Main provisions of the Italian Revenue Agency Operational Guidelines for IFTT

24.07.2013

We hereby highlight the main provisions of the Measure of the Italian Revenue Agency with regard to the Italian Financial Transaction Tax (IFTT).

This is further to our Taxflash T13048, dated 20 July 2013, concerning the Italian Revenue Agency and the IFTT’s disclosure requirements, operational rules and related to reporting, payment and refund.

Specifics

The full text of the Measure is available (at present, only in Italian) on the website of the Italian Revenue Agency.

The main issues dealt with in the above Measure are as follows:

“Liable Subjects” for the tax application, relevant payment and tax return obligations (Par. 1 and 2 of the Measure)

  • Banks and Investment firms (resident and non-resident);
  • Asset Management Companies (SGR) (unless their trades are executed by another Liable Subject on their behalf);
  • Trust Management companies (unless their trades are executed by another Liable Subject on their behalf or the Trustor declares that the relevant IFTT has already been applied);
  • Notaries and other subjects acting in the framework of transactions for the preparation and validation of the relevant Acts (unless the Taxpayer declares that the relevant IFTT has already been applied).

For those taxable transactions executed without the intervention of the above-mentioned subjects, the IFTT will be paid directly by the Taxpayer.

Duties for non-resident subjects (Par. 3 and 4)

  • The intermediaries do not have to pay the tax if the Taxpayer declares that the transaction is to be considered exempt or excluded from taxation (the intermediary “in receipt” must verify said declaration).
  • If, in the transaction execution, more than one liable intermediary is involved, the tax will be applied by the intermediary directly receiving the transaction order, by the purchaser or by the final beneficiary (that is, by the intermediary closest to the latter):

    • If the purchaser or the final beneficiary is a financial intermediary resident in a White List country, said intermediary will directly take care of the tax payment.
    • If, where more intermediaries are involved in the transaction execution, any of them is resident in a Black List country (BL), the other intermediaries will consider said BL resident as the purchaser or final beneficiary of the transaction and the so-called “daily netting” must be calculated for each client of the BL resident intermediary and not at intermediary level. The BL resident intermediary has also the following options:

      • If the BL has a permanent establishment in Italy or in a “country open to cooperate” (but with which no specific agreements are in place for the exchange of information or for assistance in the recovery of debts), it can fulfil the IFTT obligations through the same establishment.
      • It can appoint a Fiscal Representative in Italy.
      • It can disclose its data to the Italian Revenue Agency, obtain the fiscal code and appoint the Central Securities Depository (Monte Titoli) to fulfil the relevant tax obligations.

Details for payment (Par. 3 and 4)

  • Form F24 is the approved form to be used for the payment of the IFTT, with reference to each final beneficiary, unless the taxpayer is a non-resident without a cash account in Italy, in which case payment will be executed by means of a bank transfer.
  • Fiscal code: amongst other encumbrances, the Fiscal Representatives will have to request the fiscal codes for the represented subjects and notify the Italian Revenue Agency, via the dedicated form, that they have been appointed as Fiscal Representative (Att. no.3 to the Measure).

Filing obligations

The Liable Subject has to take care of the registration and filing of the information relating to each single transaction (as per dedicated “analytical prospects” Att. no.8 and no.9 to the Measure).

Said registrations must be input in compliance with the dispositions of Legislative Decree 82/2005, “Codice dell’amministrazione digitale”, within the terms for the tax payment, in a dedicated electronic register, duly set to guarantee the transactions’ daily chronological order and the durability and storage of recorded data.

Permanent establishments in Italy and Fiscal Representative will have to take care of the storage of recorded date/registers.

Tax return obligations (Par. 6)

The declaration of the IFTT will have to be presented by 31 March each year with reference to the previous calendar year. The Italian Revenue Agency will soon issue a new Measure to approve the “tax declaration form for the IFTT” to be delivered electronically to the Italian Revenue Agency (or, for non-resident intermediaries, sent via “registered mail”).

Central Securities Depository (Par. 7)

All the Liable Subjects for the tax payment can appoint Monte Titoli for the tax payment and the fulfilment of their tax return obligations.

Exceeding Tax payments (Par. 8)

It is possible to claim for refund of excess paid IFTT, either in the annual tax return declaration or through an ad-hoc application to the Italian Revenue Agency. Further details will be contained in the Measure soon to be issued with the IFTT declaration form.

Impacts on customers

We kindly ask customers to take due note of the above information.

Customers are reminded that the first payment date for the IFTT on transfers of ownership of stocks or other financial instruments (applied as from 1 March 2013) and on transactions on Derivatives (applied as from 1 September 2013) has been postponed to 16 October 2013.

Starting with the transactions concluded as of 1 October 2013, the tax due on stocks and derivative financial instruments, concluded during each month, will have to be paid on a monthly basis, by the 16th day of the following month.

Customers are also reminded that the Italian Bankers Association (ABI) has called a meeting with the representatives of the intermediaries to verify the impacts of the guidelines issued by the Italian Revenue Agency.

We will promptly provide further information about the results of said meeting and the release of the additional anticipated Measure of the Italian Revenue Agency that will contain the IFTT declaration form and the instructions for the completion of the Form F24 with the relevant tax codes.

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.