Italy approves a new whitelist of non-Italian investor countries

A new whitelist of non-Italian investor countries has now been approved, which will allow foreign investors to receive returns from a number of investments in Italian securities without any Italian taxation. This approval follows a number of agreements which have been entered into in the last few months between the Italian Tax Administration and various countries in order to exchange information for tax purposes.

The new list will significantly reduce obstacles for foreign investors looking to invest in Italy, as the number of whitelisted countries increases from under 70 to over 120. The whitelist also now includes many of the leading financial centers which were previously excluded, such as Switzerland, Hong-Kong, the British Virgin Islands, the Cayman Islands and Liechtenstein.

Investors residing in these countries may now receive interest payments from Italian Treasury bonds and bonds issued by certain private companies (including, for example, Italian listed companies, listed bonds, bonds issued by banks, insurance companies and securitisation vehicles) without these being subject to Italian substitute tax. But this is not the only impact of the whitelist review; it will also affect other areas of tax such as investing in Italian investment funds or SICAV, entering into security lending transactions, or (with regards to foreign institutional investors) granting medium to long-term loans to Italian companies.

It is worth noting that any country included in the whitelist could be removed in the future if their tax authority does not cooperate with the Italian Tax Administration when exchanging requested information.