In the Circular Letter No. 6/E/2016 the Italian tax authority has analysed Leverage Buy-Out in relation to the tax treatment for, inter alia, the capital gains deriving from the sale of equities owned by a Special Purpose Vehicle (i.e., SPV) not established in Italy; in particular, the tax authority outlined the need to verify that the income recipient is an individual having economic substance (i.e., a beneficial owner).
Nonetheless, this approach involves an extension of the concept of the “beneficial owner”, which is not found in the OECD Model as regards capital gains. Moreover, questions arise about the compatibility of such approach with the freedom of establishment and with the principle of “forum shopping” provided for by the European regulations.
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