Emanuele Falorni - 16/11/2022
In this issue of our Taxnews, we report that corporate companies, private legal entities, trusts and similar legal arrangements will soon be required to communicate who their beneficial owners are.
1. Who has to comply with this obligation and what the procedure is
Pursuant to Legislative Decree no. 90 of May 25, 2017, which was enacted to implement EU Directive 2015/849 and part of Italian anti-money laundering legislation, the entities listed below, including corporations, will soon be required to communicate to the Italian Business Register who their beneficial owners are:
The identity of the beneficial owner(s) shall be communicated solely via telematic link to the Business office of the territorially competent Chamber of Commerce.
The communication must be digitally signed:
Since the fulfilment of this obligation may not be delegated to a practitioner, the directors (or at least one of the directors) of companies and other entities required to communicate the identity of their beneficial owners must have a personal digital signature. Practitioners are not allowed to sign the telematic communication on behalf of a client; they are only authorized to file it.
2. Deadlines for filing the information about beneficial ownership
It should be noted that the entities required to fulfill the new obligation are not yet able to do so. They are supposed to communicate the information about their beneficial ownership within 60 days from the date on which the Ministry of Economic Development will issue a specific decree certifying that the communication systems set up for this purpose are fully operative. However, this certification has not been published yet.
Entities subject to the obligation incorporated after the publication of the above-mentioned certification shall have to communicate the required information about their beneficial owners within 30 days from the date on which they have registered with their Chambers of Commerce, or, in the case of trusts and similar legal arrangements, within 30 days from the date of their incorporation.
The identity and information of any beneficial owner has to be confirmed periodically within 12 months from:
Corporate companies may confirm the information or notify any changes thereof when they file their financial statements, in the manner that shall be prescribed.
3. Identification of beneficial owners
According to the aforesaid Legislative Decree 90/2017, the beneficial owner(s) is the natural person(s) on whose behalf a transaction or an activity is carried out, or, in the case of legal entities (including companies), the natural person(s) who ultimately owns or controls an entity or is its beneficiary.
A corporate entity’s beneficial owner(s) is one and the same with the natural person(s) who ultimately owns or controls it either directly or indirectly. Hence, an entity may have multiple beneficial owners.
In the case of corporations:
If the direct or indirect ownership of an entity cannot be determined unequivocally even when applying the above quantitative criteria, the beneficial owner(s) is one and the same with the natural person(s) who ultimately controls that entity through:
If ownership of an entity cannot be determined even when using the above criteria, the beneficial owner(s) is the natural person(s) with powers of legal representation, administration or executive management of that entity.
In the case of private legal entities (such as recognized foundations and associations, i.e. with legal personality), the beneficial owner(s) of an entity is the natural person(s) who is:
In the case of a trust or of a similar legal arrangement, the beneficial owner(s) is:
Sole proprietorships and partnerships do not have legal personality, hence they are not required to communicate who their beneficial owners are. To date, non-recognized foundations and associations are not required to do so either (pending official confirmation by the Ministry of Economy and Finances).
Entities that fail to communicate the identity of their beneficial owner within the prescribed deadlines are liable to be fined for breaching the obligation by the Chamber of Commerce territorially competent. Pursuant to article 2630 of the Italian Civil Code, the administrative fine ranges from 103 to 1,032 euros; the fine will be reduced to a third if the communication is filed no later than 30 days after the prescribed deadline.
Given that in many cases, in application of the complex anti-money laundering legislation that established the obligation, the identity of an entity’s beneficial owner(s) may not be easily determined in the short term, we suggest that you start studying the issue before the obligation comes into force.
We will be happy to provide our customers with any assistance they may need to comply with this obligation to communicate beneficial ownership information.