Italy: IFTT - Operational guidelines for customers - Update
Note: This taxflash, originally published on 14 October 2013, has been updated to provide customers with information on appointing Intesa Sanpaolo S.p.A. for the Italian Financial Transaction Tax (IFTT) service. Changes have been highlighted.
The Italian Financial Transaction Tax (IFTT) was introduced in December 2012 and came into force on 1 January 2013.
It is applicable for equities and equivalent securities and related High-Frequency Trading (HFT) transactions executed as of 1 March 2013 and for derivatives and equivalent securities and related HFT transactions executed as of 1 July 2013.
- The regulatory framework of the IFTT is made up of:
- The law of 24 December 2012;
- The Ministry Decree of 22 February 2013, giving the milestones for the implementation;
- The Resolution of the Tax Agency, defining the operational guidelines;
- The article 56 of the Decree (decreto-legge) of 21 June 2013 so called "Decreto del Fare", postponing the first deadline for the tax payment to 16 October 2013.
We remind you that entities that are liable to pay IFTT are called “liable parties”. They are the parties that introduce an order in the market or the ones that introduce an order on behalf of their clients (brokers). To comply with their duties to report and pay the IFTT to the Italian Tax Authorities, the liable parties must:
- If they have a permanent establishment (PE) in Italy, designate their PE;
- If they have no PE in Italy, to appoint an Italian tax representative. Certain Italian banks offer an IFTT service, acting as tax representative and taking care of the reporting as well as the monthly payment; or
- Alternatively appoint the Italian CSD, Monte Titoli, for this purpose.
Foreign intermediaries acting as “liable parties” are obliged to file an IFTT declaration under the Italian Financial Transaction Tax rules and are requested to obtain an Italian Fiscal Code (ITIN) unless they already have one (please note that the word TIN has also been quoted in other tax related publications).
The ITIN is required to send the monthly payment of the tax to the Italian Treasury, unless the foreign intermediary has a PE in Italy. In this latter case, we kindly remind that IFTT obligations, including payment, recordkeeping and reporting, must be performed directly by the Italian PE.
Impact on customers
- A Tax Identification Number (ITIN) must be requested from the Italian Tax Authorities if required. Please refer to our Taxflash T13074.
- If customers wish to appoint Intesa Sanpaolo S.p.A. for the IFTT service please contact them for further information at firstname.lastname@example.org
- Customers should be informed that Intesa Sanpaolo S.p.A. will only act on their behalf to process the payment and not in the calculation process. Intesa Sanpaolo S.p.A. does not have any obligation or liability, direct or indirect, even against third parties, regarding the truthfulness, accuracy, completeness or formal correctness of the information, method of calculation.
- Customers may also appoint another Italian bank of their choice as tax representative.
The market deadline is 16 October to report and pay the tax for the period March to September 2013.
If you appoint Monte Titoli, for the first reporting period, a special extended deadline is offered by Monte Titoli until 31 October 2013, while Monte Titoli’s own deadline for the reporting and payment of IFTT is 16 November 2013.
This information presented herein does not give any legal or tax advice and should not be relied upon in that regard. This document is for information purposes only. We recommend to Customers to seek appropriate professional advice where necessary before taking any action based on the information contained in this announcement.
Clearstream and LuxCSD make no guarantees, representations or warranties and accepts no responsibility or liability as to the accuracy or completeness of the information, and under no circumstances will it be liable for any loss or damage caused by reliance on any opinion, advice or statement made in this document. Should you wish to be provided with a reliable Italian tax law legal advice with respect to the IFTT, please contact your own legal and tax lawyer.
We remind customers that:
- The performance of transactions on Italian taxable securities entering within the scope of the IFTT may trigger obligations to report and to pay to the Italian tax authorities, the IFTT and in this respect you are solely responsible for complying with the laws and regulations relating to the IFTT, including record keeping duties.
- The record keeping obligation of the details on the transactions (record of the transactions affected by the IFTT, exempted and excluded) according to the law, is incumbent upon entities that are qualified as “liable parties” according to the IFTT law and decrees. Such record has to be made available at any time to the Italian tax authorities upon request.
- Clearstream and LuxCSD cannot be held responsible for any taxes, duties, claims, interest, fines, penalties or damages imposed by the relevant authorities and costs associated therewith in respect of its customers’ transactions in securities subject to IFTT.
This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A., its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions reflected herein. The information in this Taxflash does not constitute legal or tax advice.