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Italy
Companies Taxation

Overview

Italy offers a mature and robust corporate tax system aligned with EU and OECD standards. With a standard corporate tax rate (IRES) of 24% and a regional tax (IRAP) of approximately 3.9%, Italy is a key jurisdiction for businesses operating in Europe.

Various incentives, including tax credits, patent box, and participation exemption, make it attractive for both local and multinational companies.

Italian Tax System for Companies

Standard corporate income tax (IRES) rate: 24%.

Regional production tax (IRAP): approx. 3.9%, may vary by region.

Participation exemption: 95% exemption on capital gains from qualifying shareholdings.

No withholding tax on outbound dividends to EU/EEA entities under certain conditions.

Tax credits for R&D, innovation, and digitalization expenditures.

Patent Box regime provides partial exemption for income from qualifying IP.

Thin capitalization and interest deductibility rules in place.

Losses carried forward indefinitely (limited to 80% of taxable income).

Transfer pricing rules aligned with OECD Guidelines.

Extensive tax treaty network with 100+ countries.

Requirements and Procedures

Register company with the Italian Business Register and obtain VAT & Tax ID.
Maintain proper accounting records in Italian GAAP or IFRS.
File annual IRES and IRAP returns (Form Redditi SC) by November 30 of the following year.
Advance tax payments in June and November based on prior year’s liability.
Quarterly VAT returns and annual VAT return (by April 30).
Withholding tax returns (Form 770) due by October 31.
File annual financial statements with the Companies Register.
Compliance with e-invoicing and digital tax reporting (SDI system).
Country-by-Country Reporting for large multinationals.
Cooperate with tax audits and provide transfer pricing documentation upon request.

How Charfort can help you?

Incorporation and full tax registration in Italy.

Strategic structuring to optimize IRES, IRAP, and cross-border taxation.

Tax compliance: preparation and filing of IRES, IRAP, VAT, and Form 770.

Advisory on R&D tax credits and IP tax benefits.

Setup and documentation of transfer pricing policies.

Managing statutory audit coordination and financial reporting.

VAT and SDI e-invoicing system compliance.

Representation before Italian tax authorities.

Assistance with tax ruling requests and treaty application.

End-to-end corporate governance and fiscal compliance support.

Frequently asked questions

Everything you need to know about the process.

What is the corporate tax rate in Italy?

The standard IRES rate is 24%, plus a regional IRAP of approximately 3.9%.

Are capital gains on shareholdings exempt?

Yes, 95% of gains on qualifying participations are exempt under the participation exemption.

What tax incentives exist for innovation?

Italy offers R&D tax credits, innovation incentives, and a favorable Patent Box regime.

When are corporate tax returns due?

By November 30 following the fiscal year-end, for both IRES and IRAP.

Are transfer pricing rules enforced?

Yes, in line with OECD standards. Documentation must be maintained and shown on request.

How are VAT obligations handled?

VAT returns are filed quarterly, with an annual return due by April 30. E-invoicing is mandatory.

Can I benefit from Italy’s tax treaties?

Absolutely. Italy has signed over 100 treaties to prevent double taxation.

Can Charfort assist with all tax filings in Italy?

Yes, we handle end-to-end compliance including tax filings, structuring, and audit support.

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