Amendments to the tax regime for foreign deemed dividends : remarks and open issues

The Italian government has finally issued a Decree amending critical areas of the 2004 corporate tax reform. The Decree is important as it amends the tax treatment of foreign deemed dividends with effect from 1 January 2006, i.e. the proceeds accruing on participating financial instruments that do not entitle the holder to part of the share capital or the net worth of a company.