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Newsalert
23 July 2014
EU Direct Tax Group
Italy – New exit tax provisions on transfer of
residence after the recent development of the CJEU
case law
EU Direct Tax Group
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and private persons to help them to fully benefit
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Claudio Valz
PwC Italy
+39 0291605831
[email protected]
Luca la Pietra
PwC Italy
+39 0291605848
[email protected]
Gabriele Colombaioni
PwC Italy
+39 0291605837
[email protected]
On 2 July 2014 (effective as from 8 July 2014)
the Italian Ministry of Finance issued a
decree that introduces new exit tax provisions
and repeals the decree issued on 2 August
2013 ( see EUDTG Newsletter Issue 2012 n.
oo2 and EUDTG Newsletter Issue 2013 n.
oo5).
taxpayers may spread the payment over a
period up to 10 years; the new decree
reduces such period to 6 years.
Third, the original provisions allowed
taxpayers to select some of the assets
transferred and, then, opt for the deferment
or the spread payment only over the capital
In 2010 the European Commission started an
gain relevant to those assets. Such
infringement procedure against Italy arguing
possibility has been eliminated by the new
that its exit tax provisions on transfer of
residence were not in line with the case law of decree.
the CJEU. Due to such procedure, in January Fourth, the new decree establishes that
2012 Italy modified its legislation introducing
interests are due in both the options
the possibility to either defer the payment of
(deferment and spread payment).
the exit tax until the realization of the assets
transferred abroad or spread the payment of Finally, in an act issued on July 10, 2014,
the tax. Such provision was implemented by the director of the Tax Authorities specifies
the decree issued on 2 August 2013. The new what guarantees are due in case of option
decree issued on July 2nd 2014 repealed the
and what monitoring duties the taxpayers
latter and introduces several significant
are required to comply with.
amendments to the exit tax provisions that
capitalize on the new principles laid down
As for the guarantees, the act establishes
recently by the CJEU ultimately in the DMC that the obligation to provide the guarantee
case (C-164/12).
shall be evaluated, on a case by case basis,
by the tax authorities in light of the
First, the original provisions allowed
financial risk featured by the taxpayer. If
taxpayers to opt for the deferment of the exit
tax ad infinitum. The new decree repeals such the guarantees are actually due, they shall
option and introduces a “deemed realization” be provided for an amount equal to the exit
rule. In particular, under the new decree, the tax deferred less the equity of the company.
capital gains on the assets transferred abroad Furthermore, the act provides for an
are deemed realized:
exemption to the duty to provide the
guarantee if, in all the three fiscal years

to the extent that the relevant assets before the transfer, the transferring
are amortized, in case of amortizable company did not accrued any loss and the
assets;
value of the equity reported in the balance

in case of dividend distribution, in
sheet was equal to the 120 per cent of the
case of participation;
tax deferred.

when the relevant assets are
disposed of, for all the other assets; As for the monitoring duties, the act

in any case, after 10 years from the specifies that the taxpayers shall keep track
option for the deferment.
of the value of the assets transferred and, at
the end of each fiscal year following to the
Second, as an alternative to the deferment,
transfer, shall file a tax return with the
taxpayers may opt for the payment spread of
information relevant to the tax deferred.
the exit tax. Under the 2013 provisions,
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