Incentives for the transfer of business to Italy

Legislative Decree No 209 introduces a facilitated regime for businesses repatriating to Italy from non-EU/EEA countries, offering 50% tax exemptions for transferred income. However, strict conditions apply, and forfeiture may occur if the business relocates outside the State within specified timeframes.

Article 6 of Legislative Decree No 209 of 27/12/2023, in force since 29/12/2023, introduced a new facilitated regime for ‘impatriated’ business in Italy.  

The business subject to repatriation must be exercised in an associated form: from the regulatory provision, the facilitation is excluded for individual entrepreneurs.  

The economic activities transferred to Italy must be carried out in a country not belonging to the European Union or to the European Economic Area. Therefore, the relief does not apply to companies transferred to Italy previously carried out in an EU or EEA country. 

In this regard, the Explanatory Report to Legislative Decree 209/2023 specifies only that the transferred economic activities involved in the relief also includes business carried out by companies belonging to the same group. 

The transfer should however involve the assets (or the business branch) and not only the residence of the legal entity to which they refer. However, the commencement in Italy of an activity completely different from the one already carried out abroad should be excluded from the relief, since it is not, in that case, a true ‘transfer’. 

The relief, therefore, would only concern activities already exercised (in a non-EU country) and impatriated, and not the start of new ones. 

On the other hand, paragraph 2 expressly excludes from the eligible activities those exercised in the territory of the State in the 24 months preceding their transfer.  

The income of business and self-employed work transferred within the territory of the State under the above-mentioned conditions does not contribute to the formation of taxable income for income tax purposes or the value of net production for IRAP purposes, for 50% of the relevant amount. 

The facilitated regime applies in the tax period in progress at the time of the relocation and in the five tax periods thereafter: in actual fact the facilitation operates for six tax periods. 

In the case of delocalisation of the business transferred to Italy (so-called ‘offshoring’), the relief is forfeited if the beneficiary transfers, completely or even potentially, the business previously ‘impatriated’, outside the territory of the State: in the five tax periods following the expiry of the relief scheme; or in the following ten tax periods in the case of large enterprises. 

In case of forfeiture of the relief, the tax administration recovers (so-called recapture), the taxes not paid during the period of the relief with interest: the rules do not provide for the application of penalties.