Italy: Royalties taxation, reduced withholding tax rate | KPMG | GLOBAL

Italy: Court decisions on royalties taxation, reduced withholding tax rate

Italy: Royalties taxation, reduced withholding tax rate

A court in Milan held that payments made by an Italian distributor to foreign suppliers for the right to distribute copies of software, but without any rights to exploit and reproduce the program, are not royalties but represent business income. Accordingly, such payments are subject to withholding tax (at a rate of 30%).

1000

Related content

Another court decision, also issued by a court in Milan, clarifies that to claim a reduced withholding tax rate under an income tax treaty or the EU Parent-Subsidiary Directive, the foreign recipient of the income (royalties and dividends) must demonstrate that it is the actual beneficiary of the income. A mere certificate of residence, issued by the foreign tax authorities, is not sufficient.

 

Read a March 2017 report [PDF 182 KB] prepared by the KPMG member firm in Italy

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit