A double taxation treaty enables offsetting tax paid in one of two countries against the tax payable in the other, in this way avoiding double taxation.
The Italy – Canada agreement was signed on November 17, 1977 and modified by a protocol on March 20, 1989.
who want to start a business on the Italian market
can profit from the provisions described in the agreement for the avoidance
of double taxation signed between Italy and Canada
Tax covered by the Italy – Canada DTA
The treaty signed by the two contracting countries is available for profits and capital taxes offered for natural persons and legal entities, which are tax-residents of Italy or Canada.
The existing taxes on which the treaty shall apply are, in particular:
1. in the case of Canada:
the income taxes enforced by the Government of Canada, (referred to as "Canadian tax");
2. in the case of Italy:
i. the individual income tax (imposta sul reddito delle persone fisiche);
ii. the local income tax (imposta locale sul redditi),
the corporate income tax
(imposta sul reddito delle persone giuridiche); (referred to as “Italian tax”).
The Convention shall apply also to any matching or considerably similar taxes which are enforced after the date of signature of the Convention other than, or in place of, the existing ones.
The authorities of the Contracting States
shall inform each other of changes which have been made in their own taxation regulations
Taxation of the business profits
When opening or registering a company in Italy
, the local authorities will apply the income taxes
only for the profits
gained through the place of business
created on the Italian
land, if that formation
is a long-lasting one.
As a mutual rule, the profits of a Canadian corporate working in a foreign country will be taxed only in Canada.
You can contact
our team of company incorporation specialists in Italy
if you want additional information about double tax treaty between Italy and Canada