(Finance) – A US tax rule has the potential to create disastrous effects for Italian savers who invest in mutual funds of Italian managers, which in turn have in their portfolio financial assets issued by US “partnerships”.. In fact, according to US tax regulations, partnerships with one or more foreign partners are obliged to apply a withholding tax of 37.5% on the profits pertaining to the foreign partner.”Attention: pertaining to, and not already distributed to the foreign partner – it is the ‘warning issued by president of ExportUSA, Lucio Miranda.
“For foreign partners – he explains Miranda – means anyone who is not a US tax resident. The foreign shareholder will then have to file his tax return in America at the end of the year, even if he has no taxes to pay in the United States.”
So far – underline from Export USA – nothing strange: the law is aimed at reduce tax avoidance of large taxpayers. However, over the years, this provision has gone beyond its original purpose, dragging even small Italian savers into the mesh of its implementation. When the Italian saver invests in an investment fund managed by an Italian intermediary, it may happen that within the investment made there are also financial assets issued by American “partnerships”. Currently, there are many American “partnerships” that create and manage ETFs (Exchange Traded Funds), for example.
The result is that the Italian fund manager receives notices from US financial firms, requesting to provide, within a few days, the tax number for non-residents, ITIN, of the saverworth the application of penalties in addition to the 37.5% withholding tax. Since it is impossible to obtain an ITIN in such a short time, the net result is that the Italian saver sees the fruits of his investment reduced with expropriation percentages.
“We therefore recommend to Italian savers – he concludes Miranda – to check this aspect with the Italian fund manager who follows their operations”.