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Italian Tax System
Italian Tax system reform
Over the past years, Italy has been implementing a broad reform of the Italian corporate tax system, with new amendments being introduced annually:
- Further reduction of corporate income tax rate to 27,5% (from January 1st, 2008);
- Partial exemption (95%, from 2008) of capital gains arising from the disposal of qualified participations into Italian and foreign corporations ("Participation Exemption");
- Abolishment of the full imputation system on distribution of corporate profits, i.e., the dividend tax credit, and introduction of a 95% exclusion on dividend distributions;
- Introduction of a joint taxation regime for Italian/foreign corporations belonging to the same group to consolidate their tax base if the parent company is resident in Italy;
- Exemption of capital gains reinvested in companies in start up.
