Repatriating one or more stages of production carried out across the border by a subsidiary company or by a foreign branch could be necessary due to the emergency linked to the spread of coronavirus.
In the planning of the return to Italy, it must first be remembered that, for tax purposes, the tax period must be considered in a uniform manner. The headquarter transfer does not determine two different tax periods and, consequently, it is necessary to verify whether, in the year of repatriation, the company should be considered resident in Italy or abroad.
According to article 73, of Presidential Decree 917/1986 (Tuir) a person is considered resident for tax purposes when he has at least one of the elements in Italy for most of the tax period that suggest residence (registered office, administrative headquarters, or corporate purpose).
Taking into account that 2020 is a leap year, this condition occurs when the 184 days are exceeded. Simplifying, therefore, if a company transfers its headquarters in Italy by 1 July 2020, it is considered resident in Italy from that year. However, it is necessary to verify how the transfer of the registered office in Italy is treated by the legislation of the foreign state for the different effects that may arise (i.e. time of cancellation of the company from the Register of companies). In the previous example, therefore, the repatriated company will be fiscally resident in Italy in 2020 if the cancellation from the foreign business register takes place by 1 July 2020. If, however, the transfer qualifies as a dissolution hypothesis, the company will assume as the initial date of it’s tax period in Italy, the one of the transfer, regardless of whether it occurs in the first or second part of the year.
The tax valuation criteria of the assets and liabilities belonging to the company moved to Italy are defined by article 166-bis of the Tuir .
The first assessment must be made based on the location of the foreign company.
- If it comes from a state belonging to the EU or white list (Ministerial Decree of 4 September 1996), the incoming tax value of the assets and liabilities is the market value.
- The same criterion also applies in cases of origin from non-EU states or non-white lists in the event of an agreement following rulings based on article 31-ter of Presidential Decree 600/73.
- In the other cases the entry tax value of the assets is assumed to be the lower of the purchase cost, the book value and the market value; for liabilities, however, the higher of the same values must be assumed.
Finally, it should be noted that, if the subject of the transfer is a company or a business unit, the value must be considered taking into account the goodwill.