Want to setup a company? This will tell you what you have to know about taxation in Italy for a LLC, which is the most common company structure in Italy.
Italy taxes income earned outside the borders in the same way that it was derived locally. The prevailing tax rate for offshore income, from our research, and these things do change, is 27.9%. Italy may have certain exemptions to bring in profits made internationally. Corporate Income Tax standard rate is 24%, plus a regional production tax, which usually is 3.9%. Therefore, the effective rate of taxation on a LLC entity usually is 27.9%. This ranks Italy as 129th when compared to corp. taxation rate internationally.
The valued added tax rate in IT is 22.00%, which ranks Italy as 162nd when compared to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 30.00% to the equivalent of a social security fund and an employee will contribute 10.19%. The overall complexity of the tax system is high. This is measured by average time to comply with a country's labor tax requirements is as it is 198 hours. Contributing to this is the number of yearly labor tax payments, which is 1 in IT.
Thin capitalization restrictions aren't in effect. This refers to any sort of restrictions on a business and the debt-to-asset ratios. Domestic and foreign dividends paid by subsidiaries to Italian Resident entities are usually 95% exempted from corporate income tax. Dividends are payments of company profits, decided by the board, to shareholders. Dividends can be either shares of stock, cash payments, or other property. Capital Gains are treated as ordinary income and therefore subject to CIT. However, a 95% exemption may apply on the sale of participations provided that certain requirements are met. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.
Interests paid by resident entities to non-resident are usually subject to a 26% withholding tax, being 12.5% if interests are derived from government bonds or similar securities. Dividends paid to non-residents are usually subject to a withholding tax of 26%. The royalties witholding effective tax rate is 22.5%. An exemption of withholding taxes may apply if payments are under EU's directive and withholding tax rates may be reduced under a tax treaty.
A capital duty may apply on contributions of cash in exchange of shares. There is a tax on individual net wealth in Italy. There are inheritance, transfer and property taxes in Italy. There are frequently implemented research and development breaks on taxation in Italy.
The above is not tax or legal advice for your individual situation. We are able to refer you to a tax advisor in Italy who can properly advise you. Want to work together? Click the free consultation button above.
It takes approximately 39 hours to file and prepare documents for a Italy Civil Law (French).
The corporate tax is approximately 27.9% which is 129 in the world.
Owners of a company in Italy are not allowed to carry back a loss and may be allowed to carry forward a loss for 100 years.
The vat rate in Italy is 22% which ranks 162 in the world.
When incorporating, you must look at the law in the country, in Italy is civil law (french) law. You will want to get some local advice as to how to best structure a company in Italy. Electronic signatures are permitted.
The abbreviation IT is for Italy and the most common legal entity type in Italy is a LLC.
It typically takes about 7 Days to incorporate a LLC in IT. The types of currencies you can use to fund your company is frequently USD and EUR legal tender.
Yes, one is allowed to re-domicile a LLC from IT. You are usually allowed to change the jurisdiction of the company, pending certain procedures.
There must be at least 1 shareholder. This makes it possible for you to own a LLC in IT by yourself. Corporate Shareholders are allowed, meaning you could have a company as a shareholder. Foreign ownership is permitted, up to 100% of the ownership of the LLC.
A company is only required to have one director. Additionally, corporate directors are permitted. Directors should not have an expectation of privacy, as they are not kept private in Italy. There is a body of law which requires companies to hold an annual meetings of shareholders.
A registered office is a requirement, whom the company will pay yearly, for an address which can receive litigation or other legal process on behalf of the registered legal entity. A related requirement, a company secretary is not always necessary, at least not by law.
There is an obligation to file yearly tax returns. However, there is oftentimes a requirement to have these accounts audited.
Thin capitalization rules are in effect. A company is thinly capitalised when there is a greater proportion of debt than equity. The minimum capitalization for a Italy Civil Law (French) is 1.
A corporate director is permitted, meaning this country is a good option if you are setting up a structure where you want to protect director liability.
The directors are disclosed in the public registry of Italy, Registro Imprese. Shareholders are disclosed in the Registro Imprese.
Typically companies take 7 days to setup and there are 1 director(s) required and 1 shareholder(s) required at the time of incorporation.
Overall we think Italy is a ok option and have given it a score of 63 as an IO score, using the Incorporations.IO proprietary formula.
We can help you form a company in Italy. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Italy, which is required by law.
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