"NEWS May 17, 2016-transparency Regime Only RH framework PF 16"

Posted by on May 17, 2016

Article 116 Tuir discipline the option for tax transparency with regard to restricted company owner base, which provides for the possibility of imputation of income produced by a resident company, to shareholders regardless of the actual perception of same, borrowing the mechanism provided for partnerships.

While for the latter the taxation regime for transparency is the "natural" scheme for joint stock companies represents an alternative mode of taxation, and can only be activated on option than the "ordinary", with "direct" taxation of income creator.

In the event that you exercised option for transparency, subsequent distribution of profits, which are then already been taxed, it is fiscally neutral.

The option provided for in article 116 Tuir may be exercised only by limited companies with shareholding structure made entirely from natural persons (including business owners) in numbers not exceeding 10 subjects (20 if cooperatives) and with revenues exceeding those provided for using the sector studies with reference to the Declaration concerning the financial year preceding that for which the option is exercised.

The communication must be made by the company transparent to the IRS with the statement (picture OP – section III-mod. Only SC 2016) presented in the tax period from which you want to practise or renew or confirm the option (article 16 d. Lgs. 175/2014).

As regards the allocation of losses of the investee company transparent, it is necessary to distinguish between:

  • retained losses generated during ante transparency: can never be attributed to shareholders, but are used by the company-through deduction from the taxable income according to the rules laid down in article 84 of the tax code;
  • losses which arose in the period of validity of the option: instead, they are allocated to members in proportion to their respective shareholdings and within its quota of net equity in the company.

In this context, the implementing Decree of August 4, 2004 provides that:

  • shareholders ' equity at the end of the tax year of the subsidiary is determined without taking into account the operating loss and considering the contributions in cash and in kind are made later, but by the date of approval of the financial statements of the investee;
  • any surpluses of losses, made during the effectiveness of the option may not be ever charged to members. These surpluses will instead be used by the investee down income of future periods; in such a case the part not attributed to members is highlighted by transparent company under RS.

The Member is a natural person of transparent company must therefore indicate under RH mod. Only one PF the data to declare the income/loss to him.

If participation in transparent company was however taken within the company and not on a personal basis, the share of income or loss shall not under RH, but under RG or RF.

The data required to build the RH framework – section II "customer data held in transparency regime" must be by a special transparent prospectus that the company will have to issue to each Member, on the basis of the data provided under TN of the mod. ONLY SC, containing:

  • the denomination, headquarters, the company's tax code;
  • the personal details of the Member;
  • the total income or loss attributable to shareholders, indicating whether it is loss reportable indefinitely;
  • the percentage share of profit due to the Member;
  • the percentage share of participation in losses due to the Member;
  • the share of minimum income calculated in accordance with article 30 Law 724/1994, in the case of companies not operational;
  • the share of withholding tax incurred by the company;
  • the share of taxes paid abroad, with reference to foreign income in earlier tax periods for exercising the option;
  • the proportion of deductible expenses;
  • the fee of advances attributed;
  • the share of surplus IRES attributed to the Member.