Italy: Transfers of shares of Italian subsidiaries | KPMG Global
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Italy: Transfers of shares of Italian subsidiaries to headquarters

Italy: Transfers of shares of Italian subsidiaries

The Italian tax authorities, in response to a question submitted by a French banking group, clarified that the transfer of shares in Italian subsidiaries from an Italian permanent establishment (PE) to its headquarters (in France) does not terminate the tax group arrangement involving the headquarters and the subsidiaries.


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Under provisions that were effective until 2014, non-resident companies could elect for Italian tax consolidation only if: (1) they were residents in a "treaty country;" and (2) had a PE in Italy whose assets included shares/quotas in the Italian consolidated subsidiaries. These conditions were repealed, to comply with the findings of a judgment of the Court of Justice of the European Union (CJEU). 

Thus, a company resident in an EU / EEA Member State and that conducts business activity in Italy through a PE may be the consolidating entity of a tax group with its Italian (controlled) subsidiaries—even if the PE no longer holds shares in the consolidated subsidiaries.

Ruling from tax authorities

In the ruling request, the Italian tax authorities explained that the transfer of shares in consolidated subsidiaries from the Italian PE to the foreign headquarters does not terminate the tax group regime, and further that the Italian tax authorities do not have to be notified about the transfer.


Read a March 2017 report [PDF 106 KB] prepared by the KPMG member firm in Italy

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