Critical Insights into the Tax Regime Applicable to a Transfer of a Business by an “Italian Permanent Establishment” in Exchange for Shares of the Transferee

In this note, the authors provide some critical insights on Ruling No. 63/E of 9 August 2018, which clarifies the Italian tax treatment of a transfer by a foreign tax resident transferor of an Italian business in exchange for shares of an Italian tax resident transferee. They also set out the relevant legal reasoning and logic based on which full tax neutrality should also be granted when the transferee is non-resident.