Italy: Proposal to address “registration tax” - KPMG Global
Share with your friends

Italy: Proposal to address “registration tax” on certain business reorganizations

Italy: Proposal to address “registration tax”

The draft budget law 2018 (expected to be approved by the end of 2017) includes a proposal aimed at deterring the Italian tax authorities from imposing “registration tax” on certain business reorganizations (for example, legal demergers of a business, followed by a disposal of shares).


Related content


When an asset deal is structured through a spin-off of a target business into a NewCo in exchange for shares in the NewCo (or by “demerging” a business and allocating shares of the transferee entity to the owner of the demerged company), followed by the sale of those shares, there is no corporate income tax liability because such two-step transactions are “tax neutral” by law. The same treatment would also apply for “registration tax” purposes because both steps are substantially tax-exempt (a €200 registration tax otherwise would be due on each step). 

Over the past few years, the Italian tax authorities have been looking at such two-step transactions, treating them as straight sales of assets for a consideration, subject to registration tax at a rate of 0.5%, 3%, or 9%, depending on the type of assets involved. The tax authorities have imposed registration tax by applying the anti-avoidance rule contained in article 20 of the Registration Tax Act (IRTC) and contending that this measure allows transactions to be defined by the economic substance of the transactions and in combination with other transactions executed immediately before and after the subject transaction.  This interpretation has been upheld by several court judgments; however, this treatment has drawn criticism from tax practitioners and academics. 

Proposed regime

The proposed amendments to article 20 IRTC would address the rules for application of registration tax. Also, the general anti-avoidance rule (article 10-bis of the Taxpayer Charter) would apply. 

The proposed amendments to article 20 IRTC—viewed as favorable to taxpayers—would be effective 1 January 2018, although there is still some uncertainty as to whether and to what extent the new rule would apply retroactively.


Read a November 2017 report [PDF 161 KB] prepared by the KPMG member firm in Italy

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


Request for proposal