PRESUMPTION OF “TAX INVERSION”: THE ITALIAN SUPREME COURT CLARIFIES THAT “MEDIATED” CONTROL IS NOT RELEVANT.
With decision no. 9400 of 5th April 2023, the Italian Supreme Court of Cassation ruled on “tax inversion”, clarifying that, in order to determine whether or not a foreign company is controlled by an Italian company, the test of legal internal control always requires that the majority of the shares of the foreign company be held by the Italian company, without any relevance of the so-called “mediated” forms of control through third parties.
The case involves four tax assessments that had been served to an Italian resident company (“ItaCo”) concerning Income Tax (IRES) and Regional Tax on Productive Activities (IRAP), as well as omitted payment of withholding taxes, attributable to a company governed by Luxembourg law (“LuxCo”). These tax assessments were the result of an audit, carried out by the Italian tax authorities, which led to the conclusion that LuxCo was, de facto, a foreign Italian taxpayer. Read more
