Skip to content With ruling No. 16/2026, the Italian Revenue Agency once again addressed the issue of cross-border successions, examining a particularly delicate aspect: the applicability of the inheritance and gift tax exemption under Article 3(4) of Legislative Decree No. 346/1990 (Inheritance and Gift Tax Consolidated Act – “TUS”) to transfers mortis causa in favor of non-EU foreign public entities. The clarification is of systemic importance, as it reaffirms a strict interpretation of the requirement of the “condition of reciprocity.”
The Case: A Swiss Municipality as Heir to an Italian Company
The ruling request was submitted by a municipality of the Canton of Ticino, a public territorial entity of the Swiss Confederation, appointed universal heir of a Swiss citizen who died in Switzerland, where she had her domicile and residence.
The will, executed in accordance with Swiss law, transferred to the municipality — among other assets — a 100% shareholding in a limited liability company (S.r.l.) with its registered office in Italy, of which the deceased was sole shareholder and sole director.
The applicant municipality asked whether, for the purposes of filing the inheritance tax return in Italy, such transfer could benefit from the exemption provided for under Article 3(4) of the TUS, as a transfer in favor of a foreign public entity.
Territorial Scope of the Tax and Taxable Event
The Italian Revenue Agency clarified, as a preliminary matter, that the transfer falls within the scope of Italian inheritance tax.
Under Article 2(2) and (3)(b) of the TUS, where the deceased was not resident in Italy, inheritance tax is due only on assets and rights existing within the territory of the Italian State; these expressly include shares and equity interests in companies whose registered office, administrative seat, or main business activity is located in Italy.
In the present case, the shareholding in the Italian company therefore constitutes a territorially relevant taxable asset.
The Exemption for Foreign Public Entities and the Reciprocity Requirement
The core issue concerned the potential application of the exemption under Article 3(4) of the TUS, which extends the favorable regime granted to Italian public entities to those established in foreign States.
However, for entities established outside the European Union and the European Economic Area, the exemption is subject to the existence of the “condition of reciprocity.”
The applicant municipality argued that such condition was met on the basis of a substantive analysis of Swiss law, particularly the tax legislation of the Canton of Ticino, which it considered non-discriminatory toward foreign public entities. In support of this position, reference was made to prior administrative practice of the Italian Revenue Agency and to the general principle of reciprocity set out in Article 16 of the Preliminary Provisions to the Italian Civil Code.
The Revenue Agency’s Position: A Formal Agreement Is Required
The Italian Revenue Agency rejected the taxpayer’s interpretation, adopting a strict reading of the reciprocity requirement.
According to the tax authorities, for public entities established in non-EU/EEA States, the exemption may apply only if reciprocity is formally demonstrated through an appropriate bilateral instrument, such as an exchange of letters, a specific agreement, or an international convention.
With regard to relations between Italy and Switzerland, the Agency emphasized that no agreement exists expressly providing for an exemption from inheritance tax for transfers in favor of Italian public entities in Switzerland, or vice versa. The treaties cited by the applicant (concerning double taxation, cross-border workers, or exchange of information) relate to different matters and cannot establish the reciprocity required under Article 3 of the TUS.
Particularly significant is the reference to the Tax Law of the Canton of Ticino, which provides inheritance tax exemption only for the Swiss Confederation, the Canton, Ticino municipalities, and certain Swiss legal persons pursuing public purposes. Moreover, the cantonal legislation provides for reciprocity agreements exclusively with other Swiss cantons, not with foreign States.
According to the Agency, this confirms the absence of equivalent treatment for Italian public entities and, therefore, the lack of the reciprocity condition required under Italian law.
In light of these considerations, the Italian Revenue Agency concluded that the exemption under Article 3(4) of the TUS does not apply. The transfer of the shareholding in the Italian company to the Swiss municipality therefore remains subject to Italian inheritance tax under the ordinary rules.
Practical Implications
Ruling No. 16/2026 confirms a restrictive approach that strengthens the centrality of “formal” reciprocity in relations with non-EU/EEA States.
In the absence of specific bilateral agreements, even foreign public entities pursuing institutional purposes comparable to those of Italian entities cannot benefit from the exemption. This has significant implications for international estate planning and for the management of Italian corporate assets held by foreign subjects.