Council Directive 2003/49/EC, incorporated into Italian law by the legislative decree no. 143 (30th May 2005), establishes exemption from tax on interests and royalty payments made between associated companies within the European Union. It aims at eliminating, in cross-border payments between companies belonging to the same group, double taxation which is, even nowadays, an obstacle to the consolidation of the united market.
By regulation no. 2008/7077 of 15th January 2008, the Director of the Inland Revenue approved a form, with clarifying notes and regarding both types of income, on the basis of the provisions of article 26 quarter, paragraph 7 of the Presidential Decree of 29th September 1973, no. 600, introduced by the aforementioned legislative decree.
The form is also available in French and English.
The form includes both the statement the beneficiary of income, resident in one of the Member States, has to issue to prove that the necessary requirements have been met, and also the certification by the foreign tax authorities concerning the residence, that is the existence of a stable organisation.
It can be used to directly obtain exemption by the person paying the income or the refund by the Italian tax administration, if the deduction has already been made.
If, at the moment of payment, the minimum period (one year) of holding of voting rights has not passed yet, the deduction must be made in any case and only the possibility of refund is envisaged (see the memorandum of the Central office for regulations and disputes no. 47/E of 2nd November 2005, paragraph 2.2.1).
The form can also be used by persons who are resident in Switzerland, pursuant to the Agreement between the European Union and the Swiss Confederation on taxation of savings income, published in the EU Official Gazette no. 385 of 29th December 2004, which also grant to the Swiss Confederation the tax regime established in the Council Directive no. 2003/49, applicable with the attached form.
Laws and procedures
Regulation of 15/01/2008 – Approval of the layout of the form with clarifying notes for the application of Council Directive 2003/49/EC of 3rd June 2003, concerning the common system of taxation applicable to interest and royalty payments made between associated companies of different Member States, incorporated into Italian law by legislative decree no. 143 of 30th May 2005 (Published on 18th January 2008 pursuant to article 1, paragraph 361, L. 24/12/2007 no. 244)
Presidential Decree of 29th September 1973, no. 600 – pdf file – Common provisions concerning the assessment of taxes on income (Published in Gazzetta Ufficiale no. 268 of 16/10/1973)
Memorandum of 02/11/2005 – Implementation of Council Directive 2003/49/EC concerning the common system of taxation applicable to interest and royalty payments made between associated companies of different Member States. Legislative decree no.143, 30th May 2005