Executive summary

On 7 November 2025, the Italian Minister of Economy and Finance issued a Ministerial Decree (the Decree) clarifying the local requirements for the annual return for top-up tax (TuT) within the Italian Global Minimum Tax (GMT) framework.

The Decree clarifies the scope and details of the filing obligations. Entities liable for TuT under the Income Inclusion Rule (IIR), Undertaxed Payments Rule (UTPR) or Qualified Domestic Minimum Top-up Tax (QDMTT) must file the annual GMT return.

This Tax Alert provides an overview of the Italian GMT compliance framework as enacted in the Decree. The Decree specifically addresses the following areas of GMT compliance:

• Filing obligations for entities required to submit the annual Italian GMT
• Payment rules for the TuT due in Italy

Enacted pursuant to Article 53(3) of Legislative Decree No. 209/2023 (the Legislative Decree), the Decree sets out comprehensive rules governing the annual reporting and payment of the TuT by multinational and domestic groups with Italian constituent entities. Within 90 days, the Italian Revenue Agency is expected to release the official return template and filing instructions.

Background

The Decree complements previous measures concerning the reporting obligations set forth in Article 51 of the Legislative Decree, which introduced obligations for the Globe Information Return (GIR) and GMT notification applicable to Italian constituent entities and stateless entities incorporated under Italian law.

Entities required to file

Article 2(2) of the Decree provides that entities required to file the annual GMT return coincide with those liable for TuT payment. Specifically, the Decree addresses tax liability under the:

• IIR — applies to the Ultimate Parent Entity (UPE) or other entities identified under the Legislative Decree
• UTPR — applies to entities identified under Article 19(2) and 20(3) of the Legislative Decree
• QDMTT — applies to local designated entities nominated by the multinational enterprise(MNE)/National Group, as defined by Legislative Decree and Ministerial Decree of 1 July 2024 (QDMTT Decree), responsible for paying the TuT owed by the Italian entities of the MNE/National group falling within GMT rules; additionally, Article 10(2) of the QDMTT Decree, clarifies that joint ventures may also be required to file the annual GMT return

Entities required to file may differ for each form of top-up taxation and, in certain cases, multiple filing entities may coexist for the same MNE Group.

The Decree imposes a specific compliance obligation on constituent entities within the scope of the GMT. These entities are required to provide the designated filing entity with all information and data necessary to ensure the accurate preparation and timely submission of the GMT return, as well as the correct determination and payment of the TuT.

This requirement operates in a manner analogous to the obligations under the Italian tax consolidation regime, which requires participating entities to actively cooperate with the consolidating entity to enable full compliance with statutory declarative and payment duties. Failure to comply with this obligation may expose the group to administrative penalties and joint and several liability, as outlined in the relevant provisions of both the Legislative Decree and the Decree.

Structure of the annual return

The annual GMT return includes:

• A general section — requiring identification details for the filing entity, group information consistent with that required for the GIR, and disclosure of any exclusion regimes or safe harbor provisions
• Specific schedules — providing detailed data and computations for IIR, UTPR and QDMTT, including TuT determination

Filing the annual return is mandatory even where no TuT liability arises (i.e., a "nil return"), which may result from offsetting mechanisms, the application of safe harbor provisions or de minimis thresholds.

The Decree also requires disclosure of the allocation method adopted for TuT liability among Italian constituent entities.

All calculations must comply with the Italian GMT rules; if performed in a currency other than euro, conversion must use the official exchange rate applicable on the last day of the relevant fiscal year.

Filing and payment deadlines

The filing due date for the transitional year is within 18 months after the end of the relevant year, whereas the ordinary filing due date is within 15 months after the end of the relevant year.

For fiscal years ending before the first year of GMT application (e.g., 31 December 2024), the filing deadline is not earlier than 30 June 2026.

The Payment Terms provided by the Decree are:

• First installment (90%) — due by the end of the 11th month after fiscal year-end
• Balance (10%) — due by the end of the month following the filing deadline.

The TuT due cannot be offset against other tax liabilities. Any excess TuT may be carried forward or refunded, except as restricted by Article 32 of Legislative Decree (i.e., subsequent amendments following the submission of the relevant GMT returns).

Excess tax reclaims must be filed within 48 months from the payment date.

Penalties for noncompliance

Noncompliance triggers the ordinary income tax administrative penalties set forth in Legislative Decrees 471/1997 and 472/1997, insofar as compatible.

No penalties apply during the first three fiscal years, except for willful misconduct or gross negligence.

The constituent entities within the group, on whose behalf the designated entity subject to filing and payment obligations acts, are jointly and severally liable with that entity for any amounts due in respect of taxes, interest and penalties resulting from assessment and audit activities.

Implications

The Decree provides clarity on compliance obligations and finalizes Italy's implementation of the Organisation for Economic Co-operation and Development (OECD) Pillar Two compliance framework, requiring immediate attention from in-scope MNE groups to ensure timely preparation for filing and payment.