Clifford Chance

Italy – Breaking news for EU and EEA Investment Funds investing in italian shares

26 November 2020

The draft Budget Law for 2021 currently under review of the Italian Parliament envisages the introduction of a tax exemption on Italian source dividend and capital gains realized by EU and EEA investment funds established according to either UCITS or AIFM Directives ("Qualifying Funds"). If the new measures as currently proposed are approved, the favourable regime will apply to dividend distributed and capital gains realized as of 1 January 2021. However, since the new legislation is aimed at curing an existing breach of EU law, Qualifying Funds would have sound arguments to demand retrospective application of the exemption.

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