEMENTS PROVIDED BY A GERMAN PENSION FUND IN FAVOUR OF AN ITALIAN TAX RESIDENT
Retirement pension supplements provided by a German pension fund in favour of an Italian tax resident are subject to taxation in Italy according to the laws of Italy and to the Double Taxation Agreement between Italy and Germany (Italian tax authority, answer to request for advance ruling no. 137 as of 2 March 2021).
The rights of worldwide use and economic exploitation of an artist's image rights in relation to the performance of an actor in a film shot in Italy are subject to taxation in Italy.
In this case, the place where economic exploitation of the image right takes place is irrelevant (Italian tax authority, answer to request for advance ruling no. 139 as of 3 March 2021).
DIFFERENCES FROM SHAREHOLDER WITHDRAWAL
The sums paid by the company to the shareholder in case of withdrawal (in exchange for the recognition of any higher economic value of the company upon dissolution of the relationship with the company compared to the book values of the assets) are deductible for the company in the fiscal year in which the shareholder withdraws (Italian tax authority, answer to request for advance ruling no. 156 as of 5 March 2021).
FREE REVALUATION OF BUSINESS ASSETS
The free revaluation of hotel business assets pursuant to section 6-bis of Italian Decree Law 23/2020 also applies to company which granted the business branch for lease, if the parties have agreed that the lessor continues calculating the amortisation (Italian tax authority, answer to request for advance ruling no. 200 as of 23 March 2021).
INCOME FROM EMPLOYMENT RECEIVED FURTHER TO A JUDGEMENT
The indemnity paid additionally or alternatively in order to compensate the lack of income shall be subject to taxation (so-called loss of profit).
However, the compensation paid to indemnify the employee for the losses actually suffered (so-called actual loss) shall not be subject to taxation since in this case the compensatory aspect of the damage suffered by the injured person is relevant and there is no substitute or supplementary function of any remuneration.
According to the above principles, the sums paid further to a Court judgement in order to "compensate the plaintiff for the damages suffered" shall be taxable, if they are calculated on the basis of the legal and economic remuneration provided for by the Italian collective agreement and, hence, do not aim at compensating for an actual loss, even if they are estimated on an equitable basis (Italian tax authority, answer to request for advance ruling no. 222 as of 29 March 2021).
"DISCOUNT CARD" FOR EMPLOYEES
The card granted to employees for the purchase of the company's products at a price corresponding to the normal value net of any discounts is not relevant for tax purposes and does not add to the taxable income of the employee (Italian tax authority, answer to request for advance ruling no. 221 as of 29 March 2021).