Italy Tax Agency Clarifies Anti-Abuse Rules for Taxation of Interest

The Italian Revenue Agency Dec. 1 issued Letter No. 299/2025, clarifying anti-abuse rules for the taxation of interest. The taxpayer, a company, intended to implement a significant investment plan by issuing unsecured bonds to shareholders, directors, employees, and investors, and pay a single coupon at maturity, with an annual compound interest. The taxpayer sought clarification on whether the transaction constituted abuse due to a timing mismatch between the taxation of interest income for the subscribers and the interest expense deduction for the taxpayer. Upon review, the Tax Agency clarified that the transaction didn’t constitute tax abuse because: 1) the financial ...