Actual property securitizations: steering from the Italian tax authorities on the relevant tax therapy | Hogan Lovells
A duplicate of the choice is out there right here.
Securitizations below article 7.2
Artwork. 7.2 was launched by Decree-Legislation No. 34/2019 to be able to enable the acquisition by SPVs of actual property, registered movable property and in rem rights or private rights over these belongings and the securitization of the proceeds from these belongings.
Questions of interpretation of the tax system
For the reason that promulgation of artwork. 7.2 is pretty latest, a sure variety of interpretation issues arose throughout the structuring of securitizations ruled by these new guidelines. Actually, uncertainties existed as to the tax therapy relevant to the RE SPV, to the asset-backed bonds issued by it and to the system of switch rights and documentary tax relevant to transactions carried out by the RE SPV.
The clarifications offered by the choice
The choice is the primary official place issued by the ITA on the tax regime relevant to RE SPVs working below artwork. 7.2 and provides some essential confirmations and clarifications.
The case examined within the judgment involved a RE SPV arrange with a view to buying sure photovoltaic installations, to develop them and, lastly, to generate the proceeds from their rental or disposal. The context of the choice specifies that the monetary means essential to finance the acquisition of photovoltaic energy crops are raised by the RE SPV by means of the problem of a single class of notes subscribed by two banks. It’s also specified that the RE SPV installations, belongings, liabilities, prices and revenue associated to its exercise is not going to be recorded within the RE SPV steadiness sheet or in its revenue assertion, however can be reported in its explanatory notes (nota integrativa) alone.
The small print offered by the ITA on the tax regime relevant to SPV RE could be summarized as follows:
a) Earnings tax
For revenue tax functions, the ITA has confirmed that the ideas set out in Round No. 8/2003 on the securitization of receivables (and extra not too long ago confirmed by choices No. 18 / E of January 30, 2019 and No. 56 / E of February 15, 2019) additionally apply within the context of securitization transactions ruled by artwork. 7.2. In different phrases, the imposition within the arms of the SPV RE of non permanent variations, if any, ensuing from doable time lags between the constructive and unfavorable flows referring to actual property belongings is excluded, insofar as all of the quantities that are particularly meant for the efficiency of obligations owed to noteholders and third get together collectors in respect of the securitization, that’s to say so long as the belongings stay topic to the segregation regime within the arms of the RE SPV. Company tax (IRES) and regional tax on productive exercise (IRAP) will due to this fact solely grow to be payable on the surplus product out there on the finish of the securitization, if relevant.
b) Tax therapy of tickets
As for the tax regime for tickets, the ITA confirmed that the tax regime offered for by Legislative Decree No. 239 of April 1, 1996 (“decree 239”) utilized to tickets issued by RE SPV. Accordingly, funds of curiosity and different revenue to Noteholders can be topic to the 26% substitution tax (imposta sostitutiva) regime below which sure holders of non-Italian resident notes might profit from complete tax exemption in Italy. Certainly, Decree 239 gives that the stated substitution tax doesn’t apply to curiosity funds made in favor of a non-Italian resident (i) residing in a rustic which acknowledges the correct of the Italian tax authorities to an trade of ‘sufficient data and (ii) assembly all the necessities (e.g. useful proprietor standing) and procedures set out in Decree 239 and within the related implementing guidelines, amended once in a while.
From a VAT perspective, the ITA has confirmed that the actions carried out by RE SPV for the acquisition, administration and valuation of actual property are thought-about a posh exercise of actual property asset administration, in itself topic to VAT. Consequently, the choice confirmed that such an exercise is topic to the strange VAT regime outlined by artwork. 10 (1) numbers 8 and 8-bis of presidential decree n ° 633/1972. Specifically, these actions are exempt from VAT, until the RE SPV workout routines the correct to use VAT. Consequently, the RE SPV can be entitled to get well the enter VAT incurred throughout the buy of products and companies associated to its exercise in keeping with the strange guidelines set out in Articles 19 et seq. of Presidential Decree No. 633/1972.
d) Switch taxes
Lastly, with regard to the switch rights due throughout the acquisition of the photovoltaic crops by the RE SPV, ITA clarified that the registration, mortgage and cadastre taxes are due for his or her fastened quantity (in accordance with the Article 7.1, paragraph 4-ter regulation) on the act of switch regarding actual property which was beforehand the topic of non-performing or terminated finance leases. These explicit factual circumstances have to be explicitly documented within the related public deed of switch. Conversely, in all different circumstances, registration, mortgage and cadastral taxes can be due at their strange proportional charges.
The choice is prone to characterize a lift for the implementation of securitization transactions carried out in accordance with Article 7.2. Certainly, the considerably impartial tax regime relevant to SPV RE de facto assimilates these autos to the examined construction of actual property funding funds and is prone to arouse the curiosity of overseas traders who can profit from a complete tax exemption on the product. upon their funding within the notes issued by the RE SPV.