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Italy: Tax-exemption requirements, proceeds from real estate investment funds

Italy: Tax-exemption requirements, real estate

The Italian Revenue Agency issued two “statements of practice” in the form of tax rulings that describe the tax-exemption requirements for proceeds from an Italian real estate investment fund—specifically when the unit-holders are foreign partnerships that indirectly own the real estate investment fund units through fully owned vehicles.


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In general, “closed-end” real estate investment funds established in Italy and managed by an authorized management company are exempt from Italian corporate income tax, provided that:

  • The fund makes collective investments for a plurality of unit-holders or for a single unit-holder (e.g., a pension fund or investment fund representing a plurality of interests).
  • The authorized management company manages the fund on behalf of and for the benefit of the fund’s unit-holders (but autonomously and independently of them).

Proceeds that a foreign unit-holder receives from an Italian real estate investment fund may be subject to a final withholding tax at the standard rate of 26%. However, an exemption from withholding tax may apply for proceeds distributed to certain foreign resident investors.

The statements of practice provide a description of the requirements that foreign investors must satisfy in order to benefit from the tax exemptions for proceeds from the Italian real estate investment fund units that they hold.


Read an October 2018 report [PDF 167 KB] prepared by the KPMG member firm in Italy

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