If a person resident in Italy (a legal entity, partnership, individual) holds, directly or indirectly, also through trust companies, the control of an enterprise, company or other entity, resident or located in States or Territories permitting privileged tax regimes, the income earned by the controlled foreign entity is imputed to the resident entity or person, as of the end of the fiscal year of the controlled foreign entity. The relevant control is based on the civil law, which is described in article 2359 Civil Code. Subsidiaries enterprises are:    1) companies in which another company has the majority of the votes that can be exercised in the general shareholders' meeting;    2) companies in which another company has sufficient votes to exercise a significant influence in the general shareholders' meeting;    3) companies that are under the significant influence of another company by virtue of particular contractual obligations with it .   4). A tax regime is "privileged" where the effective level of taxation is less than 15%. The effective level of taxation is computed based on total taxes and profit(loss) before taxes as from financial accounts. Financial accounts must be subject to accounting revision.  If either the financial accounts are not revised or the effective taxation is below 15%, the controlling entity must verify that the controlled company is not subject to an effective taxation less than 50 percent of that applicable in Italy. A  subsidiary is deemed CFC if more than 1/3 of its proceeds consists of passive income (interests, royalties, dividends and other types of financial income). The relevant legislation is avaialble in art.167 of the Direct Taxes Code (Law n. 917 of 22/12/1996) as modified by the legislative decree n. 209 of 27/12/2023.