Italian PEX Regime

Capital gains deriving from the disposal of shares held in a subsidiary are subject to 1.2% CIT (i.e. 24% CIT on 5% of the capital gain), provided that the following conditions are met:

  1. 12-month holding period;
  2. the company has booked the shares as fixed financial assets in the first balance sheet of the holding period;
  3. the subsidiary is not resident in a jurisdiction which has a privileged tax regime;
  4. the subsidiary carries on a real business activity.


  • As regards condition b), on 3 December 2020, the Italian Accounting Committee clarified that: “shares are booked as fixed financial assets if the enterprise foresees to sell them after an extended period of time and if it has the capability to maintain them for an extended period of time. Extended period of time means a period not lower than 12 months”.
  • As regards condition d), the Italian tax authorities’ ruling no. 33/2021 clarified that the concept of “business activity” for PEX purposes: (i) is broader than the definition indicated in art. 2195 Italian Civil Code; (ii) should be analysed from a substantial viewpoint and (iii) is met where there is an operating structure suitable for producing/selling goods or services potentially generating revenues.
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