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THE ASSIGNMENT OF A RECEIVABLE FOR SECURITY PURPOSES IS NOT RELEVANT FOR IDENTIFYING THE MERE ‘BENEFICIAL OWNER’ OF INTEREST

The article by Giovanni Panzera da Empoli (published in Tax News, a supplement to the Rivista Trimestrale di Diritto Tributario, https://www.taxnews.it/Tool/Evidenza/Single/view_html?id_evidenza=833) addresses the identification of the “beneficial owner” of interest, for purposes of the withholding tax exemption under Art. 26-quater of Presidential Decree No. 600/1973, in the case of an assignment of a receivable for security purposes carried out by a non-resident creditor.

The civil-law analysis of the security assignment – a transaction with a variable underlying cause, characterized by an immediate but “conditional” transfer effect and by an obligation to re-assign the receivable upon performance – together with the related accounting treatment, demonstrates that the typical scheme of dissociation between tax ownership of the income and beneficial ownership cannot be replicated in this case. The same contract cannot simultaneously constitute both the source of the transfer of income ownership to the assignee and the source of the assignor’s obligation to re-transfer that income (the configuration typical of beneficial ownership).

On this basis, the contribution critically examines Resolution No. 88/E/2019 of the Italian Revenue Agency, which – insofar as it holds that the security assignee qualifies as beneficial owner while the assignor remains the owner of the receivable – results in an interpretatio abrogans of Art. 26-quater, paragraph 4, letter c) of Presidential Decree No. 600/1973.

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