The paper compares the tax reforms affecting asset management that were introduced in Italy on 1 July 1998. After an overview of the main lines of the reform, the work describes the basic principles of taxation in France, Luxembourg, Germany and the United Kingdom, the leading European countries as regards the demand and supply of asset management products. The advantages and the problems of the tax rules applying to such products in Italy are examined in comparison with other European markets. Two questions are considered: whether the system is able to ‘tether’ the country’s endogenous savings; and whether it will be able to attract ‘exogenous’ savings to Italy, i.e. financial investments of non-residents. The system of taxation is also examined in the context of the ‘Monti Directive’ on non-residents’ interest income. The provisions of the directive, which include only bond funds within the field of application of Community law, may lead to major distortions in this sector.
The study finds that in the long term the system of taxation of investment funds, which is based on the return accrued and is applied only in Italy, may discourage domestic savings from being ‘tethered’ to the country: the exemption from taxation of foreign funds and capital gains on them increases tax deferral and affects the rate of return. There are clear advantages in having different corporate taxation of intermediaries, affecting the structural delocalisation of supply. In the medium term, Italian savings may be attracted by the larger yields that other legal systems allow operators to offer non-residents, partly by shifting tax savings onto service prices. A reorganisation of Italy’s tax structure could come about through the change-over to a single tax rate and the reform of the taxation of real estate funds.
