Corporate tax
Tax rate for resident companies |
The rate of the corporate tax (IRES - Imposta sul Reddito delle Societa) was set at 33% on January, 1st of 2004. Companies are also imposed on the IRAP (regional tax on productive activities), at the rate of 4.25%. Dual Income Tax (DIT) is not collected any more.
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Taxe rate on long-term capital gains |
Capital gains realised by the company are generally taxable as normal business income subject to IRES, and capital losses are generally deductible.
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Dividends paid to non-residents companies:
Payment at source (PAYE) of 27% in full discharge, back to 15% if the nonresident proves that these dividends are taxed in the country of place of residence or 0%. (Infringement by international agreements).
Dividends paid to residents companies:
Payment at source (PAYE) of 12,5% in full discharge or in integration option in the taxable income with imputation of the deduction and tax credit of 58,73%.
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Tax rate on branches |
Branches are taxable as all the companies registered in Italy.
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Income tax
Fiscal year |
The fiscal year begins on January 1st and ends on December 31st of the same year.
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Income tax rate |
2005 Tax Schedule (IRPEF) for 2004 incomes for a single person:
| In euros | Rate | | < 3.000 (or 7.500) | no tax | | 3.000 (ou 7.500) - 15.000 | 23% | | 15.000 - 29.000 | 29% | | 29.000 - 36.200 | 31% | | 36.200 - 70.000 | 39% | | > 70.000 | 45% |
Wealth tax does not exist and inheritance taxes have been abolished in 2001.
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VAT rates
Standard rates |
In Italy, the common law rate for the VAT is 20%.
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Reduced rates |
Reduced rates of 10% on certain foods; public transport; pharmaceuticals. Reduced rate of 4% on basic foodstuffs; books; newspapers, certain social housing & airline tickets.
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Accounting
Introduction
Italian accounting rules are essentially based on the civil code and strongly influenced by the tax system.
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Obligations and publications
The annual report, the audit report, the financial statements and a copy of the report of the general assembly must be deposited in the trade register 30 days after the general assembly. The deposit must be also indicated in the official bulletin of the companies of capital ( BURSAL); the associations must also publish their accounts.
Certification and auditing
The Civil code obliges the companies of capital, with a capital superior to 200 million liras, to appoint a committee of audit from three to five members which publishes its audit through an annual report included in the financial statements.
The law does not impose a particular model of presentation concerning the annual report.
Professionals and representative organizations
The Law recognizes the existence of two professional bodies: the Dottori Commercialisti and the Ragioneri.
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Last modified in
January 2003
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