Tax facts

INCOME TAX RATES

27.5% standard corporate income tax rate for resident companies. A local tax (IRAP) generally at a 3.9% rate is applicable on a tax basis approximately coinciding with added value.

No- resident companies and individuals: same income tax rates as resident ones.

VALUE ADDED TAX (VAT)

Resident: 27.5% in principle on transfer of shareholdings. In sale of participation, 95% is tax exempt, subject to certain conditions. Reduced tax rate of 1.38% may apply if certain conditions are met.
Non-resident: 14.2% effective tax rate on transfer of shareholdings.

CORPORATE TAX LOSSES

Tax losses can be carried forward for 5 years; no carry back is allowed. If incurred in the first 3 years of activity and certain conditions are met, they may be carried forward indefinitely.

TREATY NETWORK

78 countries.

WITHOLDING TAX (non-residents)

Dividends: resident and qualified EU resident: 0%; other European Economic Area resident: 1.37%; other foreign resident: 27%
Interest: resident and qualified EU resident: 0%; other non-resident: 12.5%; tax haven: 27%
Royalties: resident and qualified EU resident: 0%; other non-resident: 22.5%; tax haven: 22.5%

Above withholding tax rates can be reduced on the basis of applicable Tax Treaties (excluding tax haven)

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