Land-rich clause Italy: Impact on non-resident investors
© Алина Бузунова –

Land-rich clause Italy: Impact on non-resident investors

3 min.

Under Article 1 of the 2023 Italian Budget Law, which came into force on 1 January 2023, important changes have been introduced concerning the taxation of indirect transfers (through the transfer of participation) of Italian immovable property, in line with the provisions of Article 9(4) of the OECD Multilateral Instrument (MLI). The Ecovis experts know the details.


In Italy, non-resident individuals and non-resident companies without a permanent establishment in Italy, are taxed separately on any Italian source income.

Income and capital gains from immovable property are generally taxable in Italy if the property is located in Italy, with some exceptions related to capital gains realised after a minimum period of possession.

Capital gains realised on the disposal of participations in Italian resident entities are generally taxed through a substitute tax of 26%. However, there is no taxation in Italy for disposals of listed companies or if the transferor is a resident of a state which allows an adequate exchange of information with Italy.

We can support you in assessing the tax implications of transferring assets in Italy.
Simona Reggiani, Tax Income Partner, ECOVIS STLex Studio Legale Tributario, Genoa, Italy

The introduction of the “land-rich clause” in Italy

Against this background, the 2023 Italian Budget Law has essentially integrated Article 9(4) of the MLI into Italian legislation by introducing important changes to the Italian tax code. Under the new provisions, capital gains derived by non-resident individuals and entities from the sale of participations in non-resident companies and entities are taxable in Italy if, at any time during the 365 days preceding the transfer, these shareholdings derived more than 50 per cent of their value directly or indirectly from immovable property located in Italy.

The impact of the new legislation for non-resident investors (individuals and entities)

The new legislation has an immediate impact on investors residing in countries with double taxation treaties that already include a “land-rich clause” in line with the MLI. In addition, the provisions also have a direct impact on foreign investors residing in countries without a double taxation treaty with Italy or that are not protected by an existing tax treaty. The impact will be even greater once the MLI is ratified by Italy, except for those countries which opted out of this MLI provision entirely by reserving the right for the whole of Article 9 not to apply.

From 2023 onwards, non-Italian-resident operators must be very careful when evaluating cross-border operations involving entities that directly or indirectly own real estate properties in Italy.

For further information please contact:

Simona Reggiani, Tax Income Partner, ECOVIS STLex Studio Legale Tributario, Genoa, Italy
Antonio Argenio, Partner ECOVIS STLex Studio Legale Tributario, Milan, Italy

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Antonio Argenio
ECOVIS STLex Studio Legale Tributario
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Phone: +39 010 55 32 41