The Italian Government Approves Tax Reform Legislation – Highlights

On April 21, 2015, the Italian Government, as part of a comprehensive tax reform which it was empowered to enact pursuant to Law of March 11, 2014, no. 23, approved draft legislation (in the form of three draft legislative decrees) introducing new rules encompassing areas that go from abuse of law to international tax and VAT electronic invoicing. This draft legislation will be shortly transmitted to the Parliamentary Commissions which are enabled to express their opinion thereon and, thereafter, will be remitted to Government for its final approval, expected to occur by the end of June.

This memo briefly illustrates some of the major developments and, in particular, those material to foreign investors and to businesses having international operations.

As a general and preliminary remark, it is worth immediately noting that, in line with the principles set forth in Law no. 23/2014, these rules aim principally at providing certainty to taxpayers in complying with their tax obligations and in their dealings with the tax administration. This is definitely a much awaited and favorable development that, coupled with the reform of the tax criminal system expected to be approved in June, should address widespread concerns about the Italian tax environment being unduly complex, difficult and hostile and, as a result, inherently and unreasonably risky compared to other marketplaces.

Should you have any questions with respect to these recent Italian tax developments, please not do hesitate to contact Vania Petrella or Paola Albano in the Rome office, Gianluca Russo in the Milan office, or any of your regular contacts in the Tax or other practice groups at the firm.