who want to open a business
on the Italian market can profit of the provisions specified in the agreement for the avoidance of double taxation
signed between Italy
The treaty was signed in July 1993 and entered into force starting with 3rd of October 1993.
Tax covered by the Italy – Netherlands DTA
The agreement signed by the two contracting countries is available for income and capital taxes accessible for natural persons and legal entities, which are tax-residents of Italy or Holland.
According to the treaty, the Italian authorities refer to the succeeding taxes:
• the corporation tax;
• the capital tax;
• the income tax on individuals;
• the income tax applicable to non-resident individuals;
• taxes on capital.
Depending on the classifications involved, these agreements develop the possibility for both countries to tax the same income (concurrent taxation) or, sometimes, the exclusive taxation by one country only.
The rule recognized for the main types of income (dividends, royalties, interest) affirms, with few exceptions, that the beneficiary pays tax in the state of residence. These limits have immovable rates which, in many situations, are lower than those in force on a general level.
The guidelines established by the tax treaty between Italy and Holland can provide, upon request by the tax payer, the right to be reimbursed by the source state of any paid tax, in case it surpasses the amount recognised by the agreement.
Taxation of the business profits
It is significant to know that when opening a company in Italy
, the local authorities will enforce the income taxes only for the profits gained through the place of business established on the Italian land, if that establishment is a permanent one.
As a common rule, the profits of a Dutch business operating in a foreign country will be taxed only in Netherlands.
Please feel free to contact
our team of company incorporation agents in Italy
if you want additional information regarding double tax treaty between Italy and Netherlands