ATAD Directive: new Cfc rules

The Legislative Decree No. 142/2018 about the implementation of the ATAD Directive, in force as from January 12th, 2019 for companies that close the financial statement as at December 31st, provides some news regarding the Controlled foreign company rules.

In particular, based on the new rules:

– the Cfc is extended to resident companies that hold a profit-sharing quota of more than 50%, even without control;

– the difference between Cfc extra UE black list and Cfc white list is cancelled: now the Cfc rules are applicable to companies that jointly are subject to taxation lower than 50% compared to the Italian one, and realize significant passive income (greater than 1/3).

The Legislative Decree No. 142/2018 lists carefully the passive income such as income from services and intercompany transactions when it comes to low added value goods or services.

At last, the new Cfc rules will also apply to the non-resident permanent establishment that control foreign companies in tax heavens.