Uncertainties still surround the tax treatment of trusts on a supranational basis
The tax regime of trusts in the international context is still characterised by aspects of uncertainty, also following the draft circular published for consultation by the Revenue Agency.
following is taxed directly on the resident beneficiary – as capital income:
- Foreign or resident transparent trusts
- Opaque foreign trusts
- Paradise trusts
However, it is not clear, for example, whether the beneficiary of a transparent trust is able to deduct taxes paid abroad by the trust.
In another respect, the tax argument – emerging from the draft circular – that trusts established in EU/EEA countries could also be regarded as paradise is not convincing.
Paolo Giovannini and Dario Augello highlighted some open issues in the article ” Persistent uncertainties on the tax regime of trusts on a supranational basis” on Eutekne.