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Editor in chief: Angelo Scorza
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01/04/19 14:38

Ecofin approved the new tax havens list

Studio TCL also analyses Mini Bond as an alternative to bank credit

The Economic and Financial Affairs Council has brought to 15 the number of non-cooperative jurisdictions for tax purposes

The tax havens list recognized by the EU expands, now including the following states: Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, Marshall Islands, Oman, United Arab Emirates and Vanuatu.

The aforementioned states have been added to the “Tax Havens List” since they did not respect the deadline set by the EU to meet tax compliance standards.

During the ECOFIN, The Economic and Financial Affairs Council, responsible for EU economic policy, the Italian Minister of Economy and Finance, Giovanni Tria, proposed an amendment, accepted with unanimous consent for the exclusion from the list of the United Arab Emirates, as soon as they adopt a new legislation to abolish offshore structures and arrangements aimed at attracting profits without real economic substance.

 

Mini Bond: an alternative to bank credit

During the annual conference AIFI (Italian Association of Private Equity, Venture Capital and Private Debt), of which PKF Studio TCL is member of the "Tax & Legal Commission", numerous topics were discussed relating to Investment Funds and Private Debt. We focus our analysis on the financing instruments to support SMEs, in particular we examine "Mini Bonds".

After the financial crisis, banks redefined the parameters for granting credit to companies, making the access to traditional financing channels particularly expensive.

In order to face this problem the government granted the possibility for unlisted SMEs, other than banks or micro-enterprises, to issue medium/long-term debt securities (also knowns as Mini Bond), to finance their operations.

Borsa Italiana established a market segment, named Extra Mot Pro, entirely dedicated to the listing and exchange of these securities.

Another relevant aspect, introduced by the aforesaid decree, concerns the disapplication of Article 2412 of the Italian civil code, which imposes an issuance limit to bonds of no more than twice the aggregate of a company's share capital, legal reserves and distributable reserves. This limit no longer applies to Mini Bond traded on regulated market or multilateral trading facility.

The legislator, in order to encourage the purchase, abolished the 26% withholding tax on interest if the securities are held by professional investors or traded on financial markets.

The introduction of Mini bonds has guaranteed liquidity and credit to performing companies, becoming a valid alternative to traditional financing instruments.

The AIFI in collaboration with Deloitte, conducted a study, related to 2018 issuances, showing that more than 140 Mini Bonds have been issued, with a total fundraising greater than 1 billion Euro.

Despite the uncertainty over the Italian growth, international investors bought 63% of the aforementioned fundraising, in stark contrast to forecasts.

The 97% of the total issuances came from SMEs located in the center-north, confirming the south SMEs lack of interest for this financing tool.

Although the positive trend of the last years, the raising of capital started to slow down compared to before. Most of entrepreneurs are still not aware about the alternative financing instruments available on the market, considering exclusively the bank credit.Regardless the unfavorable economic situation, it has been possible to finance SMEs in the 2018, but a government intervention is needed in order to guarantee liquidity and credit to worthy companies. 

 

Stefano Quaglia

PKF Studio TCL - Tax Consulting Legal

Genova  –  Milano

 

TAG : Tax corner
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