Italy

Corporate - Withholding taxes

Last reviewed - 02 July 2020

A 26% base standard WHT rate applies on the yields on loans and securities (bonds, shares, etc.) paid by Italian resident entities to both Italian and non-Italian resident investors.

The standard WHT rate, however, may be reduced under the applicable DTTs, EU Directives, or other special domestic tax regimes (such WHT exemptions and reductions are only granted to the beneficial owner of the income).

Interest on government bonds is subject to a 12.5% domestic WHT.

WHT chart

Domestic corporations paying certain types of income are required to withhold as shown on the following chart. The numbers in parentheses refer to the notes below.

Recipient WHT (%)
Dividends Interest Royalties
Resident corporations 0 0/26 (1) 0
Resident individuals 26 (2) 26 20 (3)
EU resident corporations 0/1.2 (4, 5) 0 (4)/DTT rates 0 (4)/DTT rates
Swiss resident corporations 0 (6)/DTT rates 0 (6)/DTT rates 0 (6)/DTT rates
       
Non-resident corporations and individuals:      
Non-treaty countries 26 (7) 26 30 (3)
Treaty countries (8):      
Albania 10 0/5 5
Algeria 15 0/15 5/15
Argentina 15 0/20 10/18
Armenia 5/10 0/10 7
Australia 15 0/10 10
Austria 15 0/10 0/10
Azerbaijan 10 0/10 5/10
Bangladesh 10/15 0/10/15 10
Barbados 5/15 0/5 5
Belarus 5/15 0/8 6
Belgium 15 0/15 5
Bosnia and Herzegovina (Yugoslavia Ex) 10 10 10
Brazil 15 0/15 15/25
Bulgaria 10 0 5
Canada 5/15 0/10 0/5/10
Chile 5/10 4/5/10/15 2/5/10
China, People’s Republic of 10 0/10 10
Congo, Republic of 8/15 0 10
Croatia 15 0/10 5
Cyprus 15 10 0
Czech Republic 15 0 0/5
Denmark 0/15 0/10 0/5
Ecuador 15 0/10 5
Egypt N/A 0/25 15
Estonia 5/15 0/10 0/5/10
Ethiopia 10 0/10 20
Finland 10/15 0/15 0/5
France 5/15 0/10 0/5
Georgia 5/10 0 0
Germany 10/15 0/10 0/5
Ghana 5/15 10 10
Greece 15 0/10 0/5
Hong Kong 10 0/12.5 15
Hungary 10 0 0
Iceland 5/15 0 5
India 15/25 0/15 20
Indonesia 10/15 0/10 10/15
Ireland 15 10 0
Israel 10/15 10 0/10
Ivory Coast 15/18 15 10
Japan 10/15 10 10
Jordan 10 0/10 10
Kazakhstan 5/15 0/10 10
Kyrgyzstan 15 0 0
Kuwait 0/5 0 10
Latvia 5/15 0/10 5/10
Lebanon 5/15 0 0
Lithuania 5/15 0/10 5/10
Luxembourg 15 0/10 10
Macedonia 5/15 0/10 0
Malaysia 10 0/15 0/15
Malta 15 0/10 0/10
Mauritius 5/15 N/A 15
Mexico 15 0/10/15 0/15
Moldova 5/15 5 5
Mongolia 5/15 0/10 5
Montenegro (Yugoslavia Ex) 10 10 10
Morocco 10/15 0/10 5/10
Mozambique 15 0/10 10
Netherlands 5/10/15 0/10 5
New Zealand 15 0/10 10
Norway 15 0/15 5
Oman 5/10 0/5 10
Pakistan 15/25 0/30 30
Panama 5/10 5/10 10
Philippines 15 0/10/15 25
Poland 10 0/10 10
Portugal 15 0/15 12
Qatar 5/15 0/5 5
Romania 0/5 0/5 5
Russia 5/10 10 0
San Marino 0/5/15 0/13 0/10
Saudi Arabia 5/10 0/5 10
Senegal 15 0/15 15
Serbia (Yugoslavia Ex) 10 10 10
Singapore 10 0/12.5 15/20
Slovak Republic 15 0 0/5
Slovenia 5/15 0/10 5
South Africa 5/15 0/10 6
South Korea 10/15 0/10 10
Spain 15 0/12 4/8
Sri Lanka 15 0/10 10/15
Sweden 10/15 0/15 5
Switzerland 15 12.5 5
Syria 5/10 0/10 18
Taiwan 10 10 10
Tajikistan 15 0 0
Tanzania 10 15 15
Thailand 15/20 0/10 5/15
Trinidad and Tobago 10/20 10 0/5
Tunisia 15 0/12 5/12/16
Turkey 15 15 10
Turkmenistan 15 0 0
Uganda 15 0/15 10
Ukraine 5/15 0/10 7
United Arab Emirates 5/15 0 10
United Kingdom 5/15 0/10 8
United States 5/15 0/10 0/5/8
Uzbekistan 10 0/5 5
Venezuela 10 0/10 7/10
Vietnam 5/10/15 0/10 7.5/10
Zambia 5/15 0/10 10

Notes

  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.