The Legislative Decree No. 209/2023 on international taxation has reformed the criteria for determining the tax residence of companies and entities referred to in paragraph 3 of Article 73 of the Italian Income Tax Consolidation Act (TUIR), with the aim of ensuring greater legal certainty. Indeed, the updated version of Article 73 provides more objective criteria for determining tax residence, as:
- The registered office, a criterion that remained unchanged compared to the previous version of the regulation.
- The place of effective management, understood as the location where the top decisions of the company are made.
- The place of main ordinary management, understood as the location where acts of ordinary management relating to the company as a whole are carried out continuously and in a coordinated manner.
For the purpose of establishing Italian tax residence, these criteria, which are alternative to each other, must exist in Italian territory for the majority of the tax period.
Our services
The National and International Taxation Department of Bacciardi Partners is capable of assisting your company in conducting a check-up on the governance of foreign subsidiaries or affiliates to avoid them being considered tax residents in Italy, in light of the recent changes regarding the tax residence of companies and entities.