International Tax – Italy – Paolo Comuzzi

Lawal is an Italian law firm with offices in Milan – Rome – Turin and in two different countries (Italy and France / our office is located in Paris).

Our business, concerning tax matters, encompasses M&A, tax litigation, day-by-day tax advice, real estate, VAT and local taxes. We also do tax and private client work. We are currently dealing with an important tax litigation, and are in the process of advising clients on extraordinary transactions and transfer pricing matters. In addition, we recently prepared a ruling concerning the interpretation of an important tax treaty and its application. As we are tax advisers and auditors, we may also be appointed as statutory auditors (Sindaci) and/or directors (amministratori), as well as auditors (revisore), or in the role of members of the supervisory body (provided by law 231/01).

Our department further performs accounting services with a specific structure and, in cooperation with a third-party labour consultant, payroll services.

I am one of the four Tax Partners located in Milan (see website), and am admitted as tax adviser (Dottore Commercialista) and have degrees in business (from the Bocconi University in Milan), as well as in law (from the University of Macerata, which has historical significance, as it was established 700 years ago). Meanwhile, I am an active user on LinkedIn, and regularly attend meetings of the organisation of experts in criminal tax law (Centro di Diritto Penale Tributario), an organisation for which I am on the scientific committee.

Previously, I worked for seven years at EY, as well as 20 years at PwC, where I was an Associate Partner in M&A and tax litigation.

Italian resident corporations (and Italian branches of foreign companies) are subject to corporate income tax and regional tax. The nominal tax rate (including both taxes) is 27.9%, while the tax base is generally the profit as shown in the financial statements – properly adjusted to consider tax law provisions because, where mandatory tax provisions deviate from financial accounting rules, adjustments have to be made. Capital gains and losses are treated the same as regular income. As a general rule, expenses incurred in acquiring, securing and maintaining taxable income are tax-deductible. The tax year is generally the calendar year, and tax returns need to be filed within specific due dates.

We may say that in Italy, tax laws are getting more and more complex, and it is increasingly difficult to interpret the rules. Consequently, clients often required advisers to comprehend the tax obligations they are facing. Moreover, directors – in order to be deemed sufficiently diligent in the management of their company – should always request specific advice when a case is uncertain.

Italy is, notwithstanding some issues, an attractive location for doing business, as it is a jurisdiction in the heart of Europe with neighbouring countries that promise advantageous business development in the future. In Italy, there is a qualified workforce, valid infrastructure, many double taxation treaties, an interesting research & development tax incentive, a liberal group taxation system, as well as the possibility to obtain tax rulings. There is also a favourable tax regime in force for foreign individuals.

As in other countries, the global attacks on tax planning have made our work and our clients’ lives more complicated, and we may not ignore the fact that any tax adviser must be cautious not to collaborate in potential tax evasion. The tax authorities are, at least on occasion, aggressive – particularly with reference to the notion of beneficial owner.

As a consequence of COVID-19, we have had to reduce physical client meetings; however, Zoom and other similar solutions must also be considered as valid in order to maintain a healthy business relationship.

We are growing, but we are fully aware we should consistently improve our “ability” and skills concerning external information related to what we do.

We should point out that most of the COVID-19-related tax legislation only deals with the postponement of filing deadlines. Tax law is not impacted by COVID-19.

We publish a great deal of material for clients (i.e., I publish a comment every 2–3 days on LinkedIn). We also make substantial use of our website, tax journals and, in the near future, we are open to the possibility of webinars. In the coming months, the Italian tax system will undergo a major reform and our tax department (and our firm also) is preparing to face this new challenge.