Italian business taxes

Learn which apply to you and how to file them

Italian business taxes

Find out what taxes apply to your business and the accounting principles you must follow.

The following information will help you to understand and organise your business's taxes and accounts, keeping you in line with the Italian legal requirements. Find out which of these requirements apply to your company below.

Financial statements

SPA (Joint Stock Company) and SRL (Limited Liability Company) are required to hold an annual general meeting within 120 days of each business year’s end to approve financial statements. Occasionally companies are allowed to extend that time to 180 days. Within one month of approval, the financial statements must be registered with the Registro Impreso. 

It is clearly stated that a financial year cannot last more than 12 months, however, under certain circumstances a company may be entitled to apply for a shorter financial years. It is common to close the financial year either on December 31 or June 30.

Accounting principles

According to the EU’s fourth directive, all public companies, insurance companies and banks must comply with the International and Financial Statements Principles .

Auditing

Companies are not generally required to be audited, except:

  • Companies with a share capital of more than 120.000 EUR
  • Companies which are exceeding certain balance sheet limits
  • Companies what are listed on the Stock Exchange (also various companies in the financial services sector)

Taxes

Before starting a business in Italy, it is recommended to turn to an experienced tax advisor and/or research the internet to attain information about the taxation system. The topic of tax needs careful consideration as you will have to pay taxes from the moment you become a tax resident.

Taxes applicable to businesses in Italy:

VAT

In Italy the standard VAT rate is 21% (In relation to certain products, reduced rates are 10% and 4%, and exports are zero-rated).

Refunds?

In Italy there is a possibility to recover some company expenses by receiving a VAT refund. To apply for a VAT refund, usually the owner of the company or a legal representative has the right to submit a claim to local tax authorities, either at an office or electronically. You must attach and send all the invoices with the application. Also, you should prepare documents such as identification documents and certificates issued by the tax authorities as they might be necessary during submission process.

Receiving the refund must happen in less than 6 months after applying. To make the online application process more clear, you can download the free eLearning course on the VAT refund electronic procedure here .

How to register for VAT?

Registration for VAT in Italy should be performed within 30 days of establishing the company. You can register your company in a tax office in the district where your company is performing.

Steps of registration:

  • Complete a declaration form of business commencement.
  • Provide the tax office with documents such as the deed of corporation, the registration certificate of the company, an estimated annual turnover and information on the company’s activity.
  • Receipt of VAT registration number.

The meaning of intra-community VAT?

Intra-community acquisition is known as a trade relationship between Italy and another EU member state. This corresponds only to member states of the European Union. One of the benefits of intra-community acquisitions is that they are zero-rated in terms of VAT, including export outside the EU.

Corporate tax

Currently, corporate tax in Italy stands at 31.4%. You can keep yourself informed about the potential fluctuations of the corporate tax here .

Dividend tax

Set at 20% for foreign countries with the possibility of tax reduction if any taxation treaties are enforced.

For more information on paying business taxes in Italy click here .

Further reading

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