Vincenzo Senatore senior associate in the London office interviewed by International Advisor

Vincenzo Senatore, a senior associate in the London office of Giambrone (Europe) LLP was interviewed by International Advisor, an online publication commenting on a wide range of international issues, on the question of whether the EU should take issue with the Italian tax laws that encourage inward investment by offering significant tax advantages to the foreign investor. 

The EU holds that such tax schemes are discriminatory towards the country’s own citizens. Vincenzo Senatore is quoted in International Advisor as follows:

“Vincenzo believes the EU is getting ready to take Italy and other states to the European Court of Justice to challenge their “discriminatory” tax measures.” He further commented, “If the European Commission refers a member state to the court of justice, it is up to the court to verify that every member state is in compliance with the European treaty.”

Vincenzo pointed out “that there have been many Italian fiscal reforms that were challenged by the EU in court, for which Italy was forced to amend its legislation. For instance, there have been several complaints following the introduction of reduced rates for Italian citizens living abroad who bought their first home in Italy; or even regarding Italian pensioners living abroad who were exempt from paying IMU (the Italian property tax).  In those cases, the EU referred the Italian government to the court of justice.” Vincenzo believes this case won’t be any different.

Italy has three separate tax regimes aimed primarily at foreigners which have proved to be highly popular.   

• The 7 per cent flat-rate tax applicable only to retired ex-pats who wish to retire to Italy.  To take advantage of this benefit:
  • they cannot have been resident in Italy for at least the past five tax years
  • Their pension must be paid by a foreign entity
  • Their country must be in administrative co-operation with Italy
  • They must live in a southern Italian village with no more than 20,000 inhabitants
• The “substitute tax regime”. This permits individuals who have not been Italian residents and subject to Italian tax for at least nine of the past ten years to pay €100,000 substitute tax in lieu of their tax on foreign-sourced income
• The “impatriate” tax aimed at skilled workers, it allows 50 per cent exemption for Italian-sourced employment and self-employed income

Vincenzo commented, “I believe the €100,000 flat tax is going to be the main fiscal measure that the European Union is going to contest; this also provides a €25,000 incentive for the individual’s relatives which can be perceived as quite discriminatory.”  He thinks that for financial advisers working with ex-pats looking to move to Italy, it should be business as usual. “Currently advisers are probably trying to get maximum tax relief for their clients, so they will generally encourage them to get those tax reliefs as soon as possible. Since no law has retroactive remit when it comes to fiscal matters, they should not experience any consequences.”

Furthermore, he says “that is also because every government will try to monetise as much as possible. Future sanctions (if any) from the EU will take time, so for the time being the tax regimes will stay in place, because [the Italian government] would want to keep the promises it made.”

Vincenzo is an experienced well-regarded duly qualified avvocati and solicitor.  Vincenzo has capacity in many jurisdictions in Italy, England & Wales and the USA.  His expertise extends across a variety of areas and acts for both commercial and private clients.  Vincenzo advises a raft of commercial legal matters, including M & A, commercial and residential real estate, cross-border litigation and contentious commercial matters as well as complex intellectual property issues.

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