{"id":1207,"date":"2024-01-16T11:43:52","date_gmt":"2024-01-16T10:43:52","guid":{"rendered":"http:\/\/159.65.127.138\/?p=1207"},"modified":"2026-04-15T12:05:14","modified_gmt":"2026-04-15T10:05:14","slug":"living-in-italy-working-through-a-foreign-company","status":"publish","type":"post","link":"https:\/\/taxing.it\/it\/living-in-italy-working-through-a-foreign-company\/","title":{"rendered":"Living in Italy – Working Through a Foreign Company"},"content":{"rendered":"
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Tax Resident in Italy Doing Business Through a Non Italian Company<\/h2>

Modn information technology permits people to work from a laptop or computer wherever they find themselves. In the circumstances, you might think that using a foreign company can help reduce your tax burden.\u00a0 For the self-employed – freelances\/contractors –\u00a0 it is tempting to bill clients through a foreign company,\u00a0 possibly in a low-tax jurisdiction, especially if the clients themselves are outside Italy. Many self employed people around the world work quite legitimately through a corporate vehicle, but the ramifications in terms of tax and social security in a specific cross border<\/b> context can be complex.\u00a0<\/p>

If you are tax resident<\/a> in Italy, for any applicable Italian tax (calendar) year, you are in general liable to tax on your world-wide income unless you are protected (usually partially) by an applicable double tax treaty.\u00a0\u00a0<\/p>

As a tax resident of Italy you are also subject to a series of rules designed to prevent avoidance of Italian tax and possibly payment of obligatory social security contributions, through the use of non Italian companies. Whilst the guidance and jurisprudence might be limited in an international context, the Tax Agency can challenge the issues of invoices to the company by its owner\/manager who has registered as self employed in Italy. The penalties in the event of a successful challenge will be steep and can involve criminal aspects for fraudulent invoicing.<\/p>

So careful planning and set-up are required to see if this of structure is going to be cost effective in terms of tax, social security and compliance obligations.\u00a0 While working through an owner\/managed limited liability company may be appropriate in other jurisdictions around the world,\u00a0 in an Italian context that may not be so. As a general rule it might be much simpler\u00a0 (and hence less expensive in terms of professional fees for support navigating through the rules in the presence of a corporate structure) to set up as self employed in Italy taking advantage of one of the special regimes for the self employed (see below) if available.\u00a0<\/span><\/p>

This note applies to the self employed <\/b>even if they are used to work through a corporate vehicle which they own and manage.\u00a0<\/b>. If you are interested in the specific issues around working as an employee of a non Italian company, see this article<\/a>.\u00a0 \u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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Anti Tax Avoidance Rules to Stop Use of Foreign Companies to Shift Profits Abroad<\/h2>

Italian Taxable Presence<\/h3>

If you are working from a fixed base in Italy (including your home), the Italian authorities have power, under “taxable presence” or \u201cpermanent establishment”<\/a> (PE – (\u201cstabile organizzazione<\/em>\u201d) rules to apply Italian income tax to the profits, and Italian VAT to billings, of the foreign company, to the extent that<\/p>