Tax Pills

Italy's branch exemption new scheme ready| to meet next year corporate income taxes
immagine generica illustrativa
New rules apply only to real permanent organizations, while Oecd criteria will guide the calculation of significant foreign profits and losses.
Everything is ready for the start of the new branch exemption scheme sized for Italian companies with a permanent overseas organization. On 28 August 2017, in fact, the Italian Revenue Agency published an ad hoc Statement of Practice, or Provvedimento del Direttore dell'Agenzia delle Entrate, on its website containing further clarifications aimed at implementing the new fiscal regime. Particularly, the Statement has defined modalities and criteria to follow for the correct implementation of the scheme companies can opt for, envisaging the exemption of income and eventual losses arising from their permanent organizations, as provided by Article 168-ter of the Italian Income Tax Code - IITC.
What is the branch exemption and what it does for businesses - The Legislative Decree n. 147/2016, aimed at encouraging the growth and internationalization of companies, introduced the "Branch Exemption" fiscal regime to align the Italian tax system with that of other developed countries. In short, under the new Article 168-ter of the Italian Income Tax Code, as of 2016, resident enterprises may opt for an exemption regime for the profit and losses of their foreign permanent establishments, Pes, as an alternative to ordinary taxation with tax credits.
The option fiscal calendar - The regime can be opted for in the yearly tax return related to the opening period of the foreign affiliate, whilst for the branches already on track before 31 December 2016, the option can be finalized the 2018 tax return, with effect ranging from the 2017 tax period. Particularly, is important to remember that the option must be exercised for all the foreign Pes of the resident company according to the principle "all or nothing". However, opting for the regime for the PE that was established first automatically binds any other PE established later, without the need to opt for the regime for each.
Determination of the income exempted - The income of an exempt PE is determined based on the profits and losses attributable to the PE itself in accordance with the provisions of the Double Tax Treaty in force between Italy and the state in which the PE is established. Even in the absence of a DTT, profits and losses are attributed and the endowment fund is determined in accordance with Oecd criteria and technical principles. Therefore, the PE must be viewed as a separate entity, carrying out the same or similar activity under the same or similar conditions, taking into account results obtained, risks assumed and assets used. As a result, profits and losses arising from exempt foreign branches are not included in the resident company's taxable income.
Tax ruling - The Revenue Statement confirms the possibility to obtain a binding ruling from the Italian Revenue Agency on the existence of a PE of a resident company abroad. Such a ruling will be based on the information and documents submitted by the company itself in the standard ruling request.

It’s operative the easy-to-define online new Revenue service to resolve pending tax disputes without interest and penalties
Applications for the definition of tax disputes in which the Agency is part can be sent directly through the Revenue digital services platform. The new online "DCT" application is in fact available on the Agency’s official website, Particularly, it allows all taxpayers interested to fill in and submit, by October 2, 2017, an ad hoc submission to define eventual tax disputes still pending on court. However, in order to submit their applications, interested parties must have already access to their respective private area of ​​Entratel or Fisconline channels. At that point, once entered the "Services for> Request" section, they just have to use the "Request for Defined Tax Disputes (Article 11, DL 50/2017)” in order to fill out and send the application.
The open deadline for defining pending tax disputes - By 2 October 2017, all taxpayers concerned must submit the application and pay the full amount or the first installment in the case of installments of more than two thousand euro. If there are no sums to pay, the definition is simply perfected by sending the application electronically.
What can be defined, all except controversies having the EU as interest-connection - This opportunity is only available for tax disputes in which the Italian Revenue Agency or, if they decide and adopt these rules by 31 August 2017, local authorities, are involved. The claim must also have been submitted to the tax court of first instance and notified to the Italian Revenue Agency by 24 April 2017, the day on which Law Decree no. 50/2017 came into force. The last condition implies that no final judgment has been issued. Excluded from the scope of this relief are all controversies about the EU’s traditional own resources, VAT on imports, the recovery of state aid and refund claims.
How to submit a claim - In order to benefit from the simplified definition, the taxpayer must submit an electronic application for a definition of each single tax dispute, or for the single action challenged. This can be done through an authorized and qualified professional or by visiting any of the territorial offices of the Agency, or else in a direct way but only for those taxpayers with access to the Revenue electronic and digital services.
The opportunity to resolve pending tax disputes without interest and penalties - To finalize the procedure, the taxpayer must pay all the taxes demanded in the tax assessment notice, as well as any interest for delayed collection of taxes, accruing over the 60 days following the service of the tax assessment notice. However, the taxpayer is exempted from the penalties imposed as a result of the tax assessment, and from the interest on arrears. If the dispute is only about interest or penalties, the taxpayer can pay just 40% of the amount in order to end the dispute. The taxpayer must pay the full amount by 2 October 2017. Alternatively, if the amount is higher than EUR 2,000, the taxpayer can choose to pay in installments: 40% by the same date, 40% by 30 November 2017 and 20% by 30 June 2018.

FiscoOggi è una pubblicazione dell'Agenzia delle Entrate - Ufficio Comunicazione
Testata registrata al Tribunale di Roma il 19.9.2001 con n. 405/2001
Direttore responsabile Claudio Borgnino