- A trust is an autonomous taxpayer where the trustee acts independently, and the settlor has truly transferred his assets to the trust – Reply No. 145/2025
In Ruling No. 145 the settlor, an Italian tax resident, had set an irrevocable trust governed by English law, with a Maltese trustee, a Swiss investment adviser and an Italian protector. The settlor is designated in the deed as an “excluded person”, while the beneficiaries are his spouse and descendants. The question posed to the tax authorities was whether the trust should be treated as “non-look-through” and therefore as an autonomous taxpayer within the meaning of Article 37(3) of Presidential Decree No. 600/1973.
Referring to Circulars 48/2007, 61/2010 and 34/2022, the Agency reiterates that look-through treatment (“interposizione”) applies only where the trustee is effectively controlled by the settlor/beneficiaries or where there is no real disposal by the settlor. In the case at hand the decisive factors include, inter alia:
- Full management powers of the trustee (purchase, disposal, leasing, settlements, assumption of debt);
- Delegation permitted but with the trustee remaining liable;
- Protector’s powers limited to removing beneficiaries, changing the governing law/forum and removing the trustee;
- No offices or shareholdings of the settlor in either the trust company or the investment adviser.
On this basis the Agency concludes that the trust “may be regarded as an autonomous taxpayer for Italian tax purposes”, there being no elements of look-through.
- Dividends: the reduced 1.20 % withholding tax does not apply – Reply No. 144/2025
The second ruling concerns the same structure but deals with withholding tax on dividends that an Italian company (a non-qualified shareholding) will distribute to the trust. The ruling sought application of the reduced 1.20 % withholding rate laid down in Article 27(3-ter) of Presidential Decree No. 600/1973 for “companies and entities subject to a corporate income tax” resident in the EU/EEA.
The Agency traces the rationale of the rule—to equalise the overall burden on dividends between Italian IRES taxpayers and their foreign counterparts—and notes that:
- The reduction mirrors the 95 % exemption for dividends received by resident IRES taxpayers;
- The scheme, modelled on the Parent-Subsidiary Directive, presupposes that the recipient has a corporate legal form.
Although the trust has opted to be taxed as a “company resident in Malta”, it does not possess a corporate form comparable to the legal types listed in Directive 2011/96/EU. The reduced rate is therefore unavailable and the ordinary 26 % withholding must be applied.
- Capital gains on Italian shares remain exempt – Reply No. 144/2025
Different treatment applies to any future capital gain on a disposal of the shareholding. Because Malta appears in the “white list” under Ministerial Decree 4 September 1996, the trust qualifies as a person referred to in Article 5(5) of Legislative Decree No. 461/1997. Consequently, any capital gain arising from a sale of the Italian company’s shares will enjoy the exemption provided for in that Article.
Replies No. 144 and 145/2025 thus draw a coherent picture: on the one hand they reaffirm the trust’s separate taxpayer status where the trustee is genuinely independent and the settlor has truly transferred his assets; on the other hand they confirm that the 1.20 % withholding benefit is reserved for entities having an EU-recognised corporate form, while the capital-gain exemption remains available to foreign persons on the white list. Careful structuring of the trust and its Italian connections therefore remains crucial to avoid tax pitfalls.
Our firm, through its specialised Wealth Planning & Trust team, is available for further assistance.
