ITALY REVERSE TAKEOVER TAX ILLEGAL ECJ
April 1st, 2006
BY KEITH NUTHALL
CAPITAL duties should not be levied on reverse mergers within the European Union (EU) if those deals only receive regular taxation at a marginal rate of up to 0.5%, the European Court of Justice (ECJ) has ruled. In an Italian case, judges declared illegal a national law that insisted reverse mergers, (where subsidiaries takeover a parent), should attract a proportional registration duty of 1% of the transaction value, regardless of their direct taxation. This is because under Italian tax law, these deals are taxed up to 0.5% where a parent is ...
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