The Italian IME rules provide that, under certain conditions, investment management activities in Italy do not determine the existence of a permanent establishment of the foreign Vehicles and their controlled entities.
With this provision, the legislator aims to boost Italy’s attractiveness for foreign investors by offering a ‘safe harbour’ for managers assisting the investor company.
On 19 November 2024, the Italian Tax Authorities, following the Ministerial Decree providing the conditions for the applicability of IME and the Guidelines on how to define the investment manager’s arm’s length remuneration, issued Circular Letter n. 23/E/2024 aiming to clarify the IME rules.
In the published document, the Italian authorities emphasised the Italian Government’s commitment to align domestic tax practices with international standards, thereby consolidating Italy’s position as a competitive destination for investment management activities.
Please find below our Focus Update in which is provided a brief examination by our professionals of the IME rules and of the clarifications provided by the Italian Tax Authorities.
