9.1 Corporate Taxation
Italian companies are subject to two main taxes:
- IRES (Corporate Income Tax) – 24% flat rate on net income
- IRAP (Regional Production Tax) – Typically 3.9%, based on adjusted gross margin rather than net book profit
Taxable income is calculated according to Italian GAAP, with adjustments for non-deductible expenses and exemptions. Losses may be carried forward indefinitely, subject to limits.
9.2 VAT and Indirect Taxes
Italy applies a standard VAT rate of 22%, with reduced rates (10%, 5%, 4%) for specific goods and services. Businesses must:
- Register for VAT (Partita IVA)
- File monthly or quarterly returns
- Issue electronic invoices (Fattura Elettronica)
Other indirect taxes include stamp duty, registration tax, and excise duties depending on the sector.
9.3 Withholding Taxes
Italy imposes withholding taxes on payments to non-residents:
- Dividends – 26% (reduced under treaties)
- Interest – 26% (or lower for EU residents)
- Royalties – 30% (subject to treaty relief)
Double taxation treaties may reduce or eliminate withholding obligations. Proper documentation is required to claim treaty benefits.
9.4 Tax Compliance and Reporting
Companies must file annual tax returns (Modello Redditi SC) and pay taxes via F24 forms. Deadlines for calendar year end businesses) include:
- June 30 – Annual return filing
- June and November – Advance payments
- Monthly/quarterly – VAT and payroll filings
Non-compliance may result in penalties, interest, and audits. Many companies engage a commercialista (accountant) to manage filings, payments and compliance generally.