Blacklist
The Stability Law for 2016 abolished blacklists on the deductibility of costs and CRCs as of 1 January 2016. As a result, Jersey and Guernsey will no longer appear on any Italian blacklist.
From 1 January 2016, the only general criterion for the application of Italy’s CFC rules will be the low level of corporate taxation of the CFC. A rate of 50% lower than the Italian corporate tax rate (which is 27.5% for 2016 and will be 24% for 2017 onwards) is considered as a low level of taxation, both for general and special regime.
This will mean that the CFC provisions will continue to apply as they do in all jurisdictions who meet the low level of taxation criteria but there will be no listing of these jurisdictions.
Whitelist
In early 2016, Italy’s whitelists relating to the tax treatment of interest from government bonds and listed companies will be updated; taking into account the agreements on exchange of information, compliant with the international standards, that have entered into force.
As Guernsey and Jersey have legal instruments in force allowing for the exchange of information with Italy, they will both be included on the whitelist.
Geoff Cook, chief executive, Jersey Finance, said: “This is welcome news for our island, with Italy, a major EU country removing the blacklisting. It is testament to the determined and collaborative work between Jersey‘s government, industry and regulator on our tax transparency agenda that has helped result in this positive outcome for our future business opportunities.”
Dominic Wheatley, chief executive, Guernsey Finance, said: “We’re pleased to see that Italy has recognised the fact that there was no justification for Guernsey to have previously been blacklisted. Guernsey is able to demonstrate a long track record in its commitment to upholding the highest standards of transparency and exchange of information and in many cases leads and exceeds a number of EU member states.
“Confirmation that we will now appear on Italy’s whitelist going forward should give full confidence to all those looking to do business in Guernsey and enjoy the high quality of the financial business environment here,” he said.
