Global

Details

  • Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/21/2014

Italy - Changes to tax rates on investment income, IRAP 

May 21: Amendments to the tax rates on investment income and the IRAP (Imposta regionale sulle attività produttive—or Italy’s regional tax on productive activities), as made by Law Decree no. 66 2014 (published in the official gazette no. 95) increase the tax rate on certain investment income and reduce the IRAP rate.

The effective date for the increased tax rates of withholding tax and the “substitution tax” relating to investment income is 1 July 2014.


The law decree has an entry into force date of 24 April 2014. Under Italy’s legislative system, the law decree will be presented to Parliament for ratification. If, however, the law decree is not ratified within 60 days of publication, it will have no legal effect.

Taxation of investment income

Under article 3 of the new law decree, the withholding tax and substitute tax rates on various types of financial instruments—including interest, premiums, and capital gains—increase from 20% to 26%.


This increase will be effective from 1 July 2014 and, with a few exemptions, will affect withholding tax and substitute tax on:


  • Interest, premiums, and any other proceeds regulated by article 44 of the Italian incomet tax law (i.e., capital income)
  • Capital gains from financial instruments (gains regulated by article 67(1) (c-bis) – (c-quinquies) of the Italian income tax law)

IRAP rate

The new law reduces the standard rate of the regional tax on productive activities (imposta regionale sulle attività produttive, IRAP) from 3.9% to 3.5%.


Other IRAP rates are also reduced—for example, the IRAP rate for financial institutions is reduced from 4.65% to 4.2% and for insurance companies, reduced from 5.9% to 5.3%.


Regional authorities may adjust these rates by up to 0.92%.


Read a May 2014 report [PDF 345 KB] prepared by the KPMG member firm in Italy: Tax Alert: New Italian tax measures


For more information, contact a tax professional with KPMG Italy:


Sabrina Navarra

+3902676441


Giuseppina Del Gatto

+3902676441




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now