Controlled Foreign Company (CFC) legislation: Italian style!

Roberta D’Angelo LL.M, Ernst & Young – ITS (London); email – rdangelo@uk.ey.com

1. Introduction

The recent financial crisis that has indiscriminately affected all countries has resulted in governments paying more attention to domestic anti-avoidance legislation. The main reason lies in the recovery of national economies through the reduction of outflow capital and the incentive of inflow income rather than only counteracting tax avoidance. The latter has increased over the past decades, especially after the removal of trade and capital barriers, by the use of tax haven countries both by wealthy individuals and companies. In this regard, Controlled Foreign Company (CFC) legislation is considered a suitable instrument to obtain the above mentioned objectives.