The new listed real estate companies, the Siiq, will be able to benefit from the preferential tax regime even if legally controlled with a 51 percent stake. The detail is contained in the text of the amendment to the Finance Law that the Government presented to the Senate and with which the new subjects are established. The Executive has kept faith with the anticipations of recent days by officially presenting its project which aims to stimulate the real estate business aimed at rental activities. Starting from June of next year, when the new system comes into force, the Siiq will be able to opt for a special regime which will exempt them from income taxes as long as at least 85% of the net profit deriving from the real estate rental activity has been distributed to members in the form of a dividend. In lieu of those taxes, members will pay a 20% substitute tax. It is the same rate expected on all capital income and this explains why the withholding tax will not be applied on Siiq profits paid to pension funds, mutual investment funds and asset management. The final fruits of those investments will in fact be taxed downstream at the same rate of 20 percent. The fact remains that entrepreneurial activity in the brick and mortar sector will have a preferential tax treatment compared to that in force on other production sectors. The Government provision outlines the boundaries within which the concessions will operate. To be able to benefit from it, listed real estate companies - or even their subsidiaries with a share of at least 95% that carry out real estate activities - will have to be resident in Italy and their securities "traded on Italian regulatory markets" (which in truth could be considered in conflict with community regulations). Furthermore, no shareholder can hold a stake exceeding 51% and at least 35% of the securities must belong to shareholders with no more than 1% of the capital. What is more important, the tax relief is subordinated to the fact that the real estate company carries out "predominantly the real estate rental activity". A condition that will be considered satisfied if at least 80% of the assets are represented by owned properties whose revenues account for at least 80% of the positive components of the income statement. In this way the Government wanted to crowd out the more speculative brick and mortar business, which is concentrated in the sole sale of properties. All this is confirmed by the fact that the substitute tax will be subordinated to the maintenance of ownership of the properties transferred to a siiq for at least three years. The government amendment also designs a facilitative regime for entry into the special regime which will entail "the realization of properties at normal value". The capital gains thus generated will also be subject to a substitute tax (of that on corporate income and the regional tax on productive activities) of 20 percent which can be spread up to 5 annual installments of the same amount. A subsequent decree from the Economy will be responsible, among other things, for defining the regulatory framework and prudential supervision of siiqs by the "competent authorities" (without saying, however, what they will be).
source: Sun 24 Hours
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