Tax alert – Italy – M&A
The Italian tax authorities recently circulated Guidance n. 29/E/2022 to clarify that:
CFC LEGISLATION In compliance with Directive EU 2016/1164 (ATAD), for CFC legislation purposes the “ETR” and/or “Passive income” tests must be carried out on a yearly basis.
FOREIGN COMPANY IMMIGRATION TO ITALY Foreign companies moving their tax residence to Italy may adjust the tax base of their assets to the current market value. However, in case the immigrating company was a CFC, such adjustments may not exceed the tax cost of said assets.