With its decision no. 9050 of 25 April 2024, the Italian Supreme Court ruled that, in order for a foreign employee to receive the reimbursement of withholding levied by his\/hers Italian employer, he\/she only needs to provide the Italian Tax Authorities with a residence certificate stating that the employee is liable to tax in his\/her Country of residence.
\nOn the contrary, it is not necessary that for the employee to prove that the amount received has actually been subject to tax in its Country.<\/p>\n
According to the Italian Tax Authorities (ruling reply no. 87 of 8 April 2024), the existence of a permanent establishment in Italy prevents the foreign head-office from claiming a VAT credit refund.
\nMoreover, if the head-office is an English-registered entity belonging to a VAT Group in the United Kingdom, the services provided to it by the permanent establishment are irrelevant for VAT purposes.
\nHence, it is not possible to recover the credit under Article 30(2)(d) of the Presidential Decree 633\/72; furthermore, the VAT refund under Article 38-ter of Presidential Decree 633\/72, which is allowed for purchases and imports directly made by the non-resident in the territory of the Italian State, is not applicable.
\nIndeed, in the case examined in the ruling, the passive transactions are attributable exclusively to the permanent establishment and only the permanent establishment (not the head-office) can claim the refund of the excess, if the conditions are met.<\/p>\n
On 15 April 2024, the Italian Council of Ministers approved three bills to ratify the tax treaties signed with the following Countries:
\n\u2022 Libya, in Rome on 10 June 2009;
\n\u2022 Liechtenstein, in Rome and Vaduz on 12 July 2023;
\n\u2022 the People\u2019s Republic of China, in Rome on 23 March 2019.<\/p>\n
With respect to the tax treaty with China, the new treaty replaces the existing one, signed on 31 October 86 and still in force.
\nThe bills will be submitted to Parliament for final approval.<\/p>\n
With the ordinance no. 213637 dated 30 April 2024 the Italian Tax Authorities has issued the implementing rules related to the option for the 15% substitute tax regime pursuant to Art. 167(4-ter) of the TUIR, introduced as part of the revised Italian CFC regulations by Legislative Decree 209\/2023.
\nThe option can be exercised by the “last level” controlling entity in the FC form of the tax return and is effective as of the fiscal year covered by the declaration.
\nThe option is also effective for subsidiaries acquired in any capacity during the period when the option is effec-tive, provided that the requirements provided for the substitute tax to apply are met in the hands of the new acquired entities.
\nThe taxable base for the substitute tax is the subsidiary\u2019s net accounting profit. It is calculated from the accounting profit obtained by applying the accounting principles used for the consolidated financial statements, without considering consolidation adjustments and any write-downs of asset values and provisions for risks.
\nThe substitute tax is to be settled and paid by the parent company in proportion to its share in the profits, whether directly or indirectly.<\/p>\n
The European Court of Justice, in its decision on Case C122\/23 of 11 April 2024, affirmed that a national rule under which a taxable person, who exceeds a given turnover, can benefit from the VAT exemption for small businesses provided that it applies for VAT registration within a certain deadline is compliant with Directive 2006\/112\/EC.
\nIn the case at stake, a Bulgarian company operating under the VAT-free regime had issued invoices for an amount exceeding the threshold up to which such VAT-free regime applies. As a consequence, such company applied for VAT registration beyond the legal deadline: the tax authorities then issued a tax assessment for the VAT on taxable supplies that were in excess of the turno-ver threshold from the date that such threshold was ex-ceeded until the date of registration.
\nAccording to the European Court of Justice, the national rule providing for a tax liability in case of violation of the registration obligation is in compliance with the directive.<\/p>\n
According to the European Court of Justice (decision on case C-276\/2022 of 25 April 2024), Article 25(1), second sentence of L. 218\/95, which provides for the application of the law of the Member State (in the case, Italy) where the main object of the activity of a company that has transferred its registered office to another Member State is located, is incompatible with the principle of freedom of establishment set forth in Articles 49 and 54 TFEU (Treaty on the Functioning of the European Union).
\nIn the case at stake, an Italian srl, having as its “main object” the management of a property located in Italy (the company\u2019s only asset), was transformed (in 2004) into a limited liability company under Luxembourg law with its registered office in Luxembourg: according to the Court, it represents a restriction on the freedom of estab-lishment for a Member State\u2019s legislation to provide for the application of its national law to the management acts of a company established in another Member State on the grounds that it carries out the main part of its activ-ities in the first State.<\/p>\n
On the 25 April 2024, the OECD has issued a consolidated commentary on the GloBE Rules.
\nThe new commentary on Pillar Two does not contain any new clarification nor guidelines but it has combined the contents of the previous commentary with the administrative guidance issued by the OECD throughout 2023, and specifically the one published on 2 February 2023, on 17 July 2023 and on 18 December 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"