Italy: Capital gains on “qualifying shares” - KPMG Global
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Italy: Capital gains on “qualifying shares,” proposed tax changes

Italy: Capital gains on “qualifying shares”

The draft budget law 2018 (expected to be approved by the end of 2017) proposes an increase in taxes applicable to gains realized on the disposal of “qualifying shares” of Italian companies. If approved, the provision would be effective as of 1 January 2019 and would specifically affect non-resident entities.


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Shares are defined as “qualifying shares” if:

  • Representing more than 20% of the voting rights or 25% of the share capital of a non-listed Italian company, or
  • Incorporating more than 2% of the voting rights or representing more than 5% of the share capital of a public company


Currently, Italian domestic law provides that capital gains arising from qualifying shares owned by foreign entities (except for shares owned through an Italian permanent establishment) are taxed as follows: 

  • A portion (49.72%) of gains realized in 2017 are taxable at a corporate income tax rate of 24%, with a possible effective tax rate of 11.93%.
  • A portion (58.14%) of gains realized from 1 January 2018 are taxable at a corporate income tax rate of 24%, with a possible effective tax rate of 13.95%. 

Proposed change to tax treatment

The draft budget law 2018 proposes to replace the current tax treatment with a “flat” 26% substitute tax—that would be aligned with the capital gains tax of “non-qualified shares” and gains realized by “physical persons.”


Read a November 2017 report [PDF 162 KB] prepared by the KPMG member firm in Italy

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