Investment funds operating in Italy
follow the rules and regulations imposed under the European Union’s (EU) directives, including the regulations referring to the taxation of such vehicles. Italian investment funds
are taxed in accordance with the characteristics of the vehicle and the residency of the investors. Our team of lawyers in Italy
can offer assistance to the businessmen who want to register an investment fund
on the local market and one of the main requirements refers to the compliance with the taxation requirements
Taxation of the Italian open-ended funds
Both local and foreign investors can set up open-ended or closed-ended funds. The main characteristic of an open-ended fund refers to the fact that the investors are allowed to issue an unlimited amount of shares.
The taxation of the investment funds in Italy
is performed in a different manner than in the case of commercial companies. If a corporate entity
is imposed with the corporate income tax
, the investment fund
is not required to pay this tax
, as the local legislation prescribes a full exemption on this matter.
However, the investors are imposed with the withholding tax on distribution proceeds applicable at the rate of 26%, but the tax is not available for the collective investment schemes which fall under the regulations of the Italian Unified Banking Act.
Foreign investors opening an investment fund in Italy
should know that they are subject to the same withholding tax rate, but only in certain conditions, on which our attorneys in Italy
can offer more details. It is important to know that non-resident investors
can also benefit from a lower withholding tax,
if they are the direct beneficiaries of the double taxation treaties
signed by Italy with other contracting states.
Taxation of closed-ended funds in Italy
do not benefit from the same regulations available for the open-ended funds
, as the investors are allowed to issue only a certain amount of shares. However, this type of fund is also exempted of the corporate income tax
, but the main difference refers to the taxation
of the investors.
Resident investors opening closed-ended funds established as real estate vehicles, who own less than 5% of the net assets of the fund, are imposed with a 20% withholding tax on distribution proceeds.
Businessmen interested in receiving more information on the taxation of the investment vehicles
available in this country are invited to contact our law firm in Italy
for legal assistance.