"Investing in Italy, challenge or opportunity?" The Italian Revenue Agency met in London with foreign investors

Ms. Ilaria Petracca's picture
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The Italian Revenue Agency met in London with foreign investors to raise awareness on the last favourable changes in the Italian tax system with the aim of persuading foreign companies to vehicle massive investments in the country. The meeting which was held on 20th September in London, with the Italian Revenue Agency on the front line in collaboration with the Italian Embassy, ICE - the Agency for the promotion abroad and the internationalization of Italian companies - and the Ministry of Economic Development. The discussion was also attended by the Law Firm Gianni Origoni Grippo Cappelli & Partners, the Westfield Corporation and the Italian association for private equity (Aifi).

Creativity, design, fashion, tourism, art and culture are the historical brand of Italy. But it's not enough to attract investors. To attract capital, in fact, fiscal and regulatory infrastructure should also be well coordinated, effective, solid and functional. In 2015 Italy has moved decisively on this direction thanks to the approval of the so-called Decree on Internationalization of Enterprises whose purpose, among others, is also to attract foreign capital. To this first step must be also added the introduction of the Patent box, whose adoption has been strictly connected to the law of stability final approval by the Parliament. However, these are just some of the tax measures of those that in 2015-16 period have made the country to mark a strong advancement in the adoption of a taxation more open to attract investments, especially foreign ones. And so, alongside renown legendary brands, it’s now up to the tax administration to fill the role of attraction of foreign investors, illustrating a new ad hoc pro-investment kit rich of appealing tax rules.

The task of setting the framework of fiscal news that more distinctly look to foreign investors has been performed by Annibale Dodero, Director of the Revenue Agency's Management Directorate. Director underlined in the meeting the strategic importance of the adoption of new tax rules such as the Patent-box and the ruling on new investments and has also emphasized the importance of innovations such as the introduction of  ACE, Allowance for Corporate Equity, also known as Notional Interest Deduction. He also presented NID, a tax incentive introduced to promote the recapitalization of undertakings and to mitigate the different tax treatment applied to companies funded with debt and others funded with equity, and the adoption of the Research & Development tax credit, reserved for business activities to boost research and development. Mr Dodero concluded his speech by reminding that running from fiscal year 2017 is also scheduled the reduction of income corporate tax rate from 27.5% to 24%.

During the meeting Gaetano Scala, responsible of the Revenue Agency’s office that deals with the management of the newly introduced tax ruling for new investments, illustrated the positive effects of the introduction of this innovative fiscal measure, including economic growth, more competitiveness and internationalization of enterprises, all factors guaranteed by the establishment of new advanced forms of coded dialogue, reliable and secure, between tax authorities and taxpayers. In this frame it fits the Ruling on new investments, introduced by Decree 147/2015, which is aimed at those individual entrepreneurs, commercial and non-commercial companies, including trusts, partnerships, group of companies and other company associations (e.g., joint ventures, temporary company associations, consortiums), either resident or non-resident. The investment must be worth at least 30 million euros with reference to one or more years. Through this new fiscal tool - explained Mr Gaetano Sala - taxpayers intending to realize long-lasting and relevant investments within the Italian territory, can obtain the opinion from the Italian Revenue Agency about the tax treatment applicable to business plans and related extraordinary operations. Therefore, its application pursues the main aim to give more certainty to the economic operators in the determination of fiscal burdens connected to relevant investments in Italy.