ITALY: INCOME TAX TREATY WITH HONG KONG ENTERS INTO FORCE

An income tax treaty between Italy and Hong Kong has entered into force, with the exchange of instruments of ratification. The official communication of the Italian Ministry of Foreign Affairs announcing this exchange was published in the official journal on 26 October 2015.

BLACK LIST, WHITE LIST

Italy’s “black list” and “white list” of jurisdictions were unaffected by the exchange of the treaty instruments. Hong Kong has not yet been included on the “white list” of countries allowing an adequate exchange of information. Accordingly, the costs of goods or services are still subject to special reporting and scrutiny if the amounts changed to Italian taxpayers are greater than an arm’s length price.
Hong Kong also still appears on the “black list” of countries for Italian CFC rules and the full taxation of inbound dividends and the reversed burden of proof when individuals move their tax residence.

Read an October 2015 report [PDF 232 KB] prepared by the KPMG member firm in Italy: Double taxation agreement between Italy and Hong Kong is in force