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Italy: Serbia’s corporate income tax exemption for qualifying investment projects constitutes privileged tax regime under participation exemption rules

Ruling No. 135/2026

August 13, 2026

The Italian tax authorities—in Ruling No. 135/2026—clarified that Serbia’s 10-year corporate income tax exemption for qualifying investment projects constitutes a privileged tax regime for purposes of Italy’s participation exemption rules.

As a result, capital gains realized on the disposal of participations in Serbian companies benefiting from the regime do not qualify for the participation exemption, and the grandfathering provisions introduced by the 2018 Budget Law do not apply to such capital gains.


For more information, contact a KPMG tax professional in Italy:

Giacomo Perrone | giacomoperrone@kpmg.it

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