Withholding tax

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Accountant Filippo as English speaking Italian Chartered Accountant, Commercialista Italiano che parla Inglese, will help you with the Italian Tax system, helping you with saving tax and ensuring you are operating complying with Italian Tax law.

Wage tax – Social Security Contributions

Employment income is subject to withholding tax, with the amount determined in accordance with the Italian
progressive tax rates on personal income.
The withholding agent must provide the employee with an annual salary statement by 28 February, following
the year to which the income relates, which certifies the amount of income tax withheld during the relevant
fiscal year. The withholding agent is also required to submit an annual withholding agent tax return reporting
the total amount of tax withheld in respect of all employees, as well as the income certified in the annual
salary statement.
Employment income is also subject to social security contributions. Social security must be paid by both the
employer and the employee (28% to 30% for the employer and about 9% for the employee). The amount due
by the employee is withheld by the employer and paid on his/her behalf.


Dividends paid to a nonresident corporation are generally subject to a 20% withholding tax unless the rate is
reduced under a tax treaty or the dividends qualify for exemption under the EU parent- subsidiary directive.
Under the directive, the domestic withholding tax will be reduced to zero if dividends are distributed to a
qualifying EU shareholder that has held at least 10% of the subsidiary for at least 12 months.
A domestic withholding tax of 1.375% applies to dividends distributed to qualified shareholders resident in
the EU/EEA that allows an exchange of information. This regime effectively applies (in an EU/EEA context)
to shareholders that do not meet the minimum participation requirement or holding period for the parentsubsidiary
directive to apply.


Italian-source interest paid to a nonresident is generally subject to a 26% withholding tax.
Under the EU savings directive, paying agents must provide the Italian tax authorities with information about
the payment made to residents in a EU member state. The information received is forwarded to the tax
authorities of the EU member state.


A 30% withholding tax, which is generally applied to 75% of the gross amount of the payment, applies to
royalties paid to a nonresident company.
Licensing fees and some service fees are taxed as royalties, but management fees are exempt from
withholding tax.
A 30% withholding tax is applicable on compensation paid to a nonresident for the use of industrial,
commercial and scientific equipment located in Italy.

Accountant Filippo as English speaking Italian Chartered Accountant, Commercialista Italiano che parla Inglese, will help you,

feel free to contact us for more information.