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“The Italian Parliament has approved the Stability Law for 2016, which has revised the relevant provisions of the Italian Tax Code on black lists on corporate taxation and the CFC rules. An informal translation of the relevant provisions of the Law is attached.

As a result the Italian black list on the 'deductibility of costs' has been abolished as from 1 January 2016. The black list on Controlled Foreign Companies (CFCs) has been abolished as well. Therefore, Jersey (and Guernsey) will not be listed any more as from 1 January 2016. As from 1 January 2016, the only general criterion for the application of the CFC rules (without list) will be the low level of corporate taxation of the controlled foreign company. It is considered as low level of taxation, for both general and special regimes, a rate of 50% lower than the Italian CIT rate (which is 27.5% for 2016 and will be 24% for 2017 onwards). This will mean that the CFC provisions will continue to apply as they will to all jurisdictions who meet the low level of taxation criteria but there will be no listing of these jurisdictions. The Italian authorities are informing the EU Commission of these changes and this should mean that Italy is not included among the Member States that are said to have a black list.

We have also been informed that early 2016, via a Ministerial Decree, the Italian “white list” for the purposes of tax treatment of interest from government bonds and listed companies will be updated, taking into account the agreements on exchange of information, compliant with the international standards, entered into force in the meanwhile. Since both Jersey and Guernsey has a legal instrument in force allowing for the exchange of information with Italy, we are informed that both jurisdictions will be included in the white list.

The Jersey and Guernsey authorities together have made representations to the Italian authorities on a number of occasions expressing the view that given the level of cooperation extended on tax information exchange both on request and automatically there was no justification for their being black listed. The changes now announced by the Italian authorities are therefore warmly welcome.”

Great news and yet further recognition of the high standards consistently  applied in the Channel islands.