Italian judgment on the treaty entitlement of an English trust

Abstract

The Provincial Tax Court of Pescara (Italy) ruled over the treaty entitlement of an English trust subject to UK corporation tax. The Court upheld the assessment of the tax office, which, despite the official administrative guidelines, denied the treaty benefits because the trust does not qualify as a legal entity. The author criticizes the judgment in the light of the purpose of income tax treaties and of the clarifications laid down by the Organisation for Economic Co-operation and Development Commentary.