By Davide Anghileri, University of Lausanne, Switzerland
Italy’s 2020 budget law, which includes several tax provisions of interest to multinational enterprises investing in Italy, was published in the Official Gazette, N. 160 of 2019 and now has legal effect.
From 1 January, a digital services tax, similar to the one put forward by the European Commission, is introduced in Italy.
Italy’s new digital services tax imposes a 3% tax on Italian-sourced gross revenues resulting from the supply of advertising services through digital media and from certain digital platforms. To be subject to the tax, a digital platform must allow users to interact and must facilitate the direct supply of goods and services and user data generated via digital media.
Italy’s digital services tax will only apply to companies that, on a stand-alone basis or at the group level, generated revenues during the proceeding period of at least EUR 750 million, of which at least EUR 5.5 million are Italian-sourced qualifying digital services.
Notional interest deduction
An allowance for corporate equity (ACE, also known as the notional interest deduction or NID) is re-introduced in the Italian corporate tax system from 2019, with a fixed rate of 1.3% to be applied to the qualifying net equity.
An allowance for corporate equity (ACE also known as the notional interest deduction or NID) is re-introduced in the Italian corporate tax system from 2019, with a fixed rate of 1.3% to be applied to the qualifying net equity.
Equity increases that occurred in 2019 will benefit from ACE upon the filing of the year-end tax return.
Tax credits
The new law also grants tax credits for investment in certain fixed assets. It also amends the rules on tax credits for R&D activities and investment in human capital.
Davide Anghileri
Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.
Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues.
Davide can be reached at [email protected].
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