Withholding Tax Exemption On Bond Interest Broadened

Law Decree No. 91 of June 24, 2014, converted into law by the Italian Parliament on August 7, 2014, has broadened the scope of the withholding tax exemption applicable to eligible nonresident investors (i.e., investors resident in a white-listed country and with no permanent establishment in Italy) on certain debt-like securities.

Before the enactment of the new rules, nonresident holders could benefit from a withholding tax exemption on interest paid on the following securities:

• Bonds, bond-like securities, and commercial papers that were issued by Italian-resident banks, regardless of whether these securities were listed on a regulated market;
• Bonds, bond-like securities, and commercial papers, whether listed or not, that were issued by resident companies whose shares were traded on regulated markets or multilateral trading facilities of an EU Member State or an EEA country included in the Italian white list (i.e., Iceland and Norway); and