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22 September, 2019

Taxation of Italian Companies.

The taxation of the income of an Italian company is based on its aggregate income earned both in Italy and abroad. This articles provides an introduction to corporate tax in Italy, outlining the types (IRES and IRAP) and rates of income tax and explaining how such tax is calculated.

Corporate Tax

The taxation of the income of an Italian company is based on its aggregate income earned both in Italy and abroad. The corporation tax to be paid by a foreign company is levied upon its income earned in the Italian territory where it has a permanent establishment.

The income of a company is subject to national corporate income tax (IRES) and regional income tax (IRAP). IRES is a proportional tax levied at the rate of 24% on the amount of the taxable income. IRAP is calculated at a rate of 3.9%.

The taxable income of a company is represented by the results shown in its profit and loss account. Losses of a company may be carried forward and deducted from the corporate income tax (IRES) taxable income of the subsequent fiscal years up to 80% of the taxable income. Losses incurred in the first three fiscal years may be carried forward and deducted from 100% of the corporate income tax (IRES) taxable income of the subsequent fiscal years.. 

Italian corporate tax law provides for two types of withholding tax: (i) final withholding tax levied at source; and (ii) withholding tax in advance payment of income tax levied upon a single item of income and which may later be added to the aggregate income. Withholding tax rates refer to dividends, interest and royalties. This document explains the types and rates of withholding tax in Italy, including double taxation relief, and a table of Italian withholding taxes applicable to European countries is provided.

Withholding Tax

Types of withholding tax

Italian tax law provides, inter alia, for two types of withholding tax:

(1)     final withholding tax levied at source; and

(2)     withholding tax in advance payment of income tax levied upon a single item of income and which may later be added to the aggregate income. The amount of withholding tax levied in advance is deducted from the tax levied on the aggregate income. The withholding tax is levied intermediaries, i.e. by those who pay the income subject to withholding tax. These are commercial organisations, business concerns, commercial agencies and entities which are not subject to IRES. The withholding tax is levied by companies in the following instances: 

(a)     on income from employment;

(b)     on fees for independent services;

(c)     on commissions to agents and brokers;

(d)     on royalties for the use of intellectual property rights, patents, trademarks and other rights on industrial property; and

(e)     on capital income (interest on loans, from bonds, bank and post office deposits and current accounts, and dividends).

Rates of withholding tax

Italian Tax Law provides for the application of the withholding tax with referenceto dividends, interest and royalties. 

Dividends distributed to entities other than individuals, which are not resident in Italy, are levied with a withholding tax rate of 26%; however if the entity is a company, which is subject to corporate income tax in a State belonging to the European Union and to the Economic European Area the applicable withholding tax rate is reduced to 1.2%. According to the parent/subsidiary Directive (90/434), if certain conditions are met, dividends distributed to the parent company by the subsidiary are exempted from any withholding tax. 

In order to avoid cases of double taxation (both legal and economic) inbound dividends received by a company (non-resident in “low tax countries”) are exempt from taxation in the amount of 95%. For the interest due, a withholding tax rate of 26% is charged; for all other interest Italian Tax Law provides for the application of general full taxation. 

Royalties paid to entities not resident in Italy are levied with a withholding tax rate of 30%; for other royalties Italian Tax Law provides for the application of general full taxation.

According to the interest/royalties Directive (2003/49), if certain conditions are met, interest and royalties paid to “group companies” (25% of participation) are exempted from any withholding tax. 

Double taxation relief

Some international Doub, entered into by Italy to mitigate double taxation, set forth particular provisions for exemption from withholding tax for certain types of income or fix reduced rates in relation thereto. A table of the withholding taxes on payments from an Italian company to a resident of various countries included in this Publication is set out at para [508].

However, as mentioned above:

  • according to the parent/subsidiary Directive (90/434), if certain conditions are met, dividends distributed to the parent company by the subsidiary are exempted from any withholding tax;
  • according to the interest/royalties Directive (2003/49), if certain conditions are met, interest and royalties paid (and received) to (from) “group companies” (25% of participation) are exempted from any withholding tax;
  • a specific Agreement provides a measure for the avoidance of double taxation on dividends, interest and royalties paid between EU and Swiss companies whose rationale strictly aligns to that of the EU Parent-Subsidiary Directive for dividend and to that of the Interest/royalties Directive for interest and royalties, payments between EU companies: it implies that, if certain conditions are met, dividend, interest and royalties paid to Swiss companies are exempted from any withholding tax.

In particular, Italy has signed 97 tax treaties to avoid double taxation. 

For information for each countries, please visit: convenzioni-e-accordi/convenzioni-per-evitare-le-doppie-imposizioni/ 

Table of Italian Withholding Taxes Applicable to European Countries

RecipientWHT (%)
Resident corporations00/26 (1)0
Resident individuals26 (2)2620 (3)
EU resident corporations0/1.2 (4, 5)0 (4)/DTT rates0 (4)/DTT rates
Swiss resident corporations0 (6)/DTT rates0 (6)/DTT rates0 (6)/DTT rates
Non-resident corporations and individuals:   
Non-treaty countries26 (7)2630 (3)
Treaty countries (8):   
Czech Republic1500/5
San Marino0/5/150/130/10
Slovak Republic1500/5
United Kingdom5/150/108


  1. The actual applicable rate depends on the nature of the recipient. Applicable rates are as follows: 0% applies on loan agreements and ordinary notes when the recipient is a corporation; 26% rate in all other cases.
  2. For resident individuals, generally a 26% WHT applies, but there is a grandfathering regime for dividends received by ‘qualified’ shareholders (i.e. holding more than 20% of voting rights or 25% of the share capital, 2% or 5% in case of listed companies). The rate applicable to ‘non-qualified shareholders’ is always 26%. Non-residents are always subject to a 26% WHT, irrespective of whether or not they are ‘qualified’.
  3. The domestic rate applies on 75% of the gross amount of the royalty paid; however, treaty ceilings apply on the gross amount of the royalty paid.
  4. Pursuant to the EU Directives and provided that the requirements set forth therein are met, payments of dividends, interest, and royalties made by an Italian company to an EU resident group company can be WHT exempt. Specifically for the dividends, the minimum shareholding requirement (to benefit from this exemption) is currently equal to 10%; for interest and royalties, it is 25% of voting rights; a one-year minimum holding period applies for both.
  5. Should the full WHT exemption not apply, 1.2% applies on dividends paid to EU and EEA tax resident corporations.
  6. Pursuant to the Swiss – EU tax agreement and provided that the requirements contained therein are met, payments of dividends, interest, and royalties made by an Italian company to a Swiss tax resident group company can be WHT exempt.
  7. Non-resident persons have the right to obtain reimbursement for up to 11/26 of the withholding effected, upon proof of the actual taxation of the dividends in the foreign country where the recipient is a resident.
  8. Provided that all conditions are met, domestic tax legislation is applicable if more favourable for the taxpayer. In a number of circumstances, tax treaties may provide for particular tax rates mainly dependent on the nature of the instruments and on the profile of the recipients/payers. In such cases, the applicable WHT rate must be verified from an analysis of the relevant tax treaty.

This document summarises the rules on the application of registration and transfer taxes in Italy, and provides the tax rates.

Registration and transfer taxes

Capital transactions resulting in an increase in capital in cash or in the transfer of movable goods, if they are subject to VAT, are subject to registration tax at a fixed amount of €200. Sales of real property are subject to a registration tax of between 1% and 15% depending on the type of property involved plus mortgage and cadastral taxes (about 3% as whole). Such tax is levied on deeds entered into within Italy and relates to the market value of such deeds, regardless of the values declared in the deeds themselves. 

Contracts for the transfer of rights are subject (depending on the type of deed) to proportional rates ranging from 0.5% to 3%. In some cases contracts of transfer are subject to VAT provided that, in accordance with the principle of alternative applicability between VAT and the registration tax, such contracts are only subject to registration tax at a fixed amount of €200. 

On the sale of property and on the performance of services by companies in Italy, VAT is applied at the rate of 21 percent on the amount of the sale or on the declared value of the services. This rate is reduced to 4 percent or 10 percent, as the case may be, if the company is involved in sales of particular categories of goods. This document explains the application of VAT on companies under Italian law. 

Value Added Tax (VAT)

On the sale of property and on the performance of services by companies in Italy, VAT is applied at the rate of 22% on the amount of the sale or on the declared value of the services. This rate is reduced to 4% or 10%, as the case may be, if the company is involved in sales of particular categories of goods (such as agricultural products, agronomic goods, fish, milk and dairy products, etc). 

VAT is also paid on imports from non EEC countries and on transactions abroad, but it is excluded, on the basis of the territorial principle, on particular export transactions (within the limits and the conditions provided by law). Transactions carried out in Italy by non-resident entities which have a permanent establishment in Italy are also subject to VAT.

EC Directive no 91/680, amending Council Directive 2006/112/EC, set forth a transitional regime for cross-border sales between business operations in the European Community. In the case of sales of goods, the VAT must be paid in the place where the goods are located. On the performance of services, there is a distinction: if the purchaser is a VAT subject, VAT must be paid in the State where the purchaser is resident or domiciled for tax purposes; if the purchaser is a consumer, VAT must be paid in the State where the performer is resident or domiciled for tax purposes. VAT is paid on the basis of the returns made either on a monthly or on a quarterly basis. 

Any sales of national or nationalised real estate or moveable property located in Italy are considered to be performed in Italy.

The act governing the application of VAT provides that certain transactions are exempt from tax (for example, credit and financing transactions; insurance transactions; foreign currency transactions; transactions concerning shares and bonds). VAT is based on the principle of ‘compulsory recourse’. Therefore, each commercial agent is bound to pay to the Italian Government, on a monthly or quarterly basis (depending upon the realised turnover) any VAT collected after deducting any VAT paid on the transactions in relation to which it was a beneficiary.

There are a series of steps involved in the application of VAT including the obligation of the performer of the service or seller of the goods to issue an invoice; the obligation to keep and maintain a book with a list of all invoices issued and purchases performed. Each year, companies must file a VAT return, at the same time as their income tax return, stating the turnover transactions performed, as well as the amount of VAT collected and the amount of VAT paid. By 16 March of each year any amount due in addition to the amount paid on a monthly or quarterly basis must be paid.

‘Capital gains’ (redditi diversi di natura finanziaria) are income deriving from the disposal of previously invested capital, including shares (or quotas in a society with restricted liability (srl)), foreign currency and bonds. As part of this commentary on company law in Italy, this document explains the tax treatment of capital gains, setting out the options as to how they may be taxed as well as the conditions for the application of the participation exemption regime. 

Capital Gains Taxes

‘Capital gains’ (`redditi diversi di natura finanziaria’) are income deriving from the disposal of previously invested capital, including shares (or quotas in an Srl), foreign currency and bonds.

Capital gains of an individual may be taxed, each having different advantages which are not dealt with in detail herefollows:

(1)     Regime della dichiarazione(‘tax return option’), which taxes the gains effectively realised at a rate of 26%, on an annual basis.

(2)     Regime Amministrato(‘Administration option’), which taxes the gains effectively made at the completion of each transaction at a rate of 26%. It is not applicable to qualified shareholdings, and allows anonymity for the taxpayer.

(3)     Regime Gestito(‘asset management option’), where the taxation is based on a ‘yearly accrual basis’ regardless of the income realised. It is not applicable to qualified shareholdings and the tax rate is 26%.

A particular regime is applied to capital gains from participations performed by companies: if certain conditions are met (see below)the capital gain is levied only on 5% of the taxable amount (the percentage of exemption is 95%). In order to enjoy this participation exemption regime four conditions must be satisfied: 

(a)     uninterrupted possession of the participation from the first day of the twelfth month preceding its sale (the `holding period’);

(b)     the participation must be classified as a financial fixed asset (`Immobilizzazioni finanziarie‘) in the first financial statement closed during the first holding period; 

(c)      the residence of the company in which the stake is held must not be in a State which is not a non-resident in “low tax countries”;; 

(d)     the subsidiary must carry on business activity.


8 April, 2021

An Introduction Brochure


12 March, 2021

The Ministerial Decree of December 28, 2020 has been published on no. 38 of February 15, 2021 of the Official Gazette. The decree adopted by the Ministry of Economic Development, which establishes the criteria and procedures for obtaining the tax benefits provided by Decree Law No. 34 of May 19, 2020 (so-called “Decreto Rilancio”) in favor of individuals who invest directly or indirectly in the share capital of innovative start-ups and SMEs registered in the special section of the Register of Companies at the time of the investment.

The tax relief applies to cash contributions recorded under share capital and under the share premium reserve of shares or quotas of innovative start-ups and innovative SMEs and to investments in units of UCITS which, at the end of the tax period in which the subsidised investment is made, hold shares or quotas of innovative start-ups or innovative SMEs for at least 70% of the value of the assets.

The benefit consists in a deduction from the gross IRPEF due by the investor, equal to 50% of the investment:

  • up to a maximum of 100,000 euros, for a deduction amount not exceeding 50,000 euros, with regard to innovative start-ups;
  • up to a maximum of 300,000 euros, for a deduction amount not exceeding 150,000 euros, with regard to innovative SMEs. In the event of an investment of more than 300,000 euros, on the part exceeding this limit the investor, in each tax period, may deduct from gross tax an amount equal to 30% of this excess.

These facilities are granted under the so-called “de minimis aid” regime; therefore, the sum of the aid received by a single party must not exceed the threshold of 200,000 euros over three years; if this threshold were reached, the benefit would not be granted. A further condition is that the investment must be maintained for at least three years under penalty of forfeiture of the benefit.

In order to benefit from the 50% deduction, it is necessary to submit the application electronically via a special digital platform of the Ministry of Economic Development. For investments made during the year 2020 and in the first months of 2021, until the platform becomes operational, the application must be submitted between March 1 and April 30, 2021. When fully operational, on the other hand, the company benefiting from the investments will have to submit the application before the investment is made by the investor.


14 December, 2020

The EORI number

On December 31, 2020, the transition period for the United Kingdom’s exit from the European Union ends. From January 1, 2020, all companies moving goods and services to and from the UK will have to comply with a series of new administrative, customs and tax processes.

The requirements that traders must follow are set out in a detailed government “Border Operating Model”, The Border with the European Union – Importing and Exporting Goods which can be found here.

In particular, it will be essential to apply for an EORI (Economic Operator Registration and Identification) number, introduced by the European Community Regulation No. 312 of 16.04.2009. From 1 January 2021 traders and hauliers exporting and importing goods between the UK and the EU will need an EORI number in order to carry out border formalities.

By 31.12.2020, every company should check if they already have an EORI number and, if not, apply for one. You will not usually need an EORI number if you only:

  • provide services
  • move goods between Northern Ireland and Ireland.

The EORI number, instead, is issued by the Customs Agency of each EU member state and in order to obtain it, it is necessary to apply to the customs authority in the EU country where the first declaration is submitted.

It is therefore necessary to prepare in time for the consequences of Brexit in order to avoid the blocking of your goods at customs and safeguard your business.

Which documents are required to apply EORI number?

If the applicant is an individual:

  • Passport or other valid ID document of the applicant, in original;
  • EORI number application.

If the applicant is a company:

  • an extract from the Companies Register no older than 6 months;
  • Passport or other valid ID document, in original, of the legal representative of the company.

If the person submitting the application is not a legal representative of the company, a power of attorney authenticated by a notary will be required.

Should you need more information, do not hesitate to contact us at [email protected].


3 December, 2020

“Resto al Sud”

“Resto al Sud” is the new measure managed by Invitalia, aimed at encouraging young people to start their business activities in the Southern regions of Italy. The program is aimed at financing new production activities, both in the form of sole proprietorships or corporations, in industry, manufacturing, processing of agricultural products, fishing and aquaculture, provision of services to businesses and individuals, tourism, freelance activities.

The measure covers 100% of the start-up costs of new business initiatives, partly in the form of bank financing assisted by the SME Guarantee Fund and partly through a non-repayable grant, which covers up to 50% of eligible expenditure. In its first year of operation, between 2018 and 2019, Resto al Sud collected 16,218 applications and financed 2,177 proposals, resulting in more than 20 thousand new jobs, investments for € 145 million euros and € 68 million of benefits granted.

In this particular period of economic difficulty, the President of the Sicily Region has recently approved a new decree that provides for additional incentives for a total of € 4.7 million additional resources over three years, accessible in the form of tax credit, thanks to an agreement between the Finance and Credit Department of the Department of Economy and the Revenue Agency.

The available funds amount to 1 million euros for the year 2020, 1.7 million euros for the year 2021 and 2 million euros for the year 2022. The tax credit is based on some fiscal amounts due to the Region – paid for each of the first three tax periods starting from the one in which the application is filed – such as:

  • the regional additional tax Irpef
  • the car tax for owned vehicles registered in Sicily and strictly necessary for the cycle or for the transport of products
  • the registration, mortgage and cadastral fee for the purchase of real estate falling within the regional territory and related to the performance of the activity.

The tax credit can be requested from 15 to 31 December 2020 for the current year and from 15 to 31 May in subsequent years and can be used as compensation with the F24 payment model to be presented exclusively through the telematic services provided by the Inland Revenue.


26 October, 2020

Last 6 October 2020, the EU Commission launched a new digital platform to support EU companies doing business with Iran.

The JCPOA (Joint Comprehensive Plan of Action) dated 14 July 2015intended to put an end to all economic and financial sanctions imposed by the European Union in connection with the Iranian nuclear program. However, some restrictions remained in place with reference to certain persons and in relation to particular categories of goods. Over the years, the scope of application of these restrictions has created significant uncertainty among EU companies that wanted to do business with Iran and the EU banking system, preventing the trade between the EU and Iran.

The new platform launched by the EU Commission include the following tools aimed at facilitating business with Iran:

  • a “Due Diligence Helpdesk”, and
  • a “Sanctions Tool”.

Both tools are aimed at helping EU companies that intend to engage in commercial relationships with Iran to  the identify their Iranian partners and permitted business.

The Due Diligence Helpdesk is an online platform that allows a free due diligence check on the compliance with European sanctions by the potential Iranian business partner. Using this tool, users can verify whether potential Iranian partners comply with European sanctions. The Due Diligence Helpdesk provides concrete and tailor-made support to European SMEs by performing due diligence and verifying whether specific business projects comply with European sanctions.

The Helpdesk will also publish guides, organize training courses, webinars and support business to business events.

The Sanctions Tool, on the other hand, is based on an interactive questionnaire, aimed in particular at small and medium-sized enterprises (SMEs) interested in engaging in activities involving Iran. This tool provides an easily accessible source of information on European restrictive measures. Its aim is to give a first general and non-binding orientation to assist SMEs in carrying out business projects, in full awareness and respect of the European restrictive measures against Iran.

EU companies that want to do business with Iran, can now visit the platform, enter a description of the type of goods they intend to export and of their Iranian counterparties, and quickly obtain a confirmation as to whether the transaction is legitimate and what measures  should be taken to carry out that specific transaction.


10 October, 2020

The real estate simple partnership (“società semplice immobiliare”) is a type of partnership that does not carry out commercial activity as its only purpose is to hold real estate assets. The shares of a real estate partnership can also be held by foreign companies.

There are many advantages for the incorporation of a real estate simple partnership: it acts as an aggregator of wealth of various subjects, overcoming some of the problems related to the co-ownership of real estate. This type of partnership does not have to keep company books or draft and file financial statements, therefore it allows to save a lot on operating costs. The great flexibility of this type of form allows the bylaws to be adapted to the needs of the shareholders. The rules regarding the company structure are also extremely simplified, with utmost freedom regarding the transfer of shares and the possibility for corporations and foreign subjects to hold shares.

The real estate simple partnership also has significant tax advantages: profits are taxed directly on the shareholders and the sale of real estate held by the partnership for more than five years does not create capital gains;  while the same property, held and sold by a s.r.l. always generates taxable income.

At the time of transfer, the real estate simple partnership pays a fixed amount of the registration tax (Euro 200).

In the case of transfer of real estate properties, instead, a taxation rate of 9% applies.

In conclusion, the simplified bureaucracy, the possibility of taking advantage of important tax benefits and the great corporate flexibility are the main features of a real estate simple partnership.


3 October, 2020

The Italian Investor Visa Program (Golden Visa), regulated by Article 26-bis of the Italian Consolidated Law on Immigration (Legislative Decree No. 286/98) has introduced a 30 days fast-track procedure to obtain an Italian residence permit for foreigners who intend to make one of the following eligible investments in Italy:

  • an investment of at least Euros 2 million in Italian Government bonds to be maintained for at least 2 years;
  • an investment of at least Euros 500,000 thousand into the share capital of an Italian company (including Italian listed companies) to be maintained for at least 2 years (the amount is reduced to at least Euros 250,000 if the investment is made into an Italian company that qualifies as “innovative start-up company”); it is worth noting that until recently these thresholds were, respectively, Euros 1 million and Euros 500,000;
  • a philanthropic donation of at least Euros one million to support a project of public interest.

It is worth noting that the purchase of real estate assets does not qualify for the Investor Visa.

Investors applying for the Golden Visa must provide evidence of available funds to make the eligible investment (e.g. a bank statement) and that they have sufficient financial resources to live in Italy.

The application can be submitted and approved before making the eligible investment, provided that the if the investment is not made within3 months from the entry in Italy, the residence permit will be revoked.

The Investor Visa is issued for a period of 2 years, renewable for further 3 years, subject to the condition that the relevant investment (or other eligible investment) is maintained,

Law No. 12 of 12 September 2020 – converting the so-called “Simplifications Decree” – has clarified that the eligible investment can be made also through corporate vehicles in which the investor is a legal representative. In case of donations, the eligible investment can be made through foundations.

Finally, the recent changes have provided that holders of an Investor Visa do not have an obligation to move their residence to Italy and are exempt from certain obligations that apply to other types of residence permit (e.g. Integration Agreement etc.).


18 April, 2020

Italy implemented a comprehensive reform of the Third Sector and other not-for-profit organizations.


Pursuant to Italian law, a Third Sector Organization or Ente del Terzo Settore (“ETS”) is a not-for-profit private organization or entity that pursues civic, solidarity and social benefits purposes carrying out, exclusively or principally, activities of general interest in an accountable and transparent way. The Code of the Third Sector (Legislative Decree No. 117 of 3 July 2017) introduced a common definition for not-for-profit organizations such as associations, foundations, social enterprises, philanthropic entities, and voluntary organisations, which are now all considered as “Entities of the Third Sector”. 

The Third Sector includes organizations and entities operating in different fields that promote Italian community solidarity and pluralism, in a context of autonomy and cooperation with governmental authorities. 

Main types of not-for-profit organizations (ETS)

Under Italian law, the main types of ETS are the following:

Volunteer Organizations (ODVs).

ODVs (in Italian) are a particular type of ETS regulated by the Code for the Third Sector. ODVs may use occasional volunteers for the furtherance of their activities, and the volunteers must register in a special registry. 

To be constituted, ODVs require a minimum of seven individuals or three other volunteering organizations. 

Volunteers may not serve simultaneously as employees of the respective ODV. Volunteers may only be reimbursed for their expenses, excluding non-refundable expenses in the case of, for example, blood and organ donors. 

Associations for Social Promotion (Aps). 

An Association for Social Promotion is a particular category of ODV that carries out activities of general interest for the benefit of its members or third parties using mainly the voluntary work of its members. 

An Association for Social Promotion must to adopt the legal form of an Association and be composed of at least seven individuals or three Associations for Social Promotion. Other third sector or not-for-profit entities may also be admitted as members, but these must not exceed 50% of the members. Exceptions are provided for sport organizations.

The number of employees cannot exceed 50% of the volunteers or 5% of the members.

Philanthropic Entities are those third sector entities whose purpose is to provide support to disadvantaged persons or to carry our “activities of general interest”.

Social Enterprises are private entities and companies that carry out mainly business activities of general interest, non-for-profit and for civic, solidarity or social utility purposes. Social Enterprises can, under certain circumstances, distribute limited profits and operating surplus. Social cooperatives and consortium of social cooperatives automatically acquire the status of Social Enterprise.

Associative Networks and Mutual Associations.

Under certain circumstances, religious entities are also subject to third sector regulations. Religious Entities recognized under civil law may adopt the status of Social Enterprise only if they carry out the activities of general interest as defined by Code for the Third Sector and identify such activities by means of a public deed or a notarized private contract.

Governmental agencies, political parties, unions, professional, entrepreneurial, commercial, or industrial associations cannot qualify as ETS.

Main features of ETS’s.

Each ETS must mention their non-profit nature in their founding documents. 

ETS may organize fundraising activities including solicitations to the public and acceptance of legacies. The distribution of funds, income or other assets to members of third sector organizations is prohibited with the exception of social enterprises. If the organization is dissolved or otherwise ceases to exist, the assets are transferred to Fondazione Italia Sociale, a private entity created by Law No. 106 of 2016 to support the activities of ETS. 

The law sets a minimum amount of initial capital for associations and foundations that intend to obtain legal personality (respectively €15,000 and €30,000). The assets of an ETS may also consist of contributions in kind, but in this case, the value of such contributions shall be audited. 

All Third Sector Entities must to register with the National Single Registry of the Third Sector (RUNT) held by the Ministry of Labour and Social Policies. The registration with the registry must be requested by the legal representative of the ETS.

The employees of a ET are entitled to the same benefits as other, equivalent private sector employees who are subject to collective bargaining agreements. 

Moreover, Government agencies at the national, regional, and provincial levels are mandated to provide ETS with access to their facilities, as feasible and appropriate.

Funding, tax Regime and exemptions.

ETS may have access to a dedicated government ETS fund. Financial institutions authorized to operate in Italy may issue “solidarity bonds” (titoli di solidarietà) to finance the activities of ETS. The issuing organization is exempted from the payment of placement fees.

General activities carried out by ETS pursuant to their mission through cooperative actions with government agencies are considered non-commercial activities. Hence, such activities are exempted from income tax liability. There is also a special tax credit equivalent to 65% of the cash donations made to ETS by individuals and 50% by legal entities. Additionally, 30% of the expenses incurred by taxpayers for in-kind contributions made to ETS for non-commercial activities are regarded as deductible for purposes of gross income tax. Managers of online portals that carry out social lending activities are subject to a different, more favourable tax regime for contributions received via their portals.

Measures to support Third Sector Entities during COVID-19 emergency.

The so-called “Decreto Cura Italia” (Decree-Law No. 18/2020) introduced a series of measures to protect workers, also applicable to the employees of Third Sector Entities.

In particular:

  1. the deadline to carry out the mandatory statutory changes required by the reform of the third sector is extended to 31 October 2020. Therefore, ODV, APS and Onlus registered in their respective registers will have until 31 October 2020 to modify their statute and update it to the Third Sector new legislation. Other associations that do not have one of the three qualifications mentioned and therefore are not registered in their respective registers have no time limit to adapt their statute to the third Sector reform and will be able to decide if and when to enter the “perimeter” of the Third Sector.
  2. The deadline for the approval of the financial statements of non-profit organizations and ETS is extended to 31 October 2020.


17 April, 2020

The Italian Liquidity Decree: Covid-16 Government measures to support Italian enterprises.

Last 8 April 2020 the Italian government implemented new important measures to support and provide liquidity to Italian enterprises. Read our comprehensive guide.


10 April, 2020

Decree Law no. 23 of 8 April 2020

On 8 April 2020, the Italian Council of Minister approved Law Decree no. 23, published in the Official Gazette (General Series no. 94, Extraordinary Edition of April 8, 2020), containing “Urgent measures related to access to credit and tax obligations for businesses, special powers in strategic industry sectors, as well as healthcare and employment interventions, prorogation of administrative and procedural deadlines”.

Law Decree no. 23/2020 (the so-called ‘Decreto Liquidità’) (Decree) includes a number of provisions that significantly affect the application of Insolvency Law, for the period of Covid-19 emergency, which are summarised below.

Measures for access to credit for Small and Medium-sized Enterprises (SMEs)

Liquidity support for companies with registered offices in Italy (guaranteed amount up to €200 billion, with €30 billion reserved for SMEs), including:

  • SACE guarantee on bank loans issued by December 31, 2020 with a maximum duration of six years in favour of enterprises based in Italy
  • The maximum guaranteed amount depends on the number of employees and the turnover of the enterprise
  • The financing shall cover personnel costs, investments, or working capital related to activities to be carried out in the Italian territory

Liquidity support for SMEs (€1.7 billion), including:

  • Prohibitions to revoke, in whole or in part, overdraft facilities and loans granted against advances on credits existing as of 29 February 2020, until 30, September 2020
  • Extension of loans to be repaid bullet before 30 September 2020 together with the relevant ancillary items, without any formalities and under the same conditions, until 30 September 2020
  • Suspension of the payment of loan instalments and rental payments on financial leases due before 30 September 2020, until 30 September 2020 and extension of the relevant amortization or rental payments plans; at the request of SMEs, the suspension could be granted on the principal portion only

Increase in the Public Guarantee Fund for SMEs (EUR 1.5 billion).

  • The fund can release:
  • 100% guarantee for loans up €25,000, without any creditworthiness valuation;
  • 100% guarantee for loans up to €800,000;
  • 90% guarantee for loans up to € 5millions.

Extension of the deadlines for the fulfilment of arrangement with creditors and debt restructuring agreements proceedings.

The deadlines for completing the arrangement with creditors procedure (concordato preventivo) and debt restructuring agreements (accordi di ristrutturazione del debito) proceedings expiring between 23 February 2020 and 31 December 2021 are extended by 6 months.

Urgent labour measures 

State Aids to Companies and Workers

New Ordinary CIG:

General Rules: Ordinary CIG (“Cassa Integrazioni Guadagni Ordinaria”) is a State economic aid for companies active in certain sectors provided by Sec. 10 of Legislative Decree 148/2015, including manufacturing, industrial, building.

Italy Care Decree Exceptions: Italy Care Decree provides that Ordinary CIG may be exceptionally obtained without previous negotiation with Trade Unions (all steps, including such negotiation, shall be taken within 3 days after the request).

Both Ordinary CIG and Ordinary Check may be requested:

  • For all employees working in the company by February 23, 2020, notwithstanding their seniority;
  • For a limited term of up to 9 weeks starting from February 23, 2020 until August 2020.

Suspension of Solidarity Check and Temporary Change to Ordinary Check:

Solidarity Checks (“Assegno di solidarietà”) are economic aids granted at certain conditions to companies which may not enjoy Ordinary or Special CIG.

Companies currently enjoying Solidarity Checks (“Assegno di solidarietà”) – economic aids granted to companies which may not enjoy Ordinary or Speciali CIG – may suspend it and request its temporarily replacement with Ordinary Check for 9 weeks’ time.

Special Contributive Advantage:

With respect to any special aid granted under Italy Care Decree, the additional contribution to be paid by the employer is not due for the time such aid is given.

No Dismissals Policy:

For the period of 60 days after March 18, 2020, collective dismissal procedures pursuant to Sections 4, 5 and 23 of Law no. 223/1991 may not be activated;

Collective dismissal procedures activated after February 23, 2020 are suspended;

Dismissals based on objective justified reason pursuant to Section 3 of Law no. 604/1966 are forbidden and ineffective.

Tax and accounting measures

  • Suspension of tax contributions for taxpayers with tax domicile, operating, and/or registered office in Italy, until May 31, 2020
  • Suspension of tax contributions for companies with a turnover of less than €2 million with tax domicile, operating, and/or registered office in Italy, until 31 May 2020;
  • Suspension of tax contributions for individuals carrying on business activities with tax domicile, operating, and/or registered office in Italy, with turnover r earnings that o not exceed €50 million who recorded a decrease of more than 33% in their turnover, until 31 May 2020
  • Suspension of tax collection files and tax controls until 31 May 2020
  • Encourage the sale of impaired loans with the aim of supporting companies in terms of liquidity through the possibility of transforming into a tax credit a portion of deferred tax assets (DTA) relating to certain components, for an amount proportional to the value of the impaired receivables that are transferred to third parties.

We are at your disposal if you want to contact us for further information.


18 March, 2020

Covid-19 emergency measures: New rules for remote shareholders’ meetings and extension of the term to approve the yearly financial statements

The emergency measures against COVID-19 also apply to the corporate framework.

First, under the Italian law the shareholders’ meeting for the approval of annual financial statements must be convened within 120 days from the last day of the year to which the statements refer (which, for most companies, is December 31). For Italian companies with listed shares the shareholders’ meeting is also subject to a 30 day prior notice requirement (which is extended to 40 days if the appointment of a new board of directors or statutory auditors is in the agenda for the meeting).

Prior to the recent measures, the 120 day period could be extended to 180 days subject to the occurrence of at least one of the following circumstances: (i) the company is required to prepare consolidated financial statements or (ii) particular situations relating to the structure or purpose of the company occur. 

However, the Italian Government considers that the current Covid-19 could be treated as “force majeure” and therefore justifies an extension for all companies to approve their Financial Statement within 180 days.

Second, the Maxima No. 187, of March 11, 2020, of the Milan Notary’s Council allows that the shareholders’ meetings (and the boards of directors) of the companies take place even if all the attendees are connected by audio or video conference and, therefore, even if the chairman and the secretary of the meeting are not in the same place. The Maxima has been confirmed by Legislative Decree of March, 11, 2020, n. 18 (“Decreto Cura Italia”), where is specified that the shareholders’ meetings of the companies (as well as the boards of directors) may also be regularly held if the chairman, the secretary and, if required, the notary public, as well as all the attendees at the meeting, are connected by means of telecommunications that can guarantee their identification and participation (right to participate, expression of voting rights, etc.). The provision also applies where the company’s by-laws (i) do not regulate the conduct of the meeting by means of telecommunications, or (ii) condition the validity of meetings by audio or videoconference to the fact that the chairman and the secretary of the meeting are in the same place. The rule applies to shareholders’ meetings (or boards of directors) convened by July 31, 2020, or by the date, if later, until the state of emergency on the national territory related to the COVID-19 epidemic. The measures, while on the one hand promote and encourage participation in meetings at a distance and discourage travel that is not justified by necessity, on the other hand allow an easier management of meetings, which translates into a significant advantage for both resident and foreign shareholders and directors, who will under no circumstances be obliged to expose themselves to any risk at this particularly critical time.


18 March, 2020

Read our guide on the COVID-19 Emergency Italian labour law framework.


28 February, 2020

Which investments qualify as investments into a “company incorporated and operating in Italy” under the Golden VISA legislation?

Under Italian immigration law, one of the options to qualify for Golden VISA is to “invest at least € 1 million in equity instruments of a company incorporated and operating in Italy, to be held for at least 2 years“;

Pursuant to Interministerial Decree of 21 July 2017, investments qualifying for Golden VISA are equity investments into:

  • companies incorporated and operating in Italy” as “corporations, incorporated and resident in Italy pursuant to Article 73 of the Income Tax Code ” including both listed and non listed companies;
  • asset management companies including, SICAV, SICAF, SGR and SIM;
  • investment funds.


12 September, 2019

Come and work in Italy and have up to 90% of your employment income tax free

The preferential tax regime for “inbound workers”(a tax regime aimed at attracting to Italy non-resident employees / self-employed workers), provides for a 50% exemption of Italian-sourced employment (and assimilated) and self-employment income.

The preferential tax regime applies for the tax year when the transfer of tax residence takes place and the following 4 tax years (i.e. 5 years).

Requirements for eligibility:

  1. to have been tax resident outside of Italy for at least five years prior to the transfer to Italy;
  2. to remain tax resident in Italy for at least two tax years;
  3. to be hired by an Italian tax resident employer, or by a branch in Italy of a foreign company, or by a company of the same multinational group;
  4. to work in the Italian territory for at least 183 days in each year;
  5. to cover an executive role and/or be regarded as highly specialized employee (under the conditions provided by the Decree).

The preferential tax regime applies also to the “inbound workers” (EU Citizens or citizens of a Country with whom Italy has a Double Tax Treaty or alternatively, a Tax Exchange of Information Agreement), who meet all the following requirements:

  1. hold a university degree of at least three years duration and perform an employment or self-employment activity in Italy;
  2. have performed a work activity, or alternatively must have spent a study period outside Italy for at least 24 months before the transfer to Italy.

The Decree extends the scope of application the preferential tax regime:

  1. increases the tax exemption from 50% to 70%;
  2. increases the tax exemption from 50% to 90% in case of transfer of tax residence in one of the following regions: Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria Sardinia and Sicily;
  3. extends the tax exemption to (individual) business income;
  4. reduces from 5 to 2 years the period for which the individual must not have been a tax resident in Italy prior to the transfer;
  5. eliminates the condition that the individual must cover a managerial role or be highly specialized;
  6. includes the possibility, in some cases, to extend the duration of the regime by 5 additional years under specific requirements (e.g. dependent children or a home property investment in Italy. The exemption for the additional five years period is limited to 50% of the employment income.


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