The first draft of the 2021 Italian Budget legislation provides for the abolition of domestic taxation on Italian dividends and capital gains earned by UCITSs and investment funds managed by regulated AIFMs in compliance with the Alternative Investment Fund Managers Directive (AIFMD) based in Countries of the European Union (EU) and of the European Economic Area (EEA). If this provision is enacted, the tax exemption will apply to dividends distributed and capital gains realised on or after 1 January 2021.
The tax exemptions under discussion, if enacted, will impact on how EU and EEA based regulated investment funds are able to structure their investments in Italian assets, cecause direct investment in Italian asset companies will be incentivised.
