Italy Tax Agency Clarifies Tax Treatment of Income From Carried Interest Shares

The Italian Revenue Agency Sept. 29 issued Letter No. 255/2025, clarifying the tax treatment of income from carried interest shares. The taxpayer, a permanent establishment (PE) of a Luxembourg advisory company, implemented an investment plan allowing managers to indirectly subscribe to carried interest shares in a fund through a dedicated vehicle and entitling them to potential extra returns under specific conditions. The taxpayer sought clarification on whether the returns from the carried interest shares could be classified as financial income even if the five-year holding period required by Legislative Decree No. 50/2017 isn’t met. Upon review, the Tax Agency clarified ...