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Categoria: Corporate Taxation

Corporate Taxation, Expats

New Italian Inbound Workers Regime: Employer of Record Continuity and Extended Foreign Residence Requirement

Mar 1, 2026 di antonio malavasi 0 Commenti

New Italian Inbound Workers Regime: Employer of Record Continuity and Extended Foreign Residence Requirement

Italian Revenue Agency – Ruling No. 54/2026

The Italian Revenue Agency examined the application of the new inbound workers tax regime (Article 5, Legislative Decree No. 209/2023) in a case involving:

An Italian citizen resident in Switzerland for three tax years;

Employment abroad through a Swiss Employer of Record (EoR);

Relocation to Italy in 2025;

New employment in Italy for a different foreign operating company;

Formal employment contract signed with an Italian Employer of Record belonging to the same corporate group as the Swiss EoR.

The operating companies benefiting from the employee’s services were not related to each other.

The taxpayer argued that the ordinary three-year foreign residence requirement should apply, since the EoR performed only administrative/payroll functions and had no managerial authority.

Legal Framework

Under Article 5 of Legislative Decree No. 209/2023, the new inbound workers regime provides:

A 50% exemption on Italian-source employment income (up to EUR 600,000 annually);

A minimum foreign residence requirement of three tax years;

An extended requirement of six or seven tax years if, upon return, the employee works:

for the same employer, or

for a company belonging to the same corporate group (as defined under Article 2359 of the Italian Civil Code).

Position of the Revenue Agency

The Revenue Agency clarified that:

Continuity is assessed based on whether the employer (or group) before and after the relocation is the same;

This principle also applies when the formal employer is an Employer of Record;

It is irrelevant that the EoR performs only administrative functions;

It is irrelevant that the operating companies benefiting from the services are different and unrelated.

Since the Swiss and Italian Employers of Record belonged to the same corporate group, the Agency considered that continuity existed.

Conclusion

The ordinary three-year foreign residence requirement does not apply.

The taxpayer must satisfy the extended six-year foreign residence requirement to qualify for the new inbound workers regime.

Practical Implications

The ruling confirms a formal and structural interpretation of “group continuity,” focusing on corporate control relationships rather than on the substantive nature of the employment relationship.

This interpretation is particularly relevant for:

International mobility structures involving Employers of Record;

Multinational groups using payroll intermediaries;

Cross-border employment planning under the new Italian inbound workers regime.

Corporate Taxation

Italy’s New Dividend Regime for Entrepreneurs and Cross-Border Investors (Law 199/2025)

Gen 14, 2026 di antonio malavasi 0 Commenti

Italy’s New Dividend Regime for Entrepreneurs and Cross-Border Investors (Law 199/2025)

The Italian Budget Law for 2026 (Law 199/2025) has profoundly reshaped the taxation of dividends received by entrepreneurs and companies.
The reform does not abolish the traditional participation-exemption system, but it radically changes its logic: from a general rule to a selective privilege, available only for “economically significant” shareholdings.

This shift has particularly strong consequences in cross-border structures, where dividend flows between Italy and foreign holding companies are now subject to stricter eligibility tests.

  1. The philosophy behind the reform

For decades, Italian tax law was built around a simple principle:
profits should not be taxed twice as they move up a corporate chain.

That principle was implemented through:

Article 59 of the TUIR for entrepreneurs and partnerships;

Article 89 of the TUIR for corporations (IRES taxpayers).

Dividends were largely exempt, regardless of the size of the participation.

Law 199/2025 keeps the same objective but changes the mechanism.
The exemption now depends on whether the shareholder’s stake represents a real economic investment rather than a mere portfolio holding.

From 1 January 2026, the Italian system introduces a “material participation” test.

  1. Entrepreneurs and partnerships (IRPEF business income)

Entrepreneurs and partnerships do not receive dividends as private investors: dividends become part of their business income.

Under the old regime, dividends were partially exempt almost automatically.
Under the new Article 59 TUIR, the rule is reversed:

Dividends are fully taxable,
unless the participation meets one of the following thresholds:

at least 5% of the company’s capital, or

a tax value of at least €500,000.

Only if one of these thresholds is met does the dividend enjoy partial exemption. In that case, only 58.14% of the dividend is taxed, while 41.86% is excluded from the tax base.

Small participations that fall below both thresholds are now taxed in full.

This is not a technical detail: it represents a shift from a “participation principle” to a capital-intensity principle.

  1. Corporations (IRES taxpayers)

The same philosophy is applied to corporate shareholders under Article 89 TUIR.

Previously, dividends received by Italian companies were almost always 95% exempt.

From 2026, that exemption survives only if the participation satisfies the same 5% or €500,000 threshold.

If it does, the dividend remains 95% exempt.
If it does not, the dividend becomes fully taxable.

Again, the logic is clear: Italy wants to grant tax neutrality only to structural investments, not to passive or fragmented holdings.

  1. Timing: when do the new rules apply?

The decisive factor is not when the profits were generated, but when they are distributed.

The new regime applies to all dividends whose distribution is approved on or after 1 January 2026.

This means that even profits accumulated years ago will fall under the new rules if they are distributed after that date.

  1. Why this matters even more in cross-border structures

This reform is particularly impactful for international investors and multinational groups.

a) Dividends received in Italy from foreign subsidiaries

An Italian entrepreneur or holding company receiving dividends from a foreign company must now verify whether its participation meets the 5% or €500,000 test.

Many international structures involve:

minority stakes,

layered holdings,

investment vehicles with small direct percentages.

Those dividends may now become fully taxable in Italy, even though they were previously sheltered by the participation exemption.

b) Dividends paid by Italy to EU and EEA shareholders

Italian law provides a reduced 1.20% withholding tax for dividends paid to companies resident in the EU or EEA.

Law 199/2025 makes this benefit conditional upon the same participation thresholds used for the dividend exemption.

If the EU shareholder does not hold at least:

5% of the Italian company, or

a participation with a tax value of €500,000,

the 1.20% withholding may no longer apply.

This creates a direct link between domestic exemption rules and cross-border withholding relief.

c) Indirect holdings and multinational chains

The law also introduces a sophisticated concept:
the participation test must be applied on a group basis.

This means:

indirect holdings inside a group must be taken into account,

but percentages must be “demultiplied” through the ownership chain.

In international holding structures, this often pushes the effective stake below 5%, even when the ultimate parent believes it controls much more.

This is one of the most technically sensitive aspects of the reform.

  1. What this reform is really about

This is not a tax increase in disguise.
It is a filter.

Italy is telling investors:

If you commit real capital and hold a meaningful stake,
the system will continue to protect you from economic double taxation.

If your investment is small, fragmented or purely financial,
dividends will be taxed like ordinary business income.

For cross-border investors, this creates a new imperative:
structure matters.

Holding percentages, investment size and corporate chains are no longer neutral. They now directly determine whether dividends are tax-efficient or fully taxable.

Corporate Taxation

When Is a Foreign Company Really Italian? The Supreme Court Gives a Clear Answer

Gen 12, 2026 di antonio malavasi 0 Commenti

When Is a Foreign Company Really Italian? The Supreme Court Gives an (almost) Clear Answer

In judgment No. 32441 of 12 December 2025, the Italian Supreme Court confirmed a very important principle for international groups and foreign-based companies connected to Italy.

The case concerned a Luxembourg company that the Italian Tax Agency had tried to treat as tax-resident in Italy under the doctrine of “esterovestizione” — the idea that a company is only formally foreign but is in reality managed from Italy. On that basis, the Tax Agency had tried to tax the Luxembourg company’s profits in Italy for IRES and IRAP.

Both the first-instance tax court and the Lombardy Regional Tax Court rejected the assessment, holding that the Tax Agency had not proven that the company was actually run from Italy and that the Luxembourg company had its own real decision-making structure. The Tax Agency appealed to the Supreme Court, arguing that the lower courts had misunderstood how “effective management” should be assessed.

The Supreme Court rejected the appeal and sided with the taxpayer.

The Court made it very clear that, under Italian law and EU law, a foreign company can be treated as Italian-resident only if its “seat of administration”, meaning its effective management, is actually located in Italy. This is not a formal test and not a question of who owns the shares. It is a factual test based on where the company’s central management and administration really take place.

Most importantly, the Court reaffirmed that, in a group structure, the fact that an Italian parent or Italian shareholders give strategic direction to a foreign subsidiary is not enough to move the subsidiary’s tax residence to Italy. That kind of influence is normal in corporate groups and is protected by EU freedom of establishment. To qualify as esterovestizione, the Tax Agency must show something much stronger: that the foreign company is a purely artificial structure, a “letter-box” company, whose board and management have been effectively replaced by the Italian parent — in other words, that the parent has taken over the foreign company’s entrepreneurial and administrative powers so completely that the foreign entity no longer has real autonomy.

The Court also confirmed that the burden of proof lies with the Tax Agency. It is the tax authorities who must demonstrate that the foreign company is artificial and that its effective management is actually in Italy. If the taxpayer produces evidence of real activity, real directors, real meetings, and real decision-making abroad, that is enough to defeat an esterovestizione assessment unless the authorities can disprove it.

In this case, the courts found that the Luxembourg company had its own premises, directors, corporate governance, and decision-making in Luxembourg, and that the Tax Agency had not proven otherwise. Therefore, the company remained tax-resident in Luxembourg.

From a practical point of view, this judgment is very significant for international groups, holding structures, and expatriate-owned companies. It confirms that having an Italian parent, Italian shareholders, or strategic guidance from Italy does not automatically make a foreign company Italian-resident. What matters is whether the foreign company has real substance and real governance where it is established.

At the same time, it sends a clear message: if a foreign company is only a shell, with all real decisions taken in Italy, then Italian tax residence can still be asserted. But the authorities must prove it, and the proof must show genuine artificiality, not just control or influence.

In short, the Court has drawn a strong line between legitimate international corporate structures and abusive paper companies, giving much greater legal certainty to groups that build real operations abroad.

Corporate Taxation

Italy Implements New Compliance Framework for the Global Minimum Tax (Pillar Two)

Nov 16, 2025 di antonio malavasi 0 Commenti

Italy Implements New Compliance Framework for the Global Minimum Tax (Pillar Two)

Italy has taken a decisive step in implementing the Global Minimum Tax (GMT) by introducing a structured set of compliance obligations for companies that belong to large multinational groups. The decree issued on 7 November 2025 defines how Italian entities must prepare, file, and pay the various components of the minimum tax under the OECD Pillar Two framework.

A key point clarified by the decree is who is actually subject to these obligations. The rules apply to Italian resident entities that are part of multinational or national groups with consolidated annual revenues of at least €750 million, calculated according to the criteria used for the group’s consolidated financial statements. This includes parent companies, controlled subsidiaries, permanent establishments in Italy of foreign groups, and Italian sub-holding companies. In practice, any Italian entity belonging to a group that meets the €750m revenue threshold will fall within the scope, regardless of its own individual size. Smaller Italian subsidiaries of a large multinational group are therefore fully covered by the GMT obligations even if their local turnover is modest.

For these qualifying entities, Italy now requires the submission of a dedicated “minimum tax return.” The model is a unified declaration consisting of a general section with identification and group information, plus annexes specific to each form of minimum tax introduced by domestic legislation. Importantly, the obligation to file applies even when no additional tax is due. This ensures full transparency for the Italian tax authorities and alignment with the global GloBE reporting structure.

The decree also outlines the technical rules for preparing the return. All amounts must be expressed in euros, with mandatory conversion for companies reporting in foreign currency. Payments will be executed via the F24 form using new tax codes issued by the Agenzia delle Entrate.

Deadlines have been set to balance the need for compliance and the complexity of implementation. As a general rule, the return must be filed within fifteen months of the end of the fiscal year. During the first year of application, this period is extended to eighteen months to help groups adapt their internal processes and coordinate with foreign headquarters.

Penalties align with Italy’s standard tax-administration framework, but the law provides a temporary “soft-landing”: for the first three years of the regime, penalties do not apply unless there is intentional misconduct or serious negligence. However, responsibility remains significant, as Italian entities may be jointly and severally liable alongside other relevant group companies.

For multinational groups operating in Italy, this marks the beginning of a new compliance environment. Companies must immediately verify whether the group exceeds the €750m threshold, identify the Italian entity responsible for filing, and adjust internal systems to collect the data required by the GloBE model. Coordination with parent companies becomes essential to ensure consistency between global minimum-tax calculations and the Italian return. Robust documentation practices will also be crucial, given the expected scrutiny from tax authorities during the first years of application.

In essence, the decree does not simply introduce a new tax form—it establishes a full reporting architecture for global minimum tax compliance in Italy. Groups falling within the threshold should begin preparing early, ensuring that data flows, governance structures, and cross-border communication lines are fully aligned with the new rules.

Corporate Taxation, Expats

Cross-Border Pensions and Inheritance: Insights from Italy’s Ruling 290/2025

Nov 13, 2025 di antonio malavasi 0 Commenti

Cross-Border Pensions and Inheritance: Insights from Italy’s Ruling 290/2025

The Italian Revenue Agency, through Ruling No. 290/2025, has clarified the tax treatment of a lump-sum payout received in 2024 by an Italian tax resident as the heir of a U.S. voluntary pension account.
The full ruling is available here:

In the ruling, the Agency explains that the liquidation of the U.S. pension account—despite being funded entirely through voluntary contributions and unrelated to the Italian pension system—must be treated in Italy as pension income. Consequently, the amount received by the heir is subject to separate taxation, following the same rules that would have applied had the payment been made to the deceased person.

A central aspect of the ruling concerns the Italy–U.S. tax treaty. The Agency concludes that this type of lump-sum payout does not fall under the treaty article on employment-related pensions but under the article on “Other Income.” This provision assigns exclusive taxing rights to the country of residence of the beneficiary, meaning that Italy alone has the right to tax the payment.

For this reason, the U.S. withholding tax applied to the distribution should not have been charged. The Agency instructs the beneficiary to request a refund from the U.S. tax authorities and, if the refund is denied, to consider starting the treaty’s Mutual Agreement Procedure.

In essence, the ruling confirms that the entire gross amount of the distribution is taxable only in Italy under separate taxation, and any U.S. withholding must be reclaimed.

Corporate Taxation, Expats

Deferred bonuses and the end of the impatriate regime: the Italian Revenue Agency clarifies timing and taxation

Ott 29, 2025 di antonio malavasi 0 Commenti

Deferred bonuses and the end of the impatriate regime: the Italian Revenue Agency clarifies timing and taxation

The Italian Revenue Agency, through Ruling No. 274/2025, examined whether the impatriate regime can apply to deferred compensation — such as long-term incentive plans, stock options, or deferred cash bonuses — that are paid after the end of the preferential period and after the worker has moved abroad.
The question concerns employees who benefited from the impatriate regime while working in Italy but later left the country, receiving at a later stage certain deferred payments linked to their previous Italian employment. The key issue is whether such income, although economically connected to work performed in Italy during the eligible period, can still enjoy the tax relief once the regime has expired and the worker is no longer an Italian tax resident.

Agency’s reasoning and position
The Revenue Agency reaffirmed two guiding principles:

Cash principle: employment income is taxed when it is actually paid, not when it is earned. Therefore, if a deferred bonus or incentive is paid after the end of the five-year (or extended) impatriate period, or after the individual becomes non-resident, the preferential regime can no longer apply.

Source principle: even though the worker is no longer resident in Italy, the portion of income linked to work performed on Italian territory remains taxable in Italy as Italian-source income. In such cases, the Italian employer must operate the ordinary withholding tax, while the foreign country of residence will grant relief for any double taxation under the relevant tax treaty.

In summary
The Agency concluded that the impatriate regime is strictly temporal: it applies only to income received while the worker is both tax resident in Italy and within the benefit period. Deferred bonuses or stock plans paid later are still taxable in Italy — if connected to Italian work activity — but under ordinary taxation, without the impatriate exemption.

Corporate Taxation, Expats

Phantom Share Plans in Italy

Ott 23, 2025 di antonio malavasi 0 Commenti

Phantom Share Plans in Italy

Nature and Legal Framework

Phantom share plans, also called virtual or shadow share plans, are long-term incentive arrangements that replicate the economic advantages of share ownership without involving the transfer of real equity. Participants do not receive actual shares or voting rights but are promised a future cash payment whose value depends on the increase in the company’s share value over a certain period.

These plans are typically used to reward and retain key employees, directors, or consultants, aligning their interests with the company’s performance while avoiding dilution of ownership. From a legal standpoint, phantom shares are contractual rights, not financial instruments, and are governed by general civil and employment law principles rather than by corporate law.

Tax Treatment in Italy

The tax classification of phantom share income depends on the beneficiary’s relationship with the company. For employees, the payment is treated as employment income under Article 49 of the Italian Income Tax Code (TUIR). For directors, it qualifies as income assimilated to employment income under Article 50, while for self-employed professionals or consultants it constitutes professional income under Article 53.

Taxation arises at the time of payment, not upon grant or vesting. The amount received is subject to ordinary IRPEF and related regional and municipal surcharges. When the recipient is an employee or director, the company acts as withholding agent and applies the corresponding social security contributions to INPS.

For professionals operating under a partita IVA, the income forms part of their professional earnings and is subject to social contributions either to Gestione Separata INPS or, where applicable, to the relevant Cassa di Previdenza professionale (for example, CPAs, lawyers and other regulated professions). VAT applies if the incentive is paid in connection with an activity performed under a VAT-registered business.

For the company, the cost of the phantom share payout is deductible for corporate income tax (IRES) purposes in the fiscal year in which the payment is made, pursuant to Article 95 TUIR. Since no actual shares are issued and no capital movement occurs, the plan does not trigger registration or capital duties.

Although the value of the payment is linked to share performance, the gain is always treated as income from employment or self-employment, never as a capital gain. This distinction determines both the applicable tax and social-security framework.

Interaction with the “Impatriate Regime”

Phantom share payments may, in some circumstances, benefit from Italy’s “regime degli impatriati” (the special tax regime for individuals transferring their tax residence to Italy). This regime provides for a partial exemption from IRPEF on income derived from employment or self-employment performed in Italy, at the percentage applicable under current law.

Because phantom share payments are considered remuneration directly connected with work activity, they may qualify for this favorable treatment if they relate to services performed in Italy after the individual has become an Italian tax resident and if payment occurs during the valid period of the regime.

If the phantom share plan instead relates to work carried out abroad before the transfer of residence, or if payment is made after the regime’s expiration, the incentive would fall outside the scope of the benefit and be fully subject to ordinary taxation. For this reason, it is crucial to document the link between the incentive and the Italian employment or professional activity, as well as to plan the timing of payment carefully.

Corporate Taxation, Expats

Use of Cash for Travel Expense Reimbursements Incurred by Professionals and Billed to Clients ?

Lug 17, 2025 di antonio malavasi 0 Commenti

Use of cash for Travel Expense Reimbursements Incurred by Professionals and Billed to Clients?

1. Regulatory Premise

Starting from the 2025 tax period, the legislator introduced significant changes to the tax treatment of expense reimbursements billed by professionals to their clients. These updates affect two key areas:

  • the tax treatment for the professional;
  • the deductibility of the cost for the client (enterprise).

2. Tax Aspects for the Professional

2.1 Tax Relevance of the Reimbursement

Under Article 54, paragraph 2, letter b) of the Italian Income Tax Code (TUIR), reimbursements analytically billed by the client for expenses incurred by the professional do not contribute to taxable self-employment income. This means:

  • such reimbursements are not subject to income tax;
  • no withholding tax is due from the client.

2.2 Traceability Condition (new paragraph 2-bis)

The newly introduced paragraph 2-bis, added by Decree-Law 84/2025, states that the tax-exempt status of the reimbursement is conditional on the professional having paid the original expense using traceable payment methods. This condition is especially relevant when:

  • the reimbursement is not actually received (e.g. client insolvency);
  • the professional wishes to deduct the unreimbursed cost.

3. Tax Aspects for the Client

3.1 New Deductibility Rules (Article 108 TUIR)

Revised by the same Decree-Law 84/2025, Article 108 TUIR sets out in paragraphs 5-bis and 5-ter that:

  • Paragraph 5-bis: travel, lodging, and transportation expenses (including taxi services) incurred directly by the business are deductible only if paid using traceable means (e.g., bank transfers, credit cards, or systems listed in Article 23 of Legislative Decree 241/1997).
  • Paragraph 5-ter: this rule also applies to analytical reimbursements paid to professionals for expenses incurred during the execution of contracted services. Again, deductibility is conditional upon the client paying the professional via a traceable method.

3.2 Who Must Ensure Traceability?

The law refers generically to “payments”, but:

  • for expenses directly incurred by the enterprise (paragraph 5-bis), traceability concerns payments to the service provider;
  • for reimbursements to professionals (paragraph 5-ter), traceability applies to the payment made by the client to the professional, not to the original payment made by the professional.

4. Coordination with Article 54 TUIR

The rules align coherently:

  • Article 54 TUIR regulates the professional’s side, requiring them to use traceable methods only if they wish to avoid taxation or deduct unreimbursed expenses;
  • Article 108 TUIR applies exclusively to the client (enterprise) and requires traceability of the invoice payment.

There is no need for the professional to have used traceable methods for the client to claim the deduction.

5. Operational Considerations and Simplifications

5.1 No Verification Obligations for the Client

The client is not required to:

  • verify how the professional paid the expenses;
  • collect or store evidence related to the professional’s original payments.

It is sufficient that the invoice is paid using a traceable method, in order for the expense to be deductible.

5.2 Documentation Obligations for the Professional

Only the professional has an interest in ensuring payment traceability:

  • to exclude the reimbursement from their taxable income;
  • to deduct unreimbursed costs when applicable.

6. Final Remarks

  • The regulatory framework clearly distinguishes between the roles of the professional and the client.
  • Traceability is a condition for the client’s deduction, but it only applies to the invoice payment.
  • There is no obligation for the professional to use traceable payments to enable the client’s deduction.
  • The traceability obligation is relevant only for the professional’s own tax treatment.
  • The rules aim to simplify compliance for businesses, avoiding burdensome documentation of how the professional originally paid the expenses.

Corporate Taxation

Healthcare Transparency Under the Spotlight: Navigating the Sunshine Act

Apr 18, 2025 di antonio malavasi 0 Commenti

Healthcare Transparency Under the Spotlight: Navigating the Sunshine Act
The Italian Sunshine Act, introduced by Law 62/2022, is a major step forward in promoting transparency in the healthcare sector. It is designed to regulate and make public the economic relationships between companies operating in the health industry and healthcare professionals or organizations. Inspired by similar legislation in the United States and Europe, the law aims to:

Prevent corruption and conflicts of interest

Reinforce public trust in the healthcare system

Guarantee the right to access information on financial ties that may influence clinical or administrative decisions

At the heart of the law is the “Sanità Trasparente” (Transparent Healthcare) registry, an open-access platform managed by the Ministry of Health, where companies must publish detailed reports on all transfers of value (ToV) made to healthcare professionals or organizations.

📘 Legal Background: How the Law Evolved
The law came into force in June 2022, with a phased implementation plan. Within a few months, the Ministry was tasked with setting up the registry and defining its technical specifications. Public consultations followed in 2023, and by 2025 the first pilot tests of the online platform were initiated.

The official activation of the registry is expected by the end of 2025, triggering the obligation for companies to begin reporting data on a semiannual or annual basis, depending on the type of relationship.

🧑‍⚕️ Who Is Involved?
The legislation affects three main categories of stakeholders:

Producing Companies: Businesses that manufacture, distribute, or organize events in the human or veterinary health sector—including suppliers of goods and services, even if not strictly medical.

Healthcare Professionals: Not only doctors and nurses, but also administrative personnel and decision-makers who influence procurement or use of medical technologies and resources.

Healthcare Organizations: Hospitals, universities, research institutes, ECM providers, professional bodies, patient associations, and scientific societies.

💬 What Must Be Reported?
Companies must report electronically the following:

Transfers of value (money, goods, services, or other benefits) if they exceed certain thresholds:

Over €100 (single) or €1,000 annually for individuals

Over €1,000 (single) or €2,500 annually for organizations

Agreements that provide economic benefit (direct or indirect): participation in events, consultancy, training, research, etc.

Financial relationships: shareholdings, bonds, royalties related to intellectual property

Each report must include key data: beneficiary identity, value, reason, nature of the transfer, and intermediaries if applicable.

📅 Deadlines and Reporting Cycles
The law establishes two types of reporting cycles:

Semiannual reporting for agreements, transfers, and sponsorships

Annual reporting for shareholdings and royalties

Reports must be submitted in the period following the one in which the transaction took place. For example, a sponsorship in the first half of 2026 must be reported by December 2026.

🌐 The “Sanità Trasparente” Portal
The portal has two distinct user views:

A public area, accessible to anyone, where it is possible to search by beneficiary, agreement, or sanction

A company dashboard, for uploading XML files, validating data, checking for errors, and managing submissions

It is a comprehensive monitoring and transparency tool managed by the Ministry of Health.

🚨 Enforcement and Penalties
The Ministry of Health is responsible for enforcement, supported by the Carabinieri NAS (Health Protection Unit) and the Guardia di Finanza.

Companies are fully accountable for the accuracy and completeness of the information submitted.

Penalties include:

€1,000 + 20x the unreported value for missing ToV disclosures

€5,000 to €100,000 for false or incomplete information

50% reduction in fines for companies with annual revenue under €1 million

Names of fined companies will be published in the registry for at least 90 days

🛠️ Becoming Compliant: An Operational Approach
Complying with the Sunshine Act is not just about sending XML files. It requires an organizational shift:

Mapping all types of value transfers

Updating SOPs, contracts, and compliance models (e.g., 231 Model)

Involving key departments (legal, marketing, CRM, finance, compliance)

Digitalizing approval workflows and data collection

As one speaker emphasized: “Start from the organization, not the tool.”

✅ Digital Tools and Real-World Examples
The presentation showcased companies already investing in dedicated platforms to manage:

ToV tracking

Workflow approvals

XML reporting

Budget control and event oversight

A case study of Theras Group was highlighted. Starting in 2019, they built a full internal platform for managing transparency-related processes. By 2025, all ToV and event-related workflows were fully digital, compliant, and efficiently controlled.

🎯 Conclusion
The Sunshine Act presents a significant challenge—but also a unique opportunity. It invites companies to strengthen their internal governance, align with evolving ethical standards, and demonstrate a clear commitment to transparency and integrity.

Those who act early will not only comply with the law, but also enhance their reputation, competitiveness, and trustworthiness in the healthcare ecosystem.

Corporate Taxation

Italy 2025: Tax Incentives and Opportunities for Foreign Companies Investing or Expanding in Italy

Apr 5, 2025 di antonio malavasi 0 Commenti

Italy 2025: Tax Incentives and Opportunities for Foreign Companies Investing or Expanding in Italy

  • Introduction

Italy continues to position itself as an attractive gateway for international business.
The 2025 Budget Law introduces new tax measures designed to attract foreign investors, support innovation, and reward reinvestment and employment growth.
For companies planning to establish operations in Italy — or to reorganize their EU presence — these incentives can make a measurable difference in effective taxation and strategic planning.

  • Key Measures for Foreign Companies

🔹 Reduced Corporate Income Tax (IRES) at 20% for 2025
The Italian 2025 Budget Law (Law No. 207/2024) introduces a temporary reduced corporate tax rate of 20% (instead of the standard 24%) for companies that:

Allocate at least 80% of their 2024 profits to legal or special reserves;

Reinvest those profits in eligible “Transition 4.0 / 5.0” assets (digital, energy-efficient or green technologies);

Increase or maintain employment levels.

This measure rewards companies that keep profits in Italy and reinvest in productivity and innovation rather than distributing dividends abroad.

🔹 R&D and Innovation Tax Credits
Companies (including subsidiaries of foreign groups) can benefit from:

A 5% tax credit on qualifying R&D and innovation expenditures for FY 2024-2025;

A cap on eligible costs per year, depending on the type of innovation activity (green, digital, or design).

The credit is deductible from corporate income tax and can be combined with regional incentives.

  • Strategic and Operational Implications

🔹 Investment Incentives in Southern Italy (ZES – Special Economic Zones)
Foreign or Italian companies investing in Southern regions — such as Puglia, Calabria, Sicily, Campania, Basilicata, Sardinia — may qualify for a tax credit up to 40% of eligible investments in tangible assets (buildings, plants, machinery).
To qualify, the investment must be made within a defined ZES area and aligned with regional development objectives.

For foreign businesses evaluating an Italian entry or expansion, tax benefits must be balanced with compliance and operational considerations:

Entity choice: decide between an Italian subsidiary (S.r.l. or S.p.A.) or a branch, depending on activity level and exposure.

Accessing incentives: ensure investments meet the technical requirements under the “Transition 4.0 / 5.0” guidelines.

Profit allocation strategy: reinvestment and reserve allocation are key to qualify for the 20% IRES.

ZES opportunities: choosing a location within a Special Economic Zone can drastically reduce effective investment costs.

Ruling and certainty: large foreign investors may seek advance tax rulings with the Italian Revenue Agency to confirm eligibility and avoid disputes.

  • Compliance and Due Diligene Checklist

Before an investment, a professional adviser should verify:

Corporate structure: branch vs subsidiary, permanent establishment risk.

Profit use: at least 80% allocated to reserves (for IRES reduction).

Type of investment: ensure assets qualify under Transition 4.0/5.0 criteria.

Location: confirm if the site falls inside a ZES eligible area.

Employment impact: increase or maintain workforce level.

Interaction with double tax treaties and foreign tax credit positions.

Advance ruling opportunities with the Italian Revenue Agency.

  • Why Italy Now

Italy is modernizing its fiscal framework to compete with Spain, Portugal, and Eastern Europe in attracting capital and expertise.

The combination of reduced corporate tax, ZES incentives, and innovation credits offers a real advantage for companies that integrate investment and employment plans.

The challenge lies in navigating Italy’s formal compliance environment — where proactive tax planning and legal alignment are crucial.

  • Conclusion

Italy in 2025 represents a renewed opportunity for foreign enterprises seeking both market access and fiscal competitiveness in Europe.
The system rewards stability, reinvestment, and innovation.
Yet each case requires a tailored evaluation, considering:

the nature of the investment,

the group’s international tax position, and

the evolving Italian regulatory landscape.

For investors and advisors alike, this is the right time to explore Italy’s new business incentives — before the expected revision of rates in 2026.