On the basis of a consolidated orientation expressed by the Court of Cassation, by “tax inversion” we mean the fictitious location of the tax residence of a company abroad, in particular in a country with a more advantageous tax treatment than the national one.
Therefore, foreign investment (so-called “Companies dressed abroad”) is a term that refers to particular techniques of international tax planning, implemented through the establishment of one or more companies in another foreign country, not only located in tax havens , for the sole purpose of obtaining undue tax savings.
This phenomenon has been dealt with several times by the jurisprudence of legitimacy, which through an interpretation compliant with the principles protected by Community law (i.e. that of non-discrimination, freedom of establishment and free capital), has framed the issue of circulation in the more general and superordinate one of the “prohibition of double taxation” that when it is triggered there is a risk of imposition by several States of the same manifestations of wealth on the same subject through identical or similar taxes.
Ultimately, for the National Treasury, the problem of the exact determination of residence for tax purposes assumes particular relevance connotations with reference to corporate entities, pending the found diffusion of “tax inversion” phenomena and, that is, of those particular cases for which an entity, although formally having its headquarters abroad, one has one or more legal criteria of connection with the national system, by virtue of which the fiscal residence can be rooted within the territory of the State.
The tax provisions envisaged in this matter must be assessed by coordinating both the domestic and international regulations provided for by the bilateral conventions stipulated between the various countries which, in the case of dual residences, make it possible to eliminate phenomena of economic double taxation.
In the international context, with the primary purpose of resolving cases of conflict of residence between the various States, the OECD Income Model provides for specific provisions that make it possible to define the residence of the taxable person pursuant to the international convention.
Therefore, it is precisely the international agreements against double taxation on income that have declared the objective of dividing the tax claim between the two States involved, identifying on the one hand the State of residence of the taxable person and, on the other, the State of the source that Normally, it undertakes to reduce or renounce its taxing power.
In this context it should be remembered that:
- Article 73, paragraph 3, Tuir provides that companies, entities and trusts are considered resident in Italy when, for most of the tax period (183 days), they alternatively have the registered office or the registered office of the administration or main object in the territory of the State (article 73, paragraph 3, TUIR);
- Article 4, paragraph 3 of the OECD model of the international convention against double taxation on income, in the event that a company is considered resident in two different States, establishes that the tax residence of the legal person must be identified on the basis of a agreement between the competent authorities (called mutual agreement), which must take into account the place of effective management, the place where it is incorporated or otherwise constituted and any other relevant factor (any other relevant factors).
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