moodle2.units.it · IVIE e IVAFE (Foreign property and assets tax) 72 12.9. Contributo di solidarietà (Solidarity surcharge) 72 12.10. Tassazione aggiuntiva (Tax on bonuses and stock

Rebecca Sian MacKian

the language of the italianaccountancy profession

Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

the language of italian accountancy profession

9 788899 517052

ISBN 978-88-99517-05-2

ISBN 978-88-99517-05-2

© Copyright Fondazione Nazionale dei Commercialisti. Edition July 2015

The translation, adaptation in whole or in part, reproduction by any means (including microfilm, film, photocopies), and electronic storage are reserved in every country.

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Table of Contents

Preface 1

1. The Role of the Commercialista (Il ruolo del commercialista) 3

2. Types of Companies (Tipologie di società) 52.1. Impresa individuale (Sole trader) 5

2.2. Società in nome collettivo (S.n.c.) (General partnership) 6

2.3. Società in accomandita semplice (S.a.s.) (Limited partnership) 6

2.4. Società per azioni (S.p.A.) (Joint-stock company) 7

2.5. Società in accomandita per azioni (S.a.p.a.) (Partnership limited by shares) 8

2.6. Società a responsabilità limitata (S.r.l.) (Limited liability company) 8

2.7. Società a responsabilità limitata semplificata (S.r.l.s.) (Simplified limited liability company) 9

2.8. Sede secondaria (Branch) 9

2.9. Ufficio di rappresentanza (Local representative office) 10

3. Company formation (Costituzione di società) 123.1. Impresa individuale (Sole trader) 12

3.2. Società di persone (Partnerships) 13 Società in nome collettivo (S.n.c.) (General partnership) Società in accomandita semplice (S.a.s.) (Limited partnership)

3.3. Società di capitale (Companies with share capital) 14 Società per azioni (S.p.A.) (Joint-stock company)

The language of the Italian accountancy profession

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Società in accomandita per azioni (S.a.p.a.) (Partnership limited by shares)Società a responsabilità limitata (S.r.l.) (Limited liability company)

3.4. Società a responsabilità limitata semplificata (S.r.l.s) (Simplified Limited liability company) 16

3.5. Joint venture (Joint ventures) 17

3.6. Fusioni e acquisizioni (Mergers and acquisitions) 17

4. Management and Control Systems (Sistemi di Amministrazione e Controllo) 18

4.1. Il sistema tradizionale (Traditional system) 18

4.2. Il sistema dualistico (Two-tier system) 19

4.3. Il sistema monistico (One-tier system) 19

4.4. Amministratori (Directors) 20

4.5. Collegio Sindacale (The Board of Statutory Auditors) 21

4.6. Obblighi di revisione (Audit requirements) 22

4.7. Assemblea dei soci (Shareholders’ meetings) 23

4.7.1. Assemblea ordinaria (Ordinary meeting) 23

4.7.2. Assemblea straordinaria (Extraordinary meeting) 24

5. Accounting Regimes (Regimi di Contabilità) 255.1. Contabilità e rendicontazione (Accounting and reporting) 25

5.2. Regimi di Contabilità (Accounting regimes) 26

5.3. Contabilità Semplificata (Simplified Accounting) 26

5.4. Adempimenti contabili e fiscali – contabilità semplificata (Accounting and tax requirements - simplified accounting) 27

5.4.1. Registro IVA acquisti (The VAT purchase register) 27

5.4.2. Registro IVA vendite (The VAT sales register) 27

Indice

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5.4.3. Registro corrispettivi (The register of daily takings) 28

5.4.4. Registro dei beni ammortizzabili (Book of depreciable assets) 28

5.4.5. Registri previsti per i dipendenti (Compulsory Employee registers) 28

5.5. Contabilità Ordinaria (Ordinary Accounting) 29

5.6. Adempimenti contabili e fiscali- Contabilità Ordinaria (Accounting and tax requirements – Ordinary Accounting) 29

5.6.1. Registri Iva (VAT registers) 29

5.6.2. Registro dei beni ammortizzabili (Book of depreciable assets) 29

5.6.3. Libro inventari (The Inventory register) 30

5.6.4. Libro giornale (The Day Book/Journal) 30

5.6.5. Libro mastro (The General ledger) 30

5.6.6. Registri previsti per i dipendenti (Compulsory Employee registers) 30

5.6.7. Libri sociali (Statutory Books) 31

6. Financial Statements (Il Bilancio) 326.1. Bilancio annuale (Annual financial Statements) 32

6.2. Stato patrimoniale (The balance sheet) 33

6.3. Conto economico (The profit and loss account) 36

6.4. Nota integrativa (Notes) 39

6.5. Relazione sulla gestione (The directors’ report) 39

7. Business Taxation (Tassazione delle Imprese) 417.1. Imposta sul Reddito delle Società (IRES) (Corporate income tax) 42

7.1.1. Base imponibile (Tax base) 42

7.1.2. Aiuto alla Crescita Economica (Support for Economic growth) 42

7.1.3. Costi deducibili (Deductible costs) 42


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7.1.4. Interessi passivi (Interest expenses) 43

7.1.5. Ammortamenti (Depreciation) 43

7.1.6. Ricerca e sviluppo (Research and development) 44

7.1.7. Rimanenze (Inventory) 44

7.1.8. Perdite fiscali (Tax losses) 44

7.1.9. Plusvalenze (Capital gains) 44

7.2. Imposta Regionale Attività Produttive (IRAP) (regional tax on productive activities) 45

7.2.1. Base imponibile (Taxable Income) 45

7.3. Sgravio della doppia imposizione (Double taxation relief) 45

7.4. Dichiarazione dei redditi e pagamento (Income tax return and payment) 46

7.5. Studi di settore (Sector studies) 46

7.6. Consolidato fiscale (Corporate Income tax consolidation) 47

7.7. Prezzi di trasferimento (Transfer pricing) 47

8. Withholding Taxes (Ritenuta d’Imposta) 498.1. Dividendi (Dividends) 49

8.2. Interessi (Interest) 50

8.3. Canoni (Royalties) 50

8.4. Salari e oneri sociali (Wages and social security) 51

8.5. Altre imposte (Other taxes) 51

9. VAT (IVA) 539.1. Aliquote (Rates) 53

9.2. Detrazione, esigibilità e rivalsa (Deduction, chargeability and reimbursement) 54

9.3. Apertura partita IVA (VAT Registration) 54

Indice

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9.4. Rappresentante fiscale (Tax representative) 55

9.5. Meccanismo di inversione contabile (Reverse charge mechanism) 55

9.6. IVA di gruppo (Vat grouping) 56

9.7. Operazioni transfrontaliere (Crossborder transactions) 56

9.7.1. Esportazioni di beni (Export of goods) 56

9.7.2. Prestazione di servizi (Rendering of services) 56

9.7.3. Importazione di beni (Import of goods) 57

9.8. Fatture IVA (VAT Invoices) 57

9.8.1. Fatturazione elettronica (E-invoicing) 58

9.9. Comunicazioni paesi Black list (Blacklist reporting) 58

9.10. Spesometro (Communication of sales and purchases) 58

9.11. Dichiarazione e pagamento (Filing and payment) 59

10. IUC Combined Municipal Tax (IUC - Imposta Unica Comunale) 6010.1. IMU Imposta municipale unica (Property tax) 60

10.2. TASI (Tassa sui servizi indivisibili) (Tax on general local services) 61

10.3. TARI (Tassa sui rifiuti) (Tax on waste) 61

10.4. Dichiarazione IUC (IUC Declaration) 61

11. Other Indirect Taxes (Altre Imposte Indirette) 6211.1. Imposta di registro (Registration tax) 62

11.2. Imposta ipotecaria (Mortgage tax) 63

11.3. Imposta catastale (Land registry tax) 63

11.4. Imposta di bollo (Stamp duty) 64

11.5. Imposta sulle transazioni finanziarie (Financial Transaction Tax) 65

11.6. Dazi doganali e accise (Customs and excise duties) 65


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11.7. Diritti camerali (Business register’s fee) 65

12. Taxes on Individuals (Tassazione delle Persone Fisiche) 6612.1. Residenza (Residence) 66

12.2. Imposta sul Reddito delle Persone Fisiche (IRPEF) (Personal income tax) 66

12.3. Reddito imponibile (Taxable Income) 67

12.3.1. Redditi fondiari (Income from land) 67

12.3.2. Redditi di capitale (Capital Income) 68

12.3.2.1. Interessi attivi (Interest income) 68

12.3.2.2. Dividendi e plusvalenze (Dividends and capital gains) 68

12.3.3. Redditi di lavoro dipendente (Employment income) 69

12.3.4. Redditi di lavoro autonomo (Self employment income) 69

12.3.5. Redditi di impresa (Business income) 69

12.3.6. Redditi diversi (Miscellaneous income) 70

12.4. Oneri deducibili (Deductible expenses) 70

12.5. Detrazioni (Allowances) 70

12.6. Aliquote IRPEF (Income tax rates) 71

12.7. Imposta di successione e donazione (Inheritance and gift tax) 71

12.8. IVIE e IVAFE (Foreign property and assets tax) 72

12.9. Contributo di solidarietà (Solidarity surcharge) 72

12.10. Tassazione aggiuntiva (Tax on bonuses and stock options) 73

12.11. Dichiarazione dei redditi e pagamento (Filing and payment) 73

12.12. Studi di settore (Sector studies) 73

13. Emplyment (Lavoro) 7413.1. Diritto del lavoro (Employment law) 74

Indice

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13.2. Classificazione dei lavoratori (Categories of workers) 74

13.3. Contratti di lavoro (Employment contracts) 75

13.4. Salari e stipendi (Wages and salaries) 76

13.5. Ferie (Holidays) 76

13.6. Congedo per malattia (Sick leave) 77

13.7. Congedo di maternità (Maternity leave) 77

13.8. Altri congedi (Other leave) 77

13.9. Cassa Integrazione (Temporary lay offs) 77

13.10. Cessazione del rapporto di lavoro (End of employment) 78

13.11. Retribuzioni e contributi previdenziali (Payroll and social security) 78

14. Dealing with Banks (Rapporti con le banche) 7914.1. Requisiti per aprire un conto bancario aziendale

(Requirements for opening a company bank account) 79

14.2. Finanziamento (Financing) 80

14.3. Glossario dei termini bancari più comuni (Glossary of most common banking terms) 81

15. Antitrust 8415.1. Accordi anticoncorrenziali e pratiche concordate

(Anti-competitive agreements and concerted practices) 84

15.2. Abuso di posizione dominante (Abuse of a dominant position) 85

15.3. Controllo delle concentrazioni (Merger control) 86

15.4. Tasse di registrazione (Filing fees) 87


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16. Anti-Corruption (Anticorruzione) 8816.1. Responsabilità amministrativa delle società (Corporate liability) 88

16.1.1. Modello organizzativo e gestionale (Compliance programme) 89

16.1.2. Sanzioni (Sanctions) 90

16.2. Anticorruzione (Anti-corruption law) 91

16.2.1. Induzione indebita a dare o promettere utilità (Induced bribery) 91

16.2.2. Traffico di influenze illecite (Dealings in unlawful influences) 92

16.2.3. Corruzione tra privati (Private bribery) 92

16.2.4. Disposizioni in materia di delitti contro la pubblica amministrazione, di associazioni di tipo mafioso e di falso in bilancio (Provisions on crimes against public administration, mafia type associations and false accounting) 93

17. Insolvency (Procedure Concorsuali) 9517.1. Fallimento (Bankruptcy) 95

17.2. Concordato preventivo (Pre-insolvency creditor arrangement) 95

17.3. Accordi di ristrutturazione dei debiti (Debt restructuring agreement) 98

18. Business Culture in Italy 100

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Preface

One of the aims of the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (National Council of Chartered Accountants and Accounting Experts) and the Fondazione Nazionale Commercialisti (National Foundation of Chartered Accountants) is to encourage and help accountants to become familiar with the English terminology relating to a broad range of professional matters.EXPO Milano 2015 has now given us the opportunity to introduce our ‘technical language’ to a large international audience via this book, which will, at the same time, serve as a springboard to an effective presence in the ‘ internationalisation’ of the economy and businesses.The distinctive feature of this book is that it is written in English, thus making it accessible to a wider range of readers, as English is universally recognised as the language of business. Its aim is to facilitate, in a general sense, the understanding and orientation of the Italian system by foreigners, while improving the effectiveness of the professional advice provided to operators and consultants coming to Italy.It has not, of course, been written with the intention of teaching the underlying subject matter to professionals, who are already experts in the fields of company law, taxation and accounting. Its aim is rather to present topics which might be of interest from a foreigner’s point of view, with the aim of enabling practical and effective communication between the parties.For an easier consultation, the contents have been divided into subject areas, providing useful explanations but without excessive technicalities .It is intended as an informative guide and not as a technical manual of legislation or a vocabulary, for which we recommend the consultation of specialised legal texts and updates.The commecialisti may also find it a useful tool for those Italian businesses interested in foreign markets, supporting them in drawing up accounting and management documentation using the correct English terminology.


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This treasured idea has taken form thanks to the author of the book, Rebecca MacKian, a bilingual chartered accountant in the UK and teacher of financial English in Italy, whom we would like to thank for her professionalism and ability to put together the requirements of this book in an exhaustive manner.

Fondazione Nazionale dei CommercialistiScientific DirectorGiovanni Castellani

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1. The role of the Commercialista

Il ruolo del Commercialista

The role of the commercialisti is not easy to define since their activities are very diverse, spanning all areas of accounting, finance and control (amministrazione, finanza e controllo), including tax (materia fiscale) and tax law (diritto tributario) which enables them to carry out duties that are often reserved for tax lawyers in other countries. They have expertise in corporate governance (amministrazione societaria), commercial management (gestione commerciale), legal contracts (contrattualistica), finance (finanza), taxation (materia fiscale), tax legal issues (tributaria), accounting and reporting (contabilità e rendicontazione), liquidations and bankruptcy (liquidazione e fallimenti), auditing of financial statements (revisione dei bilanci), the board of statutory auditors (collegio sindacale), acquisitions and disposals (acquisizioni e cessioni), inheritance (successione), legal, tax and corporate inspections (ispezioni giudiziarie, tributarie e amministrative) and so the list goes on.They provide services and advice to businesses (imprese), private individuals (privati cittadini) and public entities and institutions (enti pubblici e istituzioni).For businesses, the Commercialista represents a key advisor for all stages of the life of a company from its creation (nascita) to the winding up (cessazione). In the beginning, they can help define business plans (progetti imprenditoriale) and draw up budgets and forecasts (budget e previsioni) as well as help decide on the most suitable legal form (forma giuridica) and advise on assets management (gestione patrimoniale) and so on.Once the business is up and running the commercialista deals with everything covered by their terms of engagement (mandato) ranging from finance (finanza) to company law (diritto societario), from audit (revisione contabile) to business valuations (valutazioni aziendali), from company management (gestione amministrativa) to tax matters (materia fiscale).They deal with recapitalisations (ricapitalizzazioni), helping gain access to finance (accesso alla finanza), procedures related to listing on a stock exchange (procedure per la quotazione in borsa), oversee mergers (fusioni) and


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acquisitions (acquisizioni) and sales of quotas (cessioni di quote) in addition to performing the necessary tasks related to general accounting (contabilità generale), preparation of the financial statements (redazione dei bilanci) and the audit of accounts and financial statements (revisione e controllo della contabilità e del bilancio) in compliance with accounting and auditing principles (principi contabili e di revisione). The commercialista also deals with many of the legal and bureaucratic aspects (aspetti giuridici e burocratici) relating to the liquidation (liquidazione) of a business (impresa).In their dealings with private individuals, commercialisti handle the sale of immovable and movable property (beni immobili e mobili), the drawing up of contracts (contratti), the resolution of problems relating to inheritance (eredità) and estate (patrimonio), preparation and filing of income tax returns (dichiarazione dei redditi) and other personalised financial advice.In order to qualify and practice as a commercialista, an individual must take a five-year degree in Economics and Business Administration (laurea in Economia e Commercio), complete at least 18 months of training (tirocinio) at a professional firm of accountants, as well as pass a state examination (esame di stato), and enrol in the professional register (albo professionale) maintained by the local territorial branch (Ordine Territoriale).In order to maintain the level of competency necessary to provide high quality services to clients and other stakeholders, commercialisti are required to engage in a programme of continued professional development (formazione continua) to earn annual training credits (crediti formativi annuali).The profession is governed by a code of conduct (codice deontologico) that contains the principles and rules that professionals must follow while exercising their profession.

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2. Types of Companies

Tipologie di società

The procedure for setting up a business in Italy is regulated by the Italian Civil Code (Codice Civile) which offers a wide range of legal forms to choose from. The main types of companies (società) available to foreign investors are:

1) Impresa individuale (Sole trader)

2) Società di persone (Partnerships)

› Società in nome collettivo (S.n.c.) (General partnership)

› Società in accomandita semplice (S.a.s.) (Limited partnership)

3) Società di capitale (Companies with share capital)

› Società per azioni (S.p.A.) (Joint-stock company)

› Società in accomandita per azioni (S.a.p.a.) (Partnership limited by shares)

› Società a responsabilità limitata (S.r.l.) (Limited liability company)

› Società a responsabilità limitata semplificata (S.r.l.s.) (Simplified limited liability company)

As an alternative to the above, investors may of course decide to begin their business activities (attività) in Italy by establishing a branch (sede secondaria) or, in the initial stages at least, by beginning promotional or market research activities (attività di promozione o ricerche di mercato) through the opening of a local representative office (ufficio di rappresentanza).Let’s examine the various options in a little more detail.

2.1. Impresa individuale (Sole trader)

The Impresa individuale (also referred to as ditta individuale) is the simplest legal structure (forma giuridica) available for running a business.


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The sole trader (imprenditore individuale) assumes all decision-making responsibilities of the enterprise and bears unlimited liability (responsabilità illimitata) for any debts (debiti) incurred.

2.2. Società in nome collettivo (S.n.c.)(General partnership)

Partnerships are characterised by the personal commitment of each partner to work together within the partnership. The società in nome collettivo can be formed by two or more partners (soci) who have joint and several liability (responsabilità illimitata e solidale) for the partnership’s obligations (obbligazioni sociali). This means that the individual partners are personally liable (personalmente responsabile) for the liabilities of the partnership (debiti della società) and that this liability may also extend to their own private assets (patrimonio personale). Partners in a general partnership (società in nome collettivo) always have unlimited liability for the partnership’s obligations and any agreement (accordo) stating otherwise is not legally binding (giuridicamente vincolante).There is no minimum capital (capitale minimo) requirement and an S.n.c. has no separate legal identity (distinta identità giuridica).

2.3. Società in accomandita semplice (S.a.s.)(Limited partnership)

The società in accomandita semplice has two different types of partners: general partners (soci accomandatari) and sleeping or silent partners (soci accomandanti). There must be at least one partner of each type and each type of partner has different levels of liability (responsabilità).The soci accomandatari, or general partners, are responsible for the administration and management (amministrazione e gestione) of the partnership and have joint and several liability (responsabilità illimitata e solidale) for the partnership’s obligations (obbligazioni sociali) in the same way as the partners in an S.n.c.


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The liability of sleeping or silent partners (soci accomandanti) in a S.a.s. however, is generally limited to the amount of capital they have contributed (limitatamente alla quota conferita) and they are not directors (amministratori) and do not get involved in the management of the business (gestione della società).Limited partners are also forbidden from negotiating or doing business in the name of the partnership (compiere atti in rappresentanza della società) except when granted a special power of attorney for specific business activities (procura speciale per singoli affari). Any limited partner who disregards this prohibition will take on unlimited liability (assume responsabilità personale ed illimitata) for all partnership debts and may also be excluded from the partnership (escluso dalla società).There is no minimum capital (capitale minimo) requirement for the S.a.s. and it has no separate legal identity (distinta identità giuridica).

2.4. Società per azioni (S.p.A.)(Joint-stock company)

The società per azioni is likely to be the most suitable business form (forma giuridica) for medium and large companies (medie e grandi imprese), especially those in need of contributions from investors (contributi di investitori) in the form of large numbers of shareholders (azionisti). It is also the compulsory type of company for businesses wishing to be listed on the regulated markets (quotate nei mercati regolamentati).There is a minimum capital requirement (capitale sociale minimo) of € 50,000. At least 25% of the capital subscribed (capitale sottoscritto) must be paid in (versato) at the moment the company is formed. If the company is set up by a single shareholder (unico socio) then 100% of the capital must be paid in.The capital is divided into shares (azioni) which represent the equity holding of the shareholders (partecipazioni dei soci).An S.p.A. can issue (emettere) shares (azioni), bonds (obbligazioni) and other financial instruments (strumenti finanziari) which can be listed on a stock-exchange (quotate in borsa).


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The S.p.A. has separate legal personality (distinta identità giuridica) and therefore its shareholders have limited liability (responsabilità limitata) and are not liable beyond the amounts they have subscribed (limitata all’ importo del capitale che hanno sottoscritto).

2.5. Società in accomandita per azioni (S.a.p.a.)(Partnership limited by shares)

The Società in accomandita per azioni combines some of the features of both a limited partnership (S.a.s.) and a joint stock company (S.p.A.). Unlike the S.a.s, the S.a.p.a. has its own separate legal identity (distinta identità giuridica) but it presents the same distinction between general partners (soci accomandatari), who have joint and several liability (responsabilità illimitata e solidale) for the partnership’s obligations (obbligazioni sociali), and sleeping or silent partners (soci accomandanti) whose liability is limited to the amount of capital they have contributed (limitatamente alla quota conferita).Otherwise the S.a.p.a. is similar to an S.p.A. and the rules applicable to the S.p.A. also generally apply to the S.a.p.a., including minimum share capital (capitale sociale minimo) requirements.

2.6. Società a responsabilità limitata (S.r.l.(Limited liability company)

The Società a responsabilità limitata is a popular form for small businesses (piccole imprese) due to it being reasonably flexible to set up and run. The minimum capital requirement (capitale sociale minimo), € 10,000, is lower than that of an S.p.A. and investments are not represented by shares (azioni) but by quotas (quote). As with the S.r.l., at least 25% of the capital subscribed (capitale sottoscritto) must be paid in (versato) at the moment the company is formed. If the company is set up by a single member (unico socio) then 100% of the capital must be paid in.These quotas (quote) are generally held by a limited number of quotaholders (soci) in proportion to their initial contribution (conferimento iniziale). The


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rights of each quotaholder are proportional to their quotaholding (diritti del socio sono proporzionali alla partecipazione). Quotaholders often play an active role in the running of the business (la gestione della società). The S.r.l. has a separate legal identity (è dotata di personalità giuridica) and as such is liable for its obligations (obbligazioni sociali) only to the extent of the amount of the quotas paid in by each quotaholder (solamente nei limiti delle quote versate da ciascun socio).An S.r.l. may issue debt instruments (emanare titoli di debito) which are similar to bonds (obbligazioni), but, unlike bonds may only be subscribed for by professional investors (investitori professionali).Additionally, the quotas of an S.r.l. cannot be incorporated into certificates (certificati) or quoted on a stock exchange (quotate in borsa).

2.7. Società a responsabilità limitata semplificata (S.r.l.s.)(Simplified limited liability company)

The Società a responsabilità limitata semplificata is a relatively new form of business which has been introduced in order to simplify the process of setting up a limited liability company in Italy.The S.r.l.s. is similar to the S.r.l. but with some restrictions relating to company structure and function (struttura e funzione).Members (soci) must be individuals (persone fisiche). It can be set up by one or more members with a minimum capital requirement (capitale sociale minimo) of 1 euro and a maximum (massimo) of € 10,000 subscribed and fully paid in on the date of incorporation (sottoscritto e interamente versato all’atto della costituzione).

2.8. Sede secondaria(Branch)

An alternate approach to standard incorporation for a foreign investor may be to establish a sede secondaria in Italy.


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According to Italian legislation, a sede secondaria must be registered when a foreign company carries out any business activities (svolge attività produttive o commerciali) such as the sale of goods (vendita di beni) or provision of services (prestazione di servizi) through an Italian office (sede italiana). By engaging in such business activities (attività) the company is required to be permanently established (stabile organizzazione) in Italy.A sede secondaria has no minimum capital requirements (capitale minimo) and, generally, the corporate formalities required for a branch are less burdensome (onerosi) than those for a subsidiary (società controllata).On the other hand, since the sede secondaria and the foreign company (società estera) are considered to be the same legal entity (un’unica entità giuridica), the foreign company remains directly responsible (direttamente responsabile) for all the liabilities of the Italian sede secondaria and is responsible for its initiatives.The establishment of a sede secondaria requires the nomination of a representative (rappresentante stabile) domiciled in Italy (domiciliato in Italia) who has all the necessary powers to manage the branch and represent the company in dealings with third parties (trattative con terze parti).Although the sede secondaria has no separate legal identity, it is still subject to Italian laws and regulations (è soggetta alla normativa italiana).

2.9. Ufficio di rappresentanza (Local representative office)

An ufficio di rappresentanza is the quickest and least expensive way (modo più veloce e meno costoso) available to a foreign company wishing to have a minimum presence in Italy (presenza in Italia) but it cannot be used for business activities (non può svolgere direttamente attività commerciali) relating to the sale or purchase of goods or services (vendita o acquisto di beni o servizi).The ufficio di rappresentanza may be used solely for promotional activity (attività promozionale) and marketing research (ricerche di mercato) and other non-business operations such as the storage, delivery and display of goods (stoccaggio, esposizione o consegna di beni) belonging to the foreign company (società estera).


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It does not represent the foreign company vis-à-vis third parties and so may not issue invoices to or accept payments (non può emettere fatture o ricevere pagamenti) from, customers (clienti).It is not a separate legal identity (non e’ un ente giuridico) and it is not considered to be a permanent establishment for tax purposes (stabile organizzazione ai fini fiscali).

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3. Company formation

Costituzione di società

The legal and bureaucratic issues (aspetti legali e burocratiche) involved in setting up your company in Italy will very much depend upon the type of company (tipo di società) you have chosen for your business activity (attività).The important issues relating to each type of company identified in the previous chapter are outlined below.

3.1. Impresa individuale(Sole trader)

Before registering to commence trading with an Impresa individuale you will need proof of identity in the form of an identity card (documento di identità) or passport (passaporto), an Italian fiscal code (codice fiscale), and a valid residency permit (permesso di soggiorno) in the case of non EU citizens.Registering an Impresa individuale is reasonably straightforward and quick. The first step is to register the intention to start trading with the Italian Business Register (Registro Imprese) which is maintained by the Chambers of Commerce (Camere di Commercio).The Italian Business Register (Registro Imprese) is a register of company details (anagrafe delle imprese) and is an information system containing details (dati) of all companies (imprese), of any type (forma giuridica), operating in Italy.Its aim is to publish consistent and reliable information. It is a public register (registro pubblico) and includes data relating to matters, such as the foundation (costituzione), modification (modifica) and dissolution (cessazione) of businesses (imprese), financial statements (bilanci), representation powers (poteri di rappresentanza), and changes in shareholders (soci).Registration with the Registro Imprese can be done via their online Single Notification system (Comunicazione Unica). To use this system you will be required to use a digital signature (firma digitale) and a certified email address (casella PEC).


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The Registro Imprese will then pass information about the new company to the relevant agencies including:

› The Italian Revenue Agency (Agenzia delle Entrate) for a VAT number (partita IVA).

› The Social Security Department (Istituto Nazionale Previdenza Sociale - INPS) to register for national insurance.

› The Workers’ Compensation Authority (Istituto Nazionale Assicurazione Infortuni sul Lavoro - INAIL) to register for workers’ accident insurance if required.

Depending on the type of business you intend to carry on, it may also be necessary to apply for certain licences (licenze) or authorisations (permessi).The company name (ragione sociale) for the Impresa individuale must consist of two parts. These include the name you chose in your capacity as the owner (titolare), which is added to the end of your actual name as a suffix. This is required by law (previsto dalla legge) in order to highlight the owner of an Impresa individuale as the individual (persona fisica) who has personal liability (responsabilità personale) for the company.

3.2. Società di persone(Partnerships)

› Società in nome colletivo (S.n.c.) (General partnership)

› Società in accomandita semplice (S.a.s.) (Limited partnership)

Individuals wishing to enter into a partnership (società di persone) will first need to provide proof of identity (documento di identità), fiscal code (codice fiscale), valid residence permit (permesso di soggiorno) and so on, as outlined for the Impresa individuale in 3.1 above. To set up a partnership (società di persone) in the form of S.n.c. or an S.a.s., an agreement between the partners (soci) (at least two) must be drawn up before a notaio (a notary public). This can be done by a notarised deed (atto pubblico) or by a private agreement authenticated by a notary public (scrittura privata autenticata).


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The partnership agreement (atto costitutivo) must include, among other things, the following:

› information on the partners (soci)

› the partnership name (ragione sociale) which must include the name of at least one of the partners and an indication that it is an unlimited partnership (S.n.c) or a limited partnership (S.a.s.). The partners name to be included for the S.a.s. shall be one of the general partners (soci accomandatari)

› legal form (forma giuridica) i.e. whether it is an S.n.c. or an S.a.s.

› registered office (sede della società)

› the business purpose (oggetto sociale)

› the capital contributions by each partner (conferimenti di ciascun socio)

› rules relating to the distribution of profits and sharing of losses (ripartizione dei profitti e delle perdite)

› duration of the partnership (durata della società)

The partnership agreement (atto costitutivo) must be filed (depositato) with the Italian Business Register (Registro Imprese) and the relevant communications made to the tax authorities and social security department (enti fiscali e previdenziali obbligatori). This registration is done via the online Single Notification system (Comunicazione Unica) explained in 4.1 above.Any modification to the partnership agreement (atto costitutivo) can occur only with unanimous agreement (accordo unanime) of all partners, unless different agreements (accordi) are established between them.

3.3. Società di capitale(Companies with share capital)

› Società per azioni (S.p.A.) (Joint-stock company)

› Società in accomandita per azioni (S.a.p.a.) (Partnership limited by shares)

› Società a responsabilità limitata (S.r.l.) (Limited liability company)


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Companies with share capital (Società di capitale) may be set up by means of a contract between two or more natural or legal persons (persone fisiche o giuridiche).An S.p.A. or S.r.l. can also be set up by means of a unilateral agreement (S.p.A. or S.r.l. unipersonale). In all cases, the memorandum of association [US articles of incorporation] (atto costitutivo) must be drawn up by a notarised deed (atto pubblico) and submitted together with the articles of association [US bylaws] (statuto) to the Italian Business Register (Registro Imprese) and relevant agencies. (see 3.1 above)The incorporation of the company is not complete until it is entered into the Business Register (Registro Imprese).Share capital (capitale sociale) must be subscribed (sottoscritto) and at least 25% (100% in the case of an S.r.l. or an S.p.A. unipersonale) paid (versato) into a linked bank account (conto bancario).Any government authorisations (permessi) or licences (licenze) required for particular activities must be obtained.The minimum share capital requirement (capitale sociale minimo) for an S.p.A. or an S.a.p.a. is € 50,000. For an S.r.l. the minimum is € 10,000 unless it is a simplified S.r.l. in which case it can be setup with share capital of just € 1. (see 3.4 below)Directors (amministratori) and, in some cases a board of Statutory auditors (collegio sindacale) and/or an auditor or auditing firm (revisore legale or società di revisione) need to be appointed and directors and shareholders/quotaholders (soci) must apply for a fiscal code (codice fiscale).The memorandum and articles (atto costitutivo) must include, among other things, the following:

› company name (denominazione della società)

› registered office and local branches (sede della società e sedi secondarie)

› information on the shareholders/quotaholders (soci) and the number of shares/quotas assigned (numero delle azioni assegnate) to them. In the case of a S.a.p.a. there must be clear indication as to which partners are the general partners (accomandatari)


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› the value attributed to in-kind contributions (valore attribuito ai crediti e beni conferiti in natura)

› the business purpose (oggetto sociale)

› the amount of subscribed and paid-up capital (capitale sottoscritto e versato)

› information on shares (azioni)

› rules on distribution of profit (distribuzione degli utili)

› rules concerning the management (sistema di amministrazione e controllo) of the company

› the number of directors (numero degli amministratori) and their powers (poteri)

› the number of statutory auditors appointed (numero dei componenti del collegio sindacale)

› duration of the company (durata della società)

The company must also open accounting books (libri contabili) and statutory books (libri sociali) and records. (see chapter 5)

3.4. Società a responsabilità limitata semplificata (S.r.l.s)(Simplified Limited liability company)

The shareholders of an S.r.l.s must be natural persons (persone fisiche), not legal persons (persone giuridiche) such as companies or other bodies. Like in the case of an ordinary S.r.l., it is possible for a single shareholder (socio unico) to set up an S.r.l.s..There is a minimum capital requirement (capitale sociale minimo) of € 1 and a maximum (capitale massimo) of € 10,000. The capital must be fully paid (interamente versato) in cash upon incorporation.The memorandum and articles of association (atto costitutivo) must be drafted as a public deed (atto pubblico) by notary public (notaio) in line with a standard model (modello standard) prescribed by law.No notary fees (onorario notarile) are payable.


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3.5. Joint venture(Joint ventures)

Various forms of joint venture are possible under Italian law. The two basic types are:

› contractual joint ventures (joint venture contrattuali) where two or more parties (soggetti), usually businesses (imprese), decide to collaborate (collaborare) on a joint project (progetto comune) based on a contract (contratto) between the various parties without the creation of a new company (società)

› incorporated joint ventures (joint venture societarie) where the various parties join together to form a new company (costituire una nuova società)

Contractual joint ventures (joint venture contrattuali) may be:

› consortia (consorzi)

› temporary groups of enterprises (associazioni temporanee d’ impresa)

› profit participation agreements (associazioni in partecipazione)

› network agreements (distretti produttivi, catene di fornitura and reti d’ impresa)

Joint venture companies (joint venture societarie) may be incorporated as partnerships (società di persone) or companies (Società di capitale).

3.6. Fusioni e acquisizioni(Mergers and acquisitions)

The Italian competition authority (Autorità Garante della Concorrenza e del Mercato) must be informed of any merger in which the turnover (fatturato) of the companies involved exceeds certain thresholds (soglie). See Chapter 15.

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4. Management and Control Systems

Sistemi di Amministrazione e Controllo

Under Italian legislation, an S.p.A. may choose from three different models of governance (modelli di governance):

› Traditional system (il sistema tradizionale)

› Two-tier system (il sistema dualistico)

› One-tier system (il sistema monistico)

The regulations relating to the S.p.A. are also applicable, with some exceptions, to partnerships limited by shares (Società in accomandita per azioni) (S.a.p.a.).In comparison with the S.p.A., the S.r.l is a very flexible type of company which can be created to best fit the particular objects of a business. To ensure the best use of this flexibility it’s important to think carefully about the contents of the articles of association [US bylaws] (statuto). For an S.r.l. there are many possible forms of management (gestione) including appointing a sole managing director (amministratore unico), a board of directors (consiglio di amministrazione) or even a management model where directors are not appointed to a board but can exercise their powers jointly or separately (congiuntamente or separatamente). Special rights (diritti speciali) can be assigned to different shareholders in relation to administrative rights (diritti amministrativi) or the distribution of profits (distribuzione degli utili).

4.1. Il sistema tradizionale(Traditional system)

This is the standard and most commonly used corporate governance model in Italy and is applied automatically, unless a different model is specified in the articles of association (si applica in mancanza di diversa scelta statutaria). Under this system, the shareholders’ meeting (assemblea dei soci) appoints the board of directors (consiglio di amministrazione) or a sole director


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(amministratore unico), the board of statutory auditors (collegio sindacale) and the approved registered auditor or audit firm (revisore legale or società di revisione).

4.2. Il sistema dualistico(Two-tier system)

Under the two-tier system (sistema dualistico), corporate governance is entrusted to a supervisory board (consiglio di sorveglianza) and a management board (consiglio di gestione).The shareholders’ meeting (assemblea dei soci) appoints the supervisory board (consiglio di sorveglianza) which in turn appoints the management board (consiglio di gestione). The management board is responsible for running the business and also for appointing the approved registered auditor or audit firm (revisore legale or società di revisione).

4.3. Il sistema monistico(One-tier system)

Under the one-tier system (sistema monistico), the shareholders’ meeting (assemblea dei soci) appoints a board of directors (consiglio di amministrazione) which, in turn, appoints a control committee (comitato per il controllo sulla gestione) elected internally within the board and composed of independent, non-executive directors (amministratori non esecutivi).The shareholders’ meeting (assemblea dei soci) appoints the approved registered auditor or audit firm (revisore legale or società di revisione).


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4.4. Amministratori(Directors)

There are no limitations (limiti) on the number (numero), nationality (nazionalità) or residence (residenza) of directors who are appointed for a term (mandato) not exceeding three years (non superiore a tre anni).Listed companies (società quotate) and companies adopting the two-tier system (sistema dualistico) or the one-tier system (sistema monistico) cannot have a sole director (amministratore unico).In the traditional system, the sole director (amministratore unico) or the board of directors (consiglio di amministrazione) can exercise all the powers of management of the company (poteri per la gestione dell’ impresa).The board of directors (consiglio di amministrazione) can delegate specific functions and grant the relevant management powers (poteri di gestione) to a managing body (comitato esecutivo) or to a particular director.Certain specific functions cannot be delegated however, including:

› The preparation of the annual financial statements (redazione del bilancio di esercizio)

› The power to increase share capital (facoltà di aumentare il capitale sociale)

› The drafting of a merger plan (redazione del progetto di fusione)

In an S.r.l. there is much more flexibility as regards the internal decision-making processes and the allocation of responsibilities between quotaholders (soci) and director(s) (amministratore/i).However, the law expressly states (prevede esplicitamente) that quotaholders are entitled to vote (i soci hanno diritto di votare) on the following:

› Approval of the financial statements (approvazione del bilancio)

› Appointment of directors (nomina degli amministratori)

› Appointment of statutory auditors or of a single auditor (nomina del Collegio Sindacale or revisore legale)

› Changes to the articles of association (modifiche statutarie)

› Material change in the company’s purpose (modifica dell’oggetto sociale)


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4.5. Collegio Sindacale(The Board of Statutory Auditors)

Since most companies incorporated in Italy choose to adopt the traditional system (sistema tradizionale) of corporate governance, it is worth to furhter looking at the role of the board of statutory auditors (collegio sindacale).The members of the board of statutory auditors (collegio sindacale) are entrusted with the supervision of the following areas:

› compliance with the law and the articles of the company (osservanza della legge e dello statuto)

› correct administration and internal controls (rispetto dei principi di corretta amministrazione)

› adequacy and reliability of the organisational and administrative structure and of the accounting system (adeguatezza dell’assetto organizzativo, amministrativo e contabile)

The Collegio Sindacale is made up of three or five permanent members (membri effettivi) and two alternate members (membri supplenti). The auditors (sindaci) must be independent professionals registered in the professional roll (iscritti nell’albo) or university professors (professori universitari di ruolo) of economics or law. At least one member and one alternate member must be enrolled in the register of auditors (iscritti nel registro dei revisori legali) at the Ministry of Justice.The board of statutory auditors (collegio sindacale) is appointed by the board of directors for a period of three years (tre esercizi). It cannot be dismissed except for just cause (per giusta causa) and with the approval of the local court (approvata dal competente tribunale).The board of statutory auditors (collegio sindacale) must meet at least once every 90 days (ogni novanta giorni) either in person or, if not possible, using telecommunications (con mezzi di telecomunicazione). The Collegio Sindacale is properly constituted (regolarmente costituito) with the presence of the majority of statutory auditors are present, and resolutions are passed when approved by the absolute majority of those present (delibera a maggioranza assoluta dei presenti).


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For Italian limited liability companies (S.r.l. and S.r.l.s.) the appointment of a board of statutory auditors (collegio sindacale) is only required when:

› the company is required to prepare consolidated financial statements (obbligata alla redazione del bilancio consolidato)

› the company controls another company that is subject to statutory audit (società controlla società obbligate alla revisione legale)

› for two consecutive financial years (due esercizi consecutivi) the company has passed two of the following limits (superato due dei seguenti limiti):

a) total assets in the balance sheet (attivo dello stato patrimoniale): € 4,400,000

b) earnings from sales and provisions of services (ricavi delle vendite e delle prestazioni): € 8,800,000

c) average employees over the course of the financial year (dipendenti occupati in media durante l’esercizio): 50

4.6. Obblighi di revisione(Audit requirements)

In Italy the statutory audit (revisione legale dei conti) and quarterly audit (revisione trimestrale) can be carried out by the board of statutory auditors (collegio sindacale) or be assigned to an audit firm or an approved registered auditor (società di revisione or revisore legale). The appointment of an external auditor (revisore legale) is compulsory (obbligatorio) for listed companies (società quotate) and subsidiaries of listed companies (società controllate da società quotate), for companies required to prepare consolidated financial statements and for banks (banche) and other regulated financial institutions (istituzioni finanziarie regolamentate). In the case of an S.p.A. which is not listed (non quotata) nor controlled by a listed company (controllata da società quotata), the audit may be assigned to the board of statutory auditors (collegio sindacale). In this case, all the members of the board of auditors must be enrolled in the register of auditors (iscritti nel registro dei revisori legali).


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For S.r.l. when the audit is compulsory or when it is voluntarily opted for by the company, it may be conducted by the board of statutory auditors (collegio sindacale), by an audit firm (società di revisione) or an approved registered auditor (revisore legale).

4.7. Assemblea dei soci(Shareholders’ meetings)

Shareholders’ meetings may be ordinary (assemblea ordinaria) or extraordinary (assemblea straordinaria) depending on the decisions which need to be taken.

4.7.1. Assemblea ordinaria(Ordinary meeting)

The normal business of an ordinary meeting is:

› To approve the financial statements (approva il bilancio)

› To appoint and remove directors (nomina e revoca amministratori)

› To appoint the members and the chairman of the board of statutory auditors (nomina sindaci e presidente del collegio sindacale)

› If necessary, appoint the approved registered auditor or audit firm (nomina revisore legale or società di revisione)

› To decide upon directors’ and statutory auditors’ remuneration (determina il compenso degli amministratori e dei sindaci), unless already determined by the articles of association (statuto)

› To discuss all other matters relating to the performance of the company and the responsibility of the directors and statutory auditors.

The ordinary meeting (assemblea ordinaria) must be called (convocata) at least once a year (almeno una volta all’anno) and within no more than 120 days from the end of the company’s financial year (chiusura dell’esercizio sociale). On its first call (prima convocazione), the ordinary meeting (assemblea ordinaria) must be attended by a number of shareholders representing at least


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half the share capital (almeno la metà del capitale sociale) to meet the quorum (quorum). Resolutions are passed when approved by the absolute majority of those present (delibera a maggioranza assoluta dei presenti).For the second call (seconda convocazione), no quorum is required

4.7.2. Assemblea straordinaria(Extraordinary meeting)

An extraordinary meeting is required to deal with matters such as:

› Amendments to the articles of association (modificazioni dello statuto)

› Issue of bonds (emissione di obbligazioni)

› Appointment of liquidators (nomina dei liquidatori)

On its first call (prima convocazione), the extraordinary meeting (assemblea straordinaria) must be attended by a number of shareholders representing more than a half of the share capital (più della metà del capitale sociale) to meet the quorum. The second call (seconda convocazione) requires attendance by shareholders representing more than one third of the share capital (più del terzo del capitale sociale).Resolutions are passed when approved by the absolute majority of those present (delibera a maggioranza assoluta dei presenti).

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5. Accounting Regimes

Regimi di Contabilità

5.1. Contabilità e rendicontazione(Accounting and reporting)

Accounting and reporting (contabilità e rendicontazione) in Italy are regulated by the Italian Civil Code (codice civile italiano), Italian tax regulations (leggi fiscali), Italian Accounting Standards (principi contabili italiani) and, where applicable, International Accounting Standards (principi contabili internazionali).All companies, either companies with share capital (società di capitale) or partnerships (società di persone), are required to keep accounting books and records of accounts (tenere libri contabili e scritture contabili). It should be remembered that the Italian branch of a foreign enterprise (sede secondaria) is subject to all Italian laws concerning bookkeeping (contabilità). A branch is therefore required to have its own accounting books and records (libri e scritture contabili).All books and records (libri, registri e documenti), including computerised records (contabilità informatizzata), must be kept for at least ten years (conservate per almeno dieci anni) from the date of the last entry (data dell’ultima annotazione), together with all related original documents (documenti originali) received (ricevuti) and issued (emessi) by the business.Companies with share capital (società di capitale) are also required to prepare annual financial statements (bilancio di esercizio) and to file (depositare) them with the Italian Business Register (Registro Imprese) within 30 days of their approval by the shareholders. See Chapter 6.Partnerships (società di persone) are required to draw up an annual report (rendiconto) showing the profit and loss for tax purposes but there is no filing requirement.In addition to their own financial statements (bilancio), Italian branches (sede secondarie) are required to file a certified translation of the financial


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statements of their foreign parent company (traduzione giurata del bilancio della società controllante straniera).

5.2. Regimi di Contabilità(Accounting regimes)

There are two main accounting regimes available in Italy:

› Simplified accounting (Contabilità Semplificata)

› Ordinary accounting (Contabilità Ordinaria)

The regime you choose depends upon the type of company and the level of turnover (volume d’affari)

5.3. Contabilità Semplificata(Simplified Accounting)

Simplified accounting (Contabilità semplificata) can be adopted by sole traders (impresa individuale) and partnerships (società di persone).To be eligible, businesses operating in the services sector (settore dei servizi) must have turnover (volume d’affari) of less than € 400,000 per annum; for those operating in other sectors (altre attività) the limit is € 700,000 per annum.If you are a soletrader (impresa individuale) or partnership (società di persone) and your turnover falls within the limits outlined above then you can automatically adopt the simplified scheme without need to communicate this to the authorities.Companies falling within the limits are free to choose to opt for the ordinary accounting regime instead if they so wish.


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5.4. Adempimenti contabili e fiscali – contabilità semplificata(Accounting and tax requirements - simplified accounting)

Under the simplified accounting scheme (regime contabilità semplificata), businesses are required to keep the following books and records.

5.4.1. Registro IVA acquisti(The VAT purchase register)

In addition to recording all purchase invoices (fatture di acquisto), the VAT purchase register (registro IVA acquisti) must detail all costs (costi) that are not subject to VAT such as:

› wages, salaries and social security contributions (salari, stipendi e contributi sociali)

› insurance (assicurazioni)

› postage and revenue stamps (spese postali e valori bollati)

› taxes and duties (imposte e tasse)

› interest charges from banks (interessi passivi bancari)

It should also include details of adjustment entries (scritture di rettifica), such as accruals (ratei), prepayments (risconti), invoices to be issued and received (fatture da emettere e da ricevere) etc.If no fixed asset register (registro dei beni ammortizzabili) is kept then details of any fixed asset additions should also be recorded in the VAT purchase register.

5.4.2. Registro IVA vendite(The VAT sales register)

In addition to recording all sales invoices (fatture di vendita), the VAT sales register (registro IVA vendite) must detail all revenues (ricavi) that are not subject to VAT, such as:

› bank interest income (interessi attivi bancari)

› capital gains (plusvalenze)


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› other income (altri proventi) falling outside the scope of VAT (non soggetti ad IVA)

5.4.3. Registro corrispettivi(The register of daily takings)

If your company operates as a retailer (commercio al dettaglio) the receipts from sales should be recorded in the register of daily takings (registro dei corrispettivi) which replaces the VAT sales register (registro IVA vendite). It should also detail all income falling outside the scope of VAT (non soggetti ad IVA).A retailer is not required to issue an invoice (fattura), a receipt (ricevuta) or a till slip (scontrino) will suffice.

5.4.4. Registro dei beni ammortizzabili(Book of depreciable assets)

The fixed asset register (Registro dei beni ammortizzabili) records the purchase (acquisto), sale (vendita) and depreciation (ammortamento) of the fixed assets (immobilizzazioni) utilised by the company.It is not obligatory (obbligatoria) if details relating to fixed assets are entered into the VAT purchase register (registro IVA acquisti) as explained above.

5.4.5. Registri previsti per i dipendenti(Compulsory Employee registers)

If the company has employees (dipendenti), certain mandatory registers and records must be kept, such as the personnel register (libro matricola), payroll (libro paga) and accident book (libro infortuni).


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5.5. Contabilità Ordinaria (Ordinary Accounting)

Ordinary accounting (Contabilità ordinaria) must be adopted by companies with share capital (società di capitali) i.e. S.p.A., S.a.p.a. and S.r.l., and by sole traders (imprese individuali) or partnerships (società di persone) whose turnover exceeds the thresholds allowable for simplified accounting (see 5.3 above).

5.6. Adempimenti contabili e fiscali - Contabilità Ordinaria (Accounting and tax requirements – Ordinary Accounting)

Companies following the ordinary accounting scheme (regime contabilità ordinaria) are required to keep more books and records than those adopting the simplified accounting scheme (regime contabilità semplificata). The books and records which must be kept are as follows.

5.6.1. Registri Iva(VAT registers)

See 5.4.1 and 5.4.2 above

5.6.2. Registro dei beni ammortizzabili(Book of depreciable assets)

The fixed asset register (registro dei beni ammortizzabili) is not obligatory if the details of depreciable fixed assets (beni ammortizzabili) are recorded in the inventory register (libro inventari).If a register is kept, then it must include details relating to the purchase (acquisto), sale (vendita) and depreciation (ammortamento) of the fixed assets (immobilizzazioni) utilised by the company.


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5.6.3. Libro inventari(The Inventory register)

The inventory register (libro inventari) shall contain a description (descrizione) and valuation (valutazione) of the company’s assets (attività) and liabilities (passività) as reported in the balance sheet (stato patrimoniale).

5.6.4. Libro giornale(Day Book/Journal)

The day book or journal (libro giornale) records all the daily transactions relating to the business activities of the company. Accounting entries (scrittura contabile) should be made in chronological order (ordine cronologico) and include the following information:

› description (descrizione)

› entry number (numero di registrazione)

› posting date (data di registrazione)

› accounts (conti)

› amounts (importi)

› debit (dare) and credit (avere) columns

5.6.5. Libro mastro (General ledger)

Entries from the journal (libro giornale) must be transferred to the general ledger (libro mastro), itemised according to the company’s chart of accounts (piano dei conti).

5.6.6. Registri previsti per i dipendenti(Compulsory Employee registers)

See 5.4.5 above


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5.6.7. Libri sociali(Statutory Books)

Companies with share capital (società di capitale) must also keep the following statutory books (libri sociali):

› Register of shareholders’ meetings (libro delle assemblee dei soci)

› Minute book of board of directors meetings (libro del consiglio d’amministrazione)

› Minute book of board of Statutory Auditors (libro del collegio sindacale)

S.p.A.s must also keep a share register (libro dei soci) giving details of the names of the shareholders (identità degli azionisti), numbers of shares held (numero di azioni possedute) and any transfers (trasferimenti) or payments (versamenti) made and a bond register (libro delle obbligazioni) giving similar details relating to bonds if the company has issued them.Partnerships (società di persone) are not required to keep statutory books (libri sociali) although in practice it is advisable to keep a minute book of partners’ meetings (verbali assemblee dei soci).

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6. Financial Statements

Il Bilancio

Italian accounting and reporting requirements are governed by the Italian Civil Code (codice civile) and Italian Accounting Standards (principi contabili Italiani). The legislation requires a fair presentation or to give a true and fair view (rappresentazione veritiera e corretta) of a company’s financial position (situazione patrimoniale e finanziaria), and profit or loss account (conto economico).It also contains detailed guidance regarding the classification of accounts (classificazioni dei conti) and the presentation of financial statements (presentazione del bilancio) together with guidance on the accounting principles to be adopted (principi contabili da adottare).Companies should generally adopt Italian GAAP (Generally Accepted Accounting Principles) unless they are listed companies (società quotate) or banks (banche) and other financial institutions (istituzioni finanziarie) which must adopt International Accounting Standards (principi contabili internazionali).Italian GAAPs (principi contabili italiani) are based on the principles of:

› going concern (continuità delle attività)

› prudence (prudenza)

› accrual basis (competenza)

› consistency (costanza)

› substance over form (prevalenza della sostanza sulla forma)

6.1. Bilancio annuale (Annual Financial Statements)

The directors of Italian S.p.A.s and S.r.l.s must draw up the company’s annual financial statements at the year end.


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The statements (bilancio) are made up of the balance sheet (stato patrimoniale), the profit and loss account (conto economico) and the Notes (nota integrativa) together with the directors’ report (relazione sulla gestione).Special rules regarding the format of financial statements are provided for companies operating in specific sectors.An annual general meeting (assemblea generale) must be held within 120 days of the year end (chiusura dell’esercizio) to approve the financial statements (approvare il bilancio). The financial statements, together with the directors’ report (relazione sulla gestione) and the board of statutory auditors’ report (relazione del collegio sindacale), have to be filed with the Italian Business Register (Registro Imprese) within one month of approval.Abbreviated financial statements (bilancio in forma abbreviata) are permitted for smaller companies that meet certain parameters (parametri) for two consecutive years.In order to qualify, the company must not exceed (superare) two of the following limits (limiti):

› Total assets in the balance sheet (totale attivo dello stato patrimoniale) of € 4,400,000

› Revenues from sales and services (ricavi delle vendite e delle prestazioni) of € 8,800,000

› Average employees during the year (numero dei dipendenti occupati in media durante l’esercizio) of 50

Companies preparing abbreviated accounts are not required to produce a directors’ report (relazione sulla gestione).

6.2. Stato patrimoniale(The balance sheet)

Under Italian GAAPs, the balance sheet must be prepared in accordance with the following schedule (lo stato patrimoniale deve essere redatto in conformità al seguente schema):


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Attivo Assets

A) Crediti verso soci per versamenti ancora dovuti

A) Subscribed capital unpaid

B) Immobilizzazioni B) Fixed Assets

I - Immobilizzazioni immateriali I – Intangible Fixed Assets

1) costi di impianto e di ampliamento 1) start up and expansion costs

2) costi di ricerca, di sviluppo e di pubblicità 2) research, development and advertising expenditure

3) diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ ingegno

3) industrial patent rights and intellectual property rights

4) concessioni, licenze, marchi e diritti simili 4) concessions, licences, trademarks and similar rights

5) avviamento 5) goodwill

6) immobilizzazioni in corso e acconti 6) assets under construction and advances

7) altre 7) other intangible assets

II - Immobilizzazioni materiali II – Tangible Fixed Assets

1) terreni e fabbricati 1) land and buildings

2) impianti e macchinari 2) plant and machinery

3) attrezzature industriali e commerciali 3) industrial and commercial equipment

4) altri beni 4) other fixed assets

5) immobilizzazioni in corso e acconti 5) assets under construction and advances

III - Immobilizzazioni Finanziarie III – Financial Fixed Assets

1) partecipazioni in 1) investments in

2) crediti 2) receivables

3) altri titoli 3) other securities

4) azioni proprie 4) own shares

C) Attivo circolante C) Current Assets

I - Rimanenze I – Inventory

1) materie prime, sussidiarie e di consumo 1) raw, ancillary and consumable materials

2) prodotti in corso di lavorazione e semilavorati

2) work in progress and semi-finished products

3) lavori in corso su ordinazione 3) contract work in progress

4) prodotti finiti e merci 4) finished products and goods for sale

5) acconti 5) advances


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II - Crediti II – Receivables

1) verso clienti 1) from customers

2) verso imprese controllate 2) from subsidiaries

3) verso imprese collegate 3) from associates

4) verso controllanti 4) from parent companies

4-bis) crediti tributari 4-2) tax credits

4-ter) imposte anticipate 4-3) tax advances

5) verso altri 5) from others

III - Attività finanziarie che non costituiscono immobilizzazioni

III – Finascial assets not held as fixed assets

1) partecipazioni in imprese controllate 1) investments in subsidiaries

2) partecipazioni in imprese collegate 2) investments in associates

3) partecipazioni in imprese controllanti 3) investments in parent companies

4) altre partecipazioni 4) other investments

5) azioni proprie 5) own shares

6) altri titoli 6) other securities

IV - Disponibilità liquide IV - Liquid assets

1) depositi bancari e postali 1) bank and post office deposits

2) assegni 2) cheques

3) danaro e valori in cassa 3) cash and cash equivalents

D) Ratei e risconti D) Accrued and prepaid expenses

Passivo Liabilities

A) Patrimonio netto A) Shareholders’ equity

I - Capitale I - Capital

II - Riserva da soprapprezzo delle azioni II - Share premium reserve

III - Riserve di rivalutazione III - Revaluation reserve

IV - Riserva legale IV – Legal reserve

V - Riserve statutarie V – Statutory reserves

VI - Riserva per azioni proprie in portafoglio VI – Treasury share reserve

VII - Altre riserve, distintamente indicate VII – Other reserves

VIII - Utili (perdite) portati a nuovo VIII – Profit (loss) brought forward

IX - Utile (perdita) dell’esercizio IX – Profit (loss) for the year


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B) Fondi per rischi e oneri B) Provisions for liabilities and charges

1) per trattamento di quiescenza e obblighi simili

1) for pensions and similar obligations

2) per imposte, anche differite 2) for taxes, including deferred taxes

3) altri 3) other provisions

C) Trattamento di fine rapporto di lavoro subordinato

C) Employee severance indemnity fund

D) Debiti D) Payables

1) obbligazioni 1) bonds

2) obbligazioni convertibili 2) convertible bonds

3) debiti verso soci per finanziamenti 3) due to members for funding

4) debiti verso banche 4) borrowings from banks

5) debiti verso altri finanziatori 5) due to other financing sources

6) acconti 6) advances

7) debiti verso fornitori 7) due to suppliers

8) debiti rappresentati da titoli di credito 8) notes payable

9) debiti verso imprese controllate 9) due to subsidiaries

10) debiti verso imprese collegate 10) due to associates

11) debiti verso controllanti 11) due to parent companies

12) debiti tributari 12) tax payable

13) debiti verso istituti di previdenza e di sicurezza sociale

13) Amounts due to social security institutions

14) altri debiti 14) other payables

E) Ratei e risconti E) Accrued expences and unearned income

6.3. Conto economico(Profit and loss account)

Under Italian GAAP, the profit and loss account must be prepared in accordance with the following schedule (il conto economico deve essere redatto in conformità al seguente schema):


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A) Valore della produzione A) Value of production

1) ricavi delle vendite e delle prestazioni 1) revenues from sales and services

2) variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti

2) changes to work in progress, semi-finished and finished goods

3) variazioni dei lavori in corso su ordinazione

3) changes in contracts construction in progress

4) incrementi di immobilizzazioni per lavori interni

4) additions to internally produced fixed assets

5) altri ricavi e proventi 5) other income and revenues

B) Costi della produzione B) Cost of production

6) per materie prime, sussidiarie, di consumo e di merci

6) raw, ancillary and consumable materials and goods for resale

7) per servizi 7) services

8) per godimento di beni di terzi 8) leases and rentals

9) per il personale 9) personnel costs

a) salari e stipendi a) wages and salaries

b) oneri sociali b) social security contributions

c) trattamento di fine rapporto c) severance pay

d) trattamento di quiescenza e simili d) pensions and similar obligations

e) altri costi e) other costs

10) ammortamenti e svalutazioni 10) amortisation, depreciation and write downs

a) ammortamento delle immobilizzazioni immateriali

a) amortisation of intangible fixed assets

b) ammortamento delle immobilizzazioni materiali

b) depreciation of tangible fixed assets

c) altre svalutazioni delle immobilizzazioni c) write downs of fixed assets

d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponibilità liquide

d) write downs of receivables included in current assets and liquid assets

11) variazioni delle rimanenze di materie prime, sussidiarie, di consumo e merci

11) changes to inventories of raw, ancillary and consumable materials and goods for resale

12) accantonamenti per rischi 12) provisions for risks

13) altri accantonamenti 13) other provisions


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14) oneri diversi di gestione 14) sundry operating expenses

C) Proventi e oneri finanziari C) Revenues and expenses

15) proventi da partecipazioni 15) income from equity investments

16) altri proventi finanziari 16) other financial income

a) da crediti iscritti nelle immobilizzazioni a) from receivables held as fixed assets

b) da titoli iscritti nelle immobilizzazioni che non costituiscono partecipazioni

b) from securities held as fixed assets other than equity investments

c) da titoli iscritti nell’attivo circolante che non costituiscono partecipazioni

c) from securities included as current assets other than equity investments

d) proventi diversi dai precedenti d) other income

17) interessi e altri oneri finanziari 17) interest and other financial expense

D) Rettifiche di valore di attività finanziarie D) Financial asset value adjustment

18) rivalutazioni 18) revaluations of

a) di partecipazioni a) equity investments

b) di immobilizzazioni finanziarie che non costituiscono partecipazioni

b) financial fixed assets other than equity investments

c) di titoli iscritti all’attivo circolante che non costituiscono partecipazioni

c) securities included as current assets other than equity investments

19) svalutazioni 19) write downs of

a) di partecipazioni a) equity investments

b) di immobilizzazioni finanziarie che non costituiscono partecipazioni

b) financial fixed assets other than equity investments

c) di titoli iscritti nell’attivo circolante che non costituiscono partecipazioni

c) securities included as current assets other than equity investments

E) Proventi e oneri straordinari E) Non-operating revenues and expenses

20) proventi 20) revenues

21) oneri 21) expenses

22) imposte sul reddito dell’esercizio, correnti, differite e anticipate

22) Income tax for the year, current, deferred and paid in advance

23) utile (perdite) dell’esercizio 23) Profit (loss) for the year


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6.4. Nota integrativa (Notes)

The Notes (nota integrativa) provide further, more detailed, quantitative and descriptive information (ulteriori informazioni quantitative e descrittive).They include extra information in relation to things such as:

› The criteria applied in the valuation of the items in the financial statements (criteri applicati nella valutazione delle voci di bilancio)

› Changes in assets and liabilities (variazioni intervenute nelle voci dell’attivo e del passivo)

› A list of equity investments (elenco delle partecipazioni)

› Payables falling due in more than five years (debiti di durata residua superiore a cinque anni)

› Financial charges attributable to amounts included in assets (oneri finanziari imputati nell’esercizio a voci dell’attivo)

› Revenues from investments, other than dividends (proventi da partecipazioni, diversi dai dividendi)

› Details of the number (numero) and attributable rights (diritti) of any profit shares (azioni di godimento), convertible bonds (obbligazioni convertibili in azioni) and securities (titoli) issued by the company (emessi dalla società).

6.5. Relazione sulla gestione(The directors’ report)

The directors’ report includes commentary on items such as:

› research and development (attività di ricerca e di sviluppo)

› relationships with subsidiaries, associates and parent companies (rapporti con imprese controllate, collegate e controllanti)

› the number and nominal value of treasury shares and of shares held by parent companies (numero e valore nominale delle azioni proprie e delle azioni di società controllanti) together with details of the corresponding capital amount (parte di capitale corrispondente)


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› the number and nominal value of shares purchased or sold during the year (numero e valore nominale delle azioni acquistate o alienate nel corso dell’esercizio) together with details of the corresponding capital amount (parte di capitale corrispondente), of the consideration (corrispettivi) and the reasons for the purchases and sales (motivi degli acquisti e delle alienazioni)

› significant post balance sheet events (fatti di rilievo avvenuti dopo la chiusura dell’esercizio)

› the business outlook (evoluzione prevedibile della gestione)Company policy on finance risk management (politiche della società in materia di gestione del rischio finanziario)The company’s exposure (l’esposizione della società) to price risk (rischio di prezzo), credit risk (rischio di credito), liquidity risk (rischio di liquidità) and risk of changes in cash flows (rischio di variazione dei flussi finanziari).

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7. Business Taxation

Tassazione delle Imprese

Companies (società di capitale) resident in Italy (residenti nel territorio dello Stato) are subject to corporate income tax Imposta sul Reddito delle Società (IRES) on income from any source, whether produced in Italy or abroad, that is on a “world-wide basis” (principio della tassazione mondiale).Non-resident companies (non residenti nel territorio dello Stato) are subject to IRES only on income earned in Italy. IRES is charged on the net of revenues (ricavi) less allowable business costs (costi deducibili).Both resident and non-resident companies are subject to a regional tax on productive activities Imposta Regionale Attività Produttive (IRAP) on income earned in Italy.A company is resident in Italy for tax purposes (fiscalmente residente in Italia) when for most of the tax period it has its registered office (sede legale) in Italy or it has its place of effective management (sede dell’amministrazione) or main business activity (oggetto principale) in Italy.A company with a local representative office (ufficio di rappresentanza) in Italy which is used solely for conducting preliminary research and information gathering activities (ricerche di mercato) and other non-business operations such as the storage, delivery and display of goods (stoccaggio, esposizione o consegna di beni) belonging to the foreign company (società estera) is not considered a permanent establishment from a tax point of view (non costituisca un’organizzazione stabile ai fini fiscali).A branch (sede secondaria) of a foreign company (società estera) is, however, considered to be a permanent establishment (organizzazione stabile) in Italy and as such its income for tax purposes is determined as if it were a company domiciled in Italy.For the taxation of individuals with partnerships (società di persone) and sole traders (imprese individuali) see chapter 12.


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7.1. Imposta sul Reddito delle Società (IRES)(Corporate income tax)

7.1.1. Base imponibile(Tax base)

The current tax rate (aliquota dell’ imposta) for IRES is 27.5% which is applied to taxable income which is the total net income (reddito complessivo netto) of the company as shown in the financial statements (bilancio) as adjusted in accordance with tax law.

7.1.2. Aiuto alla Crescita Economica(Support for Economic growth)

Italian companies and Italian branches (sede secondarie) of non-resident companies are entitled to a corporate income tax deduction (deduzione) which is calculated as a percentage of the annual increase in net equity (incremento del patrimonio netto dell’ impresa).For the current year the applicable rate is 4.5%. The rate will be set every year by ministerial decree (decreto ministeriale).

7.1.3. Costi deducibili(Deductible costs)

Business expenses (spese aziendali) relating to activities necessary for the production of income may be deducted and, generally, all costs related to running the business are deductible in whole or in part for tax purposes (deducibili o parzialmente deducibili), including:

› Costs incurred in setting up the business (costi dell’avviamento di un’ impresa)

› Interest (interessi) (subject to certain exceptions)

› Royalties (diritti) paid for intellectual property (proprietà intellettuale) such as patents (brevetti) and trademarks (marchi)


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› Remuneration paid to members of the managing and supervisory boards (compensi corrisposti ai componenti degli organi di amministrazione e di controllo)

› Loss on receivables (perdite su crediti) and provisions made for doubtful accounts (accantonamenti per rischi su crediti) (subject to certain exceptions)

› Advertising and entertainment expenses (spese di pubblicità e rappresentanza) (subject to certain exceptions)

› Pension plan contributions (contributi per la previdenza)

› Commissions (commissioni)

7.1.4. Interessi passivi(Interest expenses)

Generally speaking, interest expense (interessi passivi) is deductible for tax purposes. Any interest expense that exceeds interest income (interessi attivi) in the tax period (periodo d’ imposta) may be deducted up to an amount of 30% of EBITDA including the cost of finance leases (canoni di locazione finanziaria). Any remaining amounts can be carried forward (riportati in avanti) indefinitely to offset against (compensato con) available EBITDA in subsequent years.

7.1.5. Ammortamenti(Depreciation)

The rate of depreciation (tasso di ammortamento) at which assets may be depreciated is set by ministerial decree and varies depending upon the industry.Land (terreni) cannot be depreciated.Patents (brevetti) and know-how can be amortised (ammortizzati) at a rate of 50%. Goodwill (avviamento) and trademarks (marchi) may be amortised over a period of 18 years.


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7.1.6. Ricerca e sviluppo(Research and development)

Research and development expenditures (costi di ricerca e sviluppo) may be deducted in full in the first year (interamente nell’esercizio in cui sono stati sostenuti) or in equal instalments (quote costanti) over a period not exceeding 5 years.

7.1.7. Rimanenze(Inventory)

The valuation of inventory (valutazione dell’ inventario) is left up to the taxpayer, provided the value is not lower than the value determined according to tax law (valore stabilita dalla legge).The minimum value for tax purposes (il valore minimo a fini fiscali) is the lower of the historical cost (costo storico) and market value (valore di mercato).

7.1.8. Perdite fiscali(Tax losses)

Tax losses (perdite fiscali) can be carried forward (riportati in avanti) to reduce future taxable income (futuri redditi imponibili) for an amount not exceeding 80% of the taxable income (non superiori al 80 per cento del reddito imponibile). Losses arising in the first three years of activity can be offset with 100% of taxable income.In Italy losses may not be carried back to earlier periods (riportati a esercizi precedenti).

7.1.9. Plusvalenze (Capital gains)

Capital gains (plusvalenze) realised by the company are generally taxable as normal business income at 27.5%, and capital losses (minusvalenze) are generally deductible.


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7.2. Imposta Regionale Attività Produttive (IRAP)(regional tax on productive activities)

IRAP is paid by sole traders (imprese individuali) and partnerships (società di persone) as well as by companies (società di capitale).

7.2.1. Base imponibile (Taxable Income)

The current ordinary tax rate (aliquota dell’ imposta) for IRAP is 3.9% although, since it is a regional tax (imposta regionale), each region has the power to increase or decrease this rate to some extent.IRAP is levied on the net value of production (valore netto della produzione) which is made up of the value of production less certain costs of production. This generally means revenue from sales and services (ricavi delle vendite e delle prestazioni) less production costs (costi di produzione) with certain exceptions including payroll costs (costo del lavoro), provisions for risks (accantonamenti su rischi) and amortisation, depreciation and write-downs (ammortamenti e svalutazioni).IRAP is deductible for IRES purposes (deducibile ai fini Ires) limited to the following amounts:

› 10% of the tax paid in the year if financing costs (oneri finanziari) contributed to the formation of the IRAP tax base (base imponibile Irap)

› 100% of the tax paid in relation to labour costs (costo del lavoro)

7.3. Sgravio della doppia imposizione (Double taxation relief)

Italy has entered into double taxation agreements (accordi di doppia imposizione) with many countries most of which follow the OECD model treaty (modello di convenzione dell’OCSE).Foreign taxes (imposte estere) can generally be credited against the Italian IRES liability, providing there is reciprocity with the other country. Any excess


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of foreign tax credits (crediti per le imposte pagate all’estero) can be carried forward or carried back (possono essere riportati a esercizi precedenti o futuri).

7.4. Dichiarazione dei redditi e pagamento(Income tax return and payment)

During the course of each year, taxpayers (contribuenti) are required to comply with a series of obligations (adempimenti) that have various deadlines (scadenze).In relation to IRES and IRAP, a company must file an annual corporate income tax return (dichiarazione dei redditi) electronically within 9 months of the end of its financial year.Two advance payments (due rate) of corporate income tax are also required. These are generally due in June (giugno) and November (novembre) and are calculated based on the amount of tax that was paid the previous year. The first instalment (primo acconto) is 40% of that amount and the second 60%. A balancing payment (saldo) for any remaining tax due is paid together with the first payment on account for the following year (anno successivo).Companies may opt to delay payment for a month subject to a small interest charge (interesse corrispettivo).Tax payers (contribuenti) may also choose to spread out (rateizzare) the amounts due (versamenti dovuti) for the balancing payment (saldo) and first payment on account (primo acconto) over a maximum of 6 instalments (rate).

7.5. Studi di settore(Sector studies)

The Italian tax authorities use the so-called sector studies (studi di settore) to build up a picture of expected normal revenues or fees (ricavi o compensi) for different types of tax payer (contribuente).These estimates of revenues or fees are made on the basis of specific characteristics such as the relevant economic sector (settore economico di appartenenza), the production processes used (processi produttivi utilizzati),


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the type of organisation (organizzazione), the products and services offered by the activity (prodotti e servizi oggetto dell’attività), the geographical location (localizzazione geografica) and other important elements such as sales territory (area di vendita), market demand (andamento della domanda), price levels (livello dei prezzi), competition (concorrenza) etc.Sector studies can be used by a taxpayer to check (verificare) their position is in line with expected levels (posizionamento rispetto alla congruità).

7.6. Consolidato fiscale(Corporate Income tax consolidation)

Companies that are part of the same group (appartengono a uno stesso gruppo) can consolidate their taxable income into a single taxable income for the group (un unico reddito imponibile per l’ intero gruppo). Companies that produce a taxable profit (reddito imponibile) can offset this against companies that produce a taxable loss (perdita fiscale).The consolidation procedure must be applied for three consecutive years (l’adesione al regime consolidato è irrevocabile per tre esercizi sociali) and can be adopted by companies that control subsidiaries.

7.7. Prezzi di trasferimento(Transfer pricing)

Italy’s regulations governing transactions with related parties (parti correlate) are in line with the OECD Transfer Pricing Guidelines (direttive OCSE sui prezzi di trasferimento).The regulations apply to transactions between companies when:

› foreign companies (società non residenti) control an Italian enterprise (controllano l’ impresa italiana)

› foreign companies are controlled by an Italian enterprise (sono controllate dall’ impresa italiana)


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› foreign companies and Italian enterprises are controlled by the same parent company (sono controllate dalla stessa controllante dell’ impresa italiana)

The legislation defines foreign companies (società non residente) as all kinds of business entity legally recognized in the foreign country.Italian companies are defined as companies with share capital (società di capitali), partnerships (società di persone), sole traders (imprese individuali) and permanent establishments of foreign companies set up in Italy (stabili organizzazioni in Italia di società estere).Under the legislation, inter-company transactions (transazioni infragruppo) must be performed in accordance with the arm’s length principle (principio di libera concorrenza) as also recommended by the OECD guidelines.The arm’s length value is the normal price (valore normale) paid for goods or services (beni o servizi) of the same or similar type by independent entities (imprese indipendenti) in a free market (libero mercato).There is no legal obligation (non esistae obbligo giuridico) in terms of the documentation (documentazione) required in relation to transfer pricing policy (politica dei prezzi di trasferimento) but it is nevertheless advisable to ensure that documentation exists that can prove the transfer pricing method adopted (metodo utilizzato per la determinazione dei prezzi di trasferimento).It is also possible to avoid transfer pricing issues by using one of the means provided for by the tax authorities such as advanced pricing agreements (accordi preventivi sui prezzi di trasferimento) or International standard ruling (ruling di standard internazionale).

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8. Withholding Taxes

Ritenute d’ imposta

Italy has entered into over 90 double taxation agreements (accordi sulla doppia tassazione) with foreign states to avoid double taxation (doppia imposizione) on income. Benefits under an agreement can generally be obtained only if the foreign entity is a qualified resident of one of the treaty countries (paesi contraenti).Most agreements provide for a reduction in the normal Italian withholding rates (riduzione dell’aliquota della ritenuta alla fonte normalmente applicata in italia) on dividends (dividendi), interest (interessi) and royalties (canoni) received by an entity resident in a treaty country.The rates of withholding taxes (ritenute d’ imposta) applied differ according to income type (categoria di reddito) and the subjects involved. The following are the most important.

8.1. Dividendi(Dividends)

Unless dividends (dividendi) are exempt under the EU Parent-subsidiary directive (direttiva sulle società madri e figlie) or the rate is reduced under a tax treaty (convenzione contro doppie imposizioni), dividends paid by an Italian company to a non-resident company are generally subject to a withholding tax of 26% (soggetti ad una ritenuta alla fonte del 26%).A partial refund (rimborso parziale) may be claimed by a non-resident recipient who can provide documented evidence (prove documentate) from their local tax authorities (autorità fiscali locali) that tax has been paid (le tasse sono state pagate) in their jurisdiction (giurisdizione). The Italian tax authorities will then refund this tax by up to 11/26 of the Italian withholding tax.This rate is reduced to 1.375% if the beneficial owner of the dividends (beneficiario effettivo dei dividendi) is a company resident and subject to corporation tax (soggetta ad imposta sulle società) in a state within the


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European Economic Area (EEA) (Spazio economico europeo (SEE)) that allows an adequate exchange of information with the Italian tax authorities (adeguato scambio di informazioni con l’Amministrazione finanziaria italiana).Under the EU directive no withholding tax (ritenuta d’ imposta) is applicable if the dividends are paid to a qualifying EU corporate shareholder that has had a direct holding (partecipazione diretta) of no less than 10% in the subsidiary for at least one year.

8.2. Interessi(Interest)

Similarly, Italian sourced interest (interessi) paid to a non-resident company is generally subject to a withholding tax of 26% (soggetti ad una ritenuta alla fonte del 26%) unless there is a tax treaty (convenzione contro doppie imposizioni) in force.A lower rate of 12.5% applies to interest from bonds issued by the government (titoli pubblici italiani)Under the EU interest and royalties directive (direttiva comunitaria sugli interessi e sui canoni), qualifying interest payments made to associated companies resident in the EU are exempt from withholding tax (ritenuta d’ imposta).

8.3. Canoni(Royalties)

Royalties (canoni) paid by an Italian company to a non-resident company are generally subject to a withholding tax of 30% (soggetti ad una ritenuta alla fonte del 30%) applied to (applicata a) 75% of the gross payment which results in an effective rate of 22.5% (un’aliquota effettiva pari a 22.5). This rate may be reduced in the event of a tax treaty (convenzione contro doppie imposizioni) being in force or the payment may even be exempt under the EU interest and royalties directive (direttiva comunitaria sugli interessi e sui canoni).

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Licensing fees (canoni di licenza) and some service fees (canoni di assistenza) are taxed as royalties but management fees (spese di gestione) are exempt from withholding taxes (esenti dall’ imposta).

8.4. Salari e oneri sociali(Wages and social security)

Unless covered by a tax treaty (convenzione contro doppie imposizioni), wages (salari) paid by an Italian company are subject to withholding tax (soggetti ad una ritenuta alla fonte) which varies in accordance with the progressive income tax rates on personal income (aliquote di imposta sul reddito progressivo).The company must provide employees with an annual statement showing how much income tax has been deducted at source (ritenuta alla fonte) during the year. This information must also be submitted to the Italian Revenue Agency (Agenzia delle Entrate).Italian sourced income is also subject to social security contributions (contributi previdenziali). Social security contributions are paid by both the employer (datore di lavoro) (between 28% and 30%) and the employee (dipendente) (around 9%). The amount payable by the employee is deducted at source (ritenuta alla fonte) by the employer.

8.5. Altre imposte(Other taxes)

Unless reduced by a tax treaty (convenzione contro doppie imposizioni), a 30% withholding tax (ritenuta d’ imposta) is applied to payments made to a non-resident company for the use of industrial, commercial or scientific equipment (l’uso di attrezzature industriali, commerciali o scientifiche) located in Italy.Part (49.72%) of capital gains (plusvalenze) on the sale of a qualifying shareholding (partecipazione qualificata) (i.e. shareholdings representing more than 2% of the voting rights (diritti di voto) or 5% of the equity (patrimonio netto) of a listed company (società quotata), or more than 20% of the voting


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rights or 25% of the equity of an unlisted company (società non-quotata) are taxed at 27.5% for a non-resident company. Capital gains (plusvalenze) realised on the sale of a nonqualified shareholding (partecipazione non qualificata) are taxed at 26%.Under Italian legislation, capital gains realised on the following transactions are not taxable:

› the sale of a nonqualified shareholding (partecipazione non qualificata) by a non-resident shareholder (socio non residente) resident in a so called ‘white list’ country

› the sale by a non-resident shareholder of a nonqualified shareholding (partecipazione non qualificata) held in a listed company (società quotata)

Captial gains (plusvalenze) may be reduced or eliminated under the terms of an applicable tax treaty (convenzione contro doppie imposizioni).

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9. VAT

IVA

VAT (IVA) is an indirect tax (imposta indiretta) with various rates (aliquote), levied on the sale of goods and services (cessione di beni e servizi) by taxable persons (soggetti passivi), deemed to take place in Italy. IVA is also due on all imports.As a member of the EU, the Italian VAT system is based on an EU directive and therefore follows common principles of the EU VAT system (Regime comunitario dell’IVA).

9.1. Aliquote (Rates)

For the calculation of VAT (IVA), the tax base (base imponibile) i.e. the price (prezzo) of the goods or services is multiplied by the VAT rate (aliquota IVA).The standard rate (aliquota ordinaria) of IVA is 22%.There is a reduced rate (aliquota ridotta) of 10% for some goods and services, including:

› certain foods (determinati prodotti alimentari)

› tourist services (servizi turistici) such as hotels (alberghi), bars (bar), restaurants (ristoranti) and other tourist products (prodotti turistici)

› certain building development (operazioni di recupero edilizio)

In addition there is a minimum rate (aliquota minima) of 4% which is applied to sales of essential items (vendite di generi di prima necessità) such as certain basic foodstuff (alimentari), and newspapers (stampa quotidiana).Exports and European Union supplies are zero rated (non imponibili).Italian VAT Law (normativa IVA) exempts certain transactions, which differs from zero-rated transactions. That is because the input VAT (IVA a debito) on costs associated with exempt transactions (operazioni esenti) is not deductible. The most important supplies which are exempt (without credit for input VAT) are:


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› Healthcare (prestazioni sanitarie)

› Urban transport (trasporti urbani)

› Credit transactions (operazioni creditizie) and financial and insurance services (servizi finanziari e assicurativi)

› Activities related to shares and securities (operazioni su azioni e titoli)

9.2. Detrazione, esigibilità e rivalsa(Deduction, chargeability and reimbursement)

Three important concepts to consider in relation to IVA are deduction (detrazione), chargeability (esigibilità) and reimbursement (rivalsa).Deduction (detrazione) is the right (diritto) which allows the subtraction (sottrazione) of total VAT on purchases (IVA sugli acquisti) from the total VAT on sales (IVA sulle vendite). VAT on purchases is a credit (credito) for your business and VAT on sales a debt (debito) owed to the tax authorities.The concept of chargeability (esigibilità) relates to the time (momento) when a transaction is deemed to have occured thus giving rise to obligations in relation to VAT. (adempimenti ai fini dell’IVA). The term rivalsa refers to the obligation (obbligo) and right (diritto) of a company to add VAT (aggiungere IVA) to the sales price of a product or services.

9.3. Apertura partita IVA(VAT Registration)

Anyone making taxable supplies in Italy must register for VAT with the Italian Revenue Agency (Agenzia delle Entrate). This can be done as part of the single notification (comunicazione unica) sent to The Italian Business Register (Registro Imprese) at the time of setting up the company.The tax office will issue a VAT number (partita IVA) which must appear on all documents relating to VAT.

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9.4. Rappresentante fiscale (Tax representative)Foreign operators without a permanent establishment (stabile organizzazione) in Italy may instead appoint a tax representative (rappresentante fiscale), resident in Italy, who will be responsible for fulfilling all requirements necessary in relation to Italian VAT (gli obblighi previsti dalla normativa IVA).As an alternative to appointing a tax representative, non-resident EU companies can apply for direct VAT identification (identificazione diretta ai fini IVA di soggetto non residente) and deal with the VAT requirements relating to taxable transactions in Italy themselves (procedere direttamente ad assolvere gli adempimenti IVA connessi alle operazioni effettuate in Italia).

9.5. Meccanismo di inversione contabile(Reverse charge)

For goods supplied and services rendered (cessioni di beni e prestazioni di servizi) directly from abroad (dall’estero), the transaction is taxable in Italy through the reverse charge (meccanismo di inversione contabile). Under this system, the person supplying goods or services (cedente or prestatore) issues an invoice without charging tax (emette una fattura senza addebitare l’ imposta) and indicates on the invoice that the reverse charge has been applied (indica l’applicazione del regime dell’ inversione contabile).The recipient (destinatario) is required to account for the VAT and record the transaction in both the VAT sales register (registro IVA vendite) and the VAT purchases register (registro IVA acquisti).If the company is able to recover all of its VAT then the reverse charge has no cost effect and is simply a matter of tax compliance.


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9.6. IVA di gruppo(Vat grouping)

Under certain conditions companies belonging to the same group are able to opt for VAT grouping (IVA di gruppo) which enables them to pool their VAT and offset VAT credits and debits of the various companies (compensare crediti e debiti d’ imposta tra le diverse società).

9.7. Operazioni transfrontaliere(Crossborder transactions)

9.7.1. Esportazioni di beni(Export of goods)

If a company sells goods to a VAT registered customer in another EU member state (in un altro paese dell’UE) then it does not need to charge VAT (applicare IVA) on the sale and can zero-rate the goods as an intra-EU supply (cessione intracomunitaria).It must, however, obtain the customer’s VAT number (partita IVA dell’acquirente/destinatario) and include it on the invoice (fattura). It should also obtain evidence that the goods have been sent out of Italy (prova che i beni hanno lasciato il territorio dello Stato).If a company exports goods to a customer outside the EU (fuori dell’Unione europea) then it does not need to charge VAT but should always make sure to retain proof of dispatch to support the zero rating.

9.7.2. Prestazione di servizi(Rendering of services)

Services supplied (prestazione di servizi) to business customers (clienti commerciali) in other EU countries (altri paesi dell’UE) or outside the EU (fuori dell’Unione europea) are outside the scope of Italian VAT (non rientrano nel campo di applicazione dell’IVA) unless they fall into certain categories for

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example transport (trasporto) or catering services (servizi di catering) physically carried out in Italy (materialmente eseguita in Italia)..Services to non-business customers (clienti privati) are generally taxed in Italy if the supplier is established in Italy.

9.7.3. Importazione di beni(Import of goods)

When goods are imported into Italy from outside the EU (fuori dell’Unione europea), import VAT (IVA all’ importazione) and customs duty (dazio doganale) may be due. These have to be paid before the goods are released (prima dello svincolo delle merci) from customs control (controllo doganale).

9.8. Fatture IVA(VAT Invoices)

VAT invoices (fatture IVA) need to contain the following data:

› issue date (data di emissione)

› a unique sequential invoice number (numero progressivo)

› supplier’s VAT number (partita IVA del fornitore)

› customer’s VAT number (partita IVA dell’acquirente/destinatario)

› the name (nome), address (indirizzo) and VAT number (partita IVA) of the tax representative (rappresentante fiscale) if applicable

› supplier’s name and address (nome e indirizzo del fornitore)

› customer’s name and address (nome e indirizzo dell’acquirente/ destinatario)

› description of the goods or services provided (descrizione dei beni o servizi)

› the unit price excluding VAT (prezzo unitario IVA esclusa)

› the applicable VAT rate (aliquota IVA)

› the amount of VAT payable (IVA da pagare)

› the total amount of the invoice (importo totale della fattura)


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9.8.1. Fatturazione elettronica(E-invoicing)

The law has recently changed to require suppliers of goods and services to Italian public authorities (fornitori di beni e servizi alla Pubblica Amministrazione) to use a new electronic system to submit their invoices.

9.9. Comunicazioni paesi Black list(Blacklist reporting)

Companies with Italian VAT registrations (soggetti passivi IVA) are required to complete an analysis of any transactions of a total annual amount of more than € 10,000 (operazioni di importo complessivo annuale superiore a dieci mila euro) with companies based on a ‘blacklist’ of trading nations. This is an online filing requirement, with declarations made to the Italian Revenue Agency (Agenzia delle Entrate).

9.10. Spesometro(Communication of sales and purchases)

Together with the Black list Report, Italian VAT registered companies (soggetti passivi IVA) must also send an annual return known as the Spesometro, which details all sales and purchases of goods and services rendered and received (cessioni ed acquisti di beni e prestazioni di servizi rese e ricevute) within the scope of Italian VAT (rilevanti ai fini IVA).The Spesometro is aimed at establishing a database to check taxpayers’ spending against their declared income with the aim of combatting and preventing fraudulent behaviour (per il contrasto e la prevenzione dei comportamenti fraudolenti).

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9.11. Dichiarazione e pagamento(Filing and payment)

An annual VAT declaration (comunicazione dati IVA) must be submitted electronically to the Italian tax authorities by the end of February and a VAT return must be submitted electronically by the end of September.Generally, payment of VAT is due on a monthly basis (con periodicità mensile) but there are exceptions which allow quarterly settlement (liquidazione trimestrale).

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10. IUC Combined Municipal Tax

IUC (Imposta Unica Comunale)

The Imposta Unica Comunale is a local tax (tributo locale) collected by the municipalities and payable in relation to the ownership (possesso) or occupation (occupazione) of property (immobili). IUC, also referred to as the ‘service tax’, is actually made up of three separate taxes:

› IMU (Imposta municipale unica) a property tax

› TASI (Tassa sui servizi indivisibili) a tax on general local services

› TARI (Tassa sui rifiuti) tax on local waste and environmental services

Let’s examine each of the components in more detail.

10.1. IMU Imposta municipale unica(Property tax)

IMU is payable by the owners (proprietari) of property, including commercial and industrial property, or by the holders of rights in rem (titolari di diritto reale) to the usufruct (usufrutto) of the property.All property in Italy is given a cadastral value (valore catastale) which serves as an assessment basis for property tax and for other types of taxes that are incurred when buying or selling property.Property that is the main, habitual residence (prima casa) is exempt, with the exception of properties with a cadastral category of A/1 (abitazioni di tipo signorile) (luxury property), A/8 (abitazioni di ville) (villas) or A/9 (castelli e palazzi storico/artistici) (castles and historical buildings) which are not exempt from IMU. This tax is levied on the valore catastale or taxable value of the property at a rate that is set each year by the local authority. The basic rate applied to main residences is 0.4%. but local authorities may set the rate anywhere between 0.2% and 0.6%.The basic rate for all other property 0.76%. (with an available range of 0.4 – 1.06%).

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10.2. TASI (Tassa sui servizi indivisibili)(Tax on general local services)

TASI is the tax that covers general local services provided by local authorities (comuni) such as lighting (illuminazione), road maintenance (sicurezza stradale) and management of public systems and networks (gestione degli impianti e delle reti pubbliche).The tax is payable on all property and associated outbuildings (immobili con le relative pertinenze), for example garages (box).The amount payable is calculated based on the taxable value valore catastale like for IMU.The basic rate for TASI is 0.1% but local authorities may set the rate anywhere from 0% to 0.33%.Tenants (inquilini) of property are required to pay part of the amount due for TASI. This varies from 10-30% depending on the local authority (comune).

10.3. TARI (Tassa sui rifiuti)(Tax on waste)

TARI is a tax payable by individuals, enterprises and companies (cittadini, enti ed aziende) who own premises or areas that may produce waste (locali ed aree suscettibili di produrre rifiuti). It is collected to cover the cost of waste collection and disposal (servizio di raccolta e smaltimento dei rifiuti).The amount payable is calculated based on the floor space (superficie calpestabile) of the property as recorded in the local land registry (catasto urbano).

10.4. Dichiarazione IUC(IUC Declaration)

The IUC declaration (dichiarazione IUC) must be made by the tax payer (soggetto passivo) by 30 June of the following year (entro il 30 giugno dell’anno successivo).

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11. Other indirect taxes

Altre Imposte Indirette

11.1. Imposta di registro(Registration tax)

Registration tax (imposta di registro) is a transfer tax applicable to certain transactions in Italy. It is a tax applied to deeds (atti), including contracts (contratti), that are either executed in Italy or drawn up abroad but relate to the transfer (trasferimento) of things such as land and buildings (terreni e fabbricati), intangible assets (immobilizzazioni immateriali) or businesses (aziende) located in Italy and which by their nature must be registered with a public register (registro pubblico). The lease or rent (locazione o affitto) of such assets must also be registered.The tax is also applied to documents that are registered by voluntary registration (registrazione volontaria) by anyone with an interest in doing so. Registration ensures that the content of the deed cannot be altered or modified (non può essere modificato o alterato).Depending on the nature of the deed (atto), the transfer is subject to registration tax (imposta di registro) either at a fixed rate (misura fissa) of minimum € 200 or at a proportional value (misura proporzionale) of the transaction. The proportional rate varies from 0.5% to 12% and depends on the type of transaction, for example:

› registration of the purchase of a main residence (acquisto della residenza principale) – 2%

› registration of the purchase of buildings (acquisto di beni immobili) other than main residence – 9%

› registration of the purchase of land (acquisto di terreni) – 12%


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The tax base (base imponibile) is calculated on the value of the property-related services connected to the deed or contract (valore delle prestazioni di tipo patrimoniale che riguardano l’atto o il contratto). The parties to the transaction (le parti coinvolte nella transazione), together with the notary (notaio) if it is a notarised deed (atto notarile), are jointly and severally liable (responsabili in solido) for paying the registration tax.

11.2. Imposta ipotecaria(Mortgage tax)

Mortgage tax (imposta ipotecaria) is another indirect tax which applies to the registration (iscrizione), renewal (rinnovazione) or cancellation (cancellazione) of entries in land registers (pubblici registri immobiliari) relating to sales (vendite), inheritance (successioni), donations (donazioni), mortgages (ipoteche) or other property rights (diritti reali). Mortgage tax is usually applied at a fixed rate (misura fissa) of € 50 or € 200 depending on the nature of the operation (operazione).

11.3. Imposta catastale(Land registry tax)

Land registry tax (imposta catastale) is paid every time a transfer deed is added to the land registry (voltura catastale) to formalise the transfer (trasferimento) of property or property rights (proprietà o di diritti reali).Land registry tax is usually applied at the same rates as the mortgage tax (imposta ipotecaria).


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11.4. Imposta di bollo(Stamp duty)

Stamp duty (imposta di bollo) is another indirect tax that is due at a fixed or proportional rate (misura fissa o proporzionale) on deeds (atti), documents (documenti), or records (registri) that are drawn up in writing (redatto in forma scritta) such as:

› zero rated invoices and receipts (fatture e ricevute esenti da IVA) over € 77.47 - € 2

› deeds drawn up or authenticated by notaries (atti rogati o autenticati da notai) - € 230

› applications for the granting or registration of industrial property rights (domande di concessione o registrazione titoli di proprietà industriale) - € 42

› applications for the granting or registration of patents (domande di concessione o registrazione di brevetti) - € 20

› applications submitted to the Italian Business Register (domande presentate al Registro Imprese) - € 17.50 for sole traders (ditte individuali), - € 59 for partnerships (società di persone), - € 65 for companies with share capital (società di capitali)

› petitions, memorandums and appeals (istanze, memorie, ricorsi) - € 16

› bank statements (estratti conto bancari) - € 34.20 for individuals (persone fisiche) - € 100 for companies (persone giuridiche)

› some accounting books (libri contabili) - € 16

› copies of deeds (atti) and certificates (certificati) - € 16

Stamp duty can be paid either by purchasing stamped watermarked paper (carta bollata filigranata) or a revenue stamp (marca da bollo) to attach to the document, or via a return made to the Italian Revenue Agency (Agenzia delle Entrate).


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11.5. Imposta sulle transazioni finanziarie(Financial Transaction Tax)

Italy has recently introduced a tax on financial transactions (Imposta sulle transazioni finanziarie) applying to the transfers of the ownership of shares and other holdings in financial instruments (trasferimenti di proprietà di azioni e altri strumenti finanziari) and to transactions in derivative financial instruments and other transferable securities (operazioni su strumenti finanziari derivati ed altri valori mobiliari).The tax is not charged on transactions involving bonds (obbligazioni) or Government securities (Titoli di Stato). It is not applicable for partnerships società di persone and limited liability companies (società a responsabilità limitata). The rate is 0.2% of the transaction value (valore della transazione), reduced to 0.1% for sales taking place on regulated markets (mercati regolamentati).

11.6. Dazi doganali e accise(Customs and excise duties)

Customs duties are levied on goods imported from outside the EU (dazi doganali sono riscossi sulle merci importate da paesi terzi) and are collected by the customs authorities (autorità doganali) at the time of importation (al momento dell’ importazione). The rate applied depends on the type of goods imported (varia a seconda del tipo di bene importato), their country of origin (paese terzo di origine) and their value (valore).Excise duties (accise) are levied for supplies of certain goods such as petrol and other fuels (benzina e altri carburanti), tobacco (tabacco), alcohol (alcolici), and gas and electricity (gas e energia elettrica).

11.7. Diritti camerali(Business register’s fee)

Annual fees payable to the Chambers of Commerce (Camere di Commercio) are based on the turnover (fatturato) of the company.

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12. Taxes on Individuals

Tassazione delle Persone Fisiche

Individuals tax resident in Italy (persone fisiche fiscalmente residenti in Italia) are subject to income tax (imposta sul reddito), withholding tax (ritenute d’acconto), service tax (Imposta Unica Comunale), inheritance tax (imposta sulle successioni) and social security contributions (contributi previdenziali). Resident individuals are taxed on their worldwide income (reddito mondiale).Non-resident individuals (non residenti nel territorio dello Stato) are taxed only on income earned in Italy (redditi prodotti in Italia).

12.1. Residenza(Residence)

An individual is considered to be resident for tax purposes (residente ai fini fiscali) if registered at the Italian registry office (registrato all’anagrafe) or domiciled (domiciliato) in Italy or resident there for 183 days or more in a taxyear (residente in Italia per più di 183 giorni nell’arco del anno fiscale).Domicile (domicilio) is the place where an individual has established the principal centre of business or interests (il luogo in cui una persona ha posto la sede principale dei propri affari o interessi).

12.2. Imposta sul Reddito delle Persone Fisiche (IRPEF)(Personal income tax)

IRPEF is a progressive and direct income tax (imposta progressiva e diretta sul reddito) applied to the earnings of individuals (persone fisiche) in Italy.


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12.3. Reddito imponibile(Taxable Income)

IRPEF is applied on the total income (reddito complessivo) from the following income categories (categorie di reddito):

1) Income from land (redditi fondiari)

2) Capital income (redditi di capitale)

3) Employment income (redditi di lavoro dipendente)

4) Self-employment income (redditi di lavoro autonomo)

5) Business income (redditi di impresa)

6) Miscellaneous income (redditi diversi)

12.3.1. Redditi fondiari(Income from land)

As a rule, income is determined on the basis of the cadastral value (valore catastale) of the property.If the property is let (dato in locazione), the taxable base (base imponibile) is the higher of (a) its cadastral value (valore catastale) or (b) its rental value (valore locativo) reduced by the maintenance expenses (spese di manutenzione) up to a maximum of 5% (fino a un massimo del 5%) of the rental value. It is possible to apply a fixed rate (cedolare secca) of 10% or 21% if specific conditions are met.Italian tax residents must also declare income from property located outside Italy (beni immobili all’estero) unless there is an applicable tax treaty (convenzione contro doppie imposizioni). In addition to IRPEF, there are also other taxes on property (tasse sugli immobili) such as the Imposta Comunale Unica service tax (see chapter 10) and various indirect taxes (imposte indirette) (see chapter 11)


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12.3.2. Redditi di capitale(Capital Income)

12.3.2.1. Interessi attivi(Interest income)Resident individuals (persone fisiche residenti) are taxed at a flat rate (aliquota fissa) of 26% on interest (interessi attivi), reduced to 12.5% for interest earned on Italian Treasury bonds or similar instruments (titoli di stato e strumenti simili).Non residents (persone fisiche non residenti) are also generally taxed at the 26% flat rate (aliquota fissa) on interest received from an Italian resident company.

12.3.2.2. Dividendi e plusvalenze(Dividends and capital gains)Resident and non resident individuals (persone fisiche residenti e non residenti) are generally taxed at their ordinary tax rate (aliquota ordinaria) on 49.72% of dividends (dividendi) and capital gains (plusvalenze) relating to qualified shareholdings (partecipazioni qualificate).A flat rate (aliquota fissa) of 26% is applied to dividends and capital gains relating to non qualified shareholdings (partecipazioni non qualificate).Dividends and capital gains arising from shareholdings held in companies located in blacklist countries (paesi presenti nella lista nera) are generally taxable in full (tassati in toto) at progressive income tax rates (secondo le ordinarie aliquote progressive).For listed companies (società quotate), holdings representing more than 2% of the voting rights or more than 5% of the share capital (che rappresentano una percentuale di diritti di voto superiore al 2% o una partecipazione al capitale superiore al 5%) are deemed to be qualifying shareholdings (partecipazioni qualificate). For non listed companies (società non quotate), qualifying shareholdings are holdings representing more than 20% of the voting rights or more than 25% of the share capital (che rappresentano una percentuale di diritti di voto superiore al 20% o una partecipazione al capitale superiore al 25%) .


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12.3.3. Redditi di lavoro dipendente(Employment income)

Income from employment (redditi di lavoro dipendente)is subject to withholding taxes (ritenute d’acconto) which represent an advance payment of income tax and which are deducted at source at the ordinary progressive rate (aliquota ordinaria progressiva) relative to the income tax bracket (scaglione dell’ imposta sul reddito) of the employee (dipendente).Any balancing payment (saldo) due is made by the individual in their annual tax return.

12.3.4. Redditi di lavoro autonomo(Self employment income)

Self employment income (redditi di lavoro autonomo) is income derived from performing a trade or a profession (esercizio abituale di arti e professioni).Taxable income (reddito imponibile) is the difference between any fees (compensi) received and related tax allowable expenses (spese ammissibili).Generally a 20% withholding tax (ritenuta d’acconto) is applied to income earned from self employment (redditi di lavoro autonomo). Income from self employment derived by non residents (persone fisiche non residentii) for services performed in Italy (servizi resi in Italia) is subject to a 30% withholding tax.

12.3.5. Redditi di impresa(Business income)

Business income (redditi di impresa) is income derived by an entrepreneur (imprenditore) from carrying on commercial activities (imprese commerciali) involving the production of goods or services (produzione di beni o di servizi).Both resident and non-resident individuals with business income are also subject to a regional tax on productive activities Imposta Regionale Attività Produttive (IRAP) on income earned in Italy.


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The current ordinary tax rate (aliquota dell’ imposta) for IRAP is 3.9% although since it is a regional tax (imposta regionale), each region has the power to increase or decrease this rate to some extent.

12.3.6. Redditi diversi(Miscellaneous income)

Miscellaneous income (redditi diversi) is any other income not falling into one of the other categories above. For example non business linked capital gains (plusvalenze) or income from properties abroad (beni immobili situati all’estero)

12.4. Oneri deducibili(Deductible expenses)

Deductible expenses (oneri deducibili) are expenses that can be deducted from income before calculating the tax to be paid (possono essere sottratte al reddito prima di calcolare l’ imposta da pagare).These expenses include items such as social security contributions (contributi previdenziali), supplementary pension contributions (contributi per pensioni integrative), and certain donations (erogazioni liberali).The rate of social security contributions (contributi previdenziali) depends on the sector (settore) and job category (categoria contrattuale).Social security contributions are paid (versati) both by the employee (dipendente) and the employer (datore di lavoro).

12.5. Detrazioni(Allowances)

Allowances (detrazioni) can be set off against the tax payable (possono essere sottratte direttamente alle imposte da pagare) thus reducing the final tax owed.Italian tax residents are entitled to allowances (detrazioni) for items such as a dependent spouse (coniuge a carico), dependent children (figli a carico), interest


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on mortgages related to the main residence (interessi sui mutui ipotecari per l’acquisto della prima casa), and medical expenses (spese sanitarie).The allowances are usually equal to 19% of the cost borne (pari al 19% dell’onere sostenuto).Non residents may also be entitled to allowances in certain cases.

12.6. Aliquote IRPEF(Income tax rates)

Personal income tax is progressive (progressiva) rising to a top rate of 43%. The various tax brackets (scaglioni) currently in force are as follows:

Income up to (fino a) € 15,000 23%

Income from (da) € 15,001 to (a) € 28,000 27%



Income above (oltre) € 75,000 43%

In addition to IRPEF, additional regional and municipal taxes (addizionali regionali e comunali) are also due on the same taxable income. The exact rates (aliquote) depend on the individual region (regione) and municipality (comune) in which the individual is resident but are generally in the range of 1.23% to 3.33% and 0% to 8% respectively.

12.7. Imposta di successione e donazione(Inheritance and gift tax)

The rates of inheritance tax (aliquote delle imposte di successione) are 4%, 6% or 8% depending on the relationship with the deceased (relazione con il defunto) with an exemption (franchigia) up to € 1m for immediate relatives ( parenti in linea retta ).


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Inheritance and gift taxes are levied without regard to residence (residenza) if the transfer (trasferimento) is executed in Italy or relates to assets located in Italy (beni situati in Italia). The tax is also applied to transfers of assets located outside Italy (beni situati all’estero) if the beneficiaries are resident in Italy (i beneficiari sono residenti in Italia).

12.8. IVIE e IVAFE(Foreign property and assets tax)

IVIE (Imposta sul valore degli immobili situati all’estero) is a property value tax paid at 0.76% on the value of any property held outside Italy.IVAFE (Imposta sul valore delle attività finanziarie detenute all’estero) is a tax on financial products (prodotti finanziari) such as current accounts (conti correnti) and savings accounts (libretti di risparmio) held abroad charged at a rate of 0.2% of the market value (valore di mercato) at year end.

12.9. Contributo di solidarietà Solidarity surcharge)

Tax payers with annual gross income for IRPEF purposes of above € 300,000 (reddito complessivo IRPEF eccedente l’ importo di € 300.000 lordi annui) are subject to a solidarity surcharge (contributo di solidarietà) of 3% (applicable until the tax year ended 2016) on all income exceeding the € 300,000 threshold.


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12.10. Tassazione aggiuntiva(Tax on bonuses and stock options)

An additional tax (tassazione aggiuntiva) of 10% is levied on bonuses, stock options and similar benefits (compensi corrisposti sotto forma di bonus e stock options) paid to executives (dirigenti) of companies operating in the financial sector (settore finanziario).

12.11. Dichiarazione dei redditi e pagamento(Filing and payment)

The Italian tax year (anno d’ imposta) follows the calendar year (anno solare).Throughout the year taxpayers are required to comply with a series of obligations (adempimenti). Almost all tax returns and fiscal communications must be sent electronically (telematicamente).Individuals and partnerships must submit their annual tax return (dichiarazione dei redditi) between May (maggio) and September (settembre) of the year following the tax year (anno d’ imposta). Failure to file a return or late filing will result in penalties (sanzioni) and interest (interessi) being applied.Two advance payments of tax (due rate) must be made by June (giugno) and November (novembre) of each tax year with any balancing payment (saldo) being made by June of the following year (anno successivo).Any overpaid tax may be used to offset other tax liabilities (utilizzato in compensazione) or reclaimed (richiesto a rimborso).

12.12. Studi di settore(Sector studies)

The Italian tax authorities use Studi di settore (Sectoral studies) to build up a picture of expected normal revenues or fees (ricavi o compensi) for different types of tax payer (contribuente).See chapter 7

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13. Employment

Lavoro

13.1. Diritto del lavoro(Employment law)

The main legislation governing employment law (diritto del lavoro) in Italy can be found in:

› The Italian Civil Code (Codice Civile)

› The Workers’ Statute (Statuto dei Lavoratori)

› National collective agreements (contratti collettivi) that are agreed periodically between trade unions (organizzazioni sindacali dei lavoratori) and employers’ associations (associazioni dei datori di lavoro) in different sectors (settori).

Employment law is currently undergoing many reforms with the introduction of the government’s ‘Jobs Act’ which has introduced four new initiatives:

› A new form of permanent contract (contratto di lavoro a tempo indeterminato)

› Changes to the form of temporary contracts (contratti di lavoro a tempo determinato)

› New rules on terminating contracts (licenziamenti)

› Changes to unemployment benefits (ammortizzatori sociali)

13.2. Classificazione dei lavoratori(Categories of workers)

Under Italian law there are four categories (categorie) of workers:

› Executives (Dirigenti)

› Middle managers (Quadri)

› White collar employees (Impiegati)

› Blue collar employees (Operai)

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13.3. Contratti di lavoro (Employment contracts)

Employment contracts are governed by general rules set out in the Civil Code (Codice Civile). The national collective agreements (contratti collettivi) also set out the general principles regulating employment relationships (rapporti di lavoro).Each time a new employee (dipendente) is hired, the employer (datore di lavoro) must notify the official Employment Office (Centro per l’ impiego). This notification also includes the information which will then be automatically sent to the Social Security Department (Istituto Nazionale Previdenza Sociale) (INPS)) and the Workers’ Compensation Authority (Istituto Nazionale Assicurazione Infortuni sul Lavoro (INAIL).There is no legal requirement (obbligo legale) for employment contracts (contratti di lavoro) to be made in writing (in forma scritta) but the employer must send the newly hired employee a letter of appointment (lettera di assunzione) within 30 days of commencement of employment (assunzione) giving details of:

› date on which the contract begins (data di inizio del rapporto)

› working hours (l’orario di lavoro)

› job category (l’ inquadramento contrattuale)

› probationary period (periodo di prova), if applicable

› length of the notice period when terminating the contract (i termini di preavviso in caso di recesso)

› basic salary (l’ importo della retribuzione base)

› place of work (luogo di lavoro)

› identity of the parties (l’ identità delle parti)


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13.4. Salari e stipendi(Wages and salaries)

Minimum wages (salari minimi) for each category (categoria) are usually set out by sector (settore) in the national collective agreements (contratti collettivi).Under Italian law, employees (dipendenti) are paid in thirteen monthly instalments. The thirteenth instalment (tredicesima) is paid together with the December salary.Some employees also get a fourteenth monthly instalment (quattordicesima) which is normally paid in June.Employees may also be given fringe benefits (benefici aggiuntivi) such as company car (auto aziendale), mobile phone (cellulare), training (formazione) and luncheon vouchers (buoni pasto). Companies are also required to fund a severance indemnity (Trattamento di Fine Rapporto – TFR) for employees amounting to 1/13.5 of annual pay which is paid upon termination whatever the reason.The collective agreements also set out details of working hours (orario di lavoro), rest days (giornate di riposo) and overtime (lavoro straordinario).

13.5. Ferie (Holidays)

Statutory minimum holidays (durata minima delle ferie annuali) are four weeks per year (quattro settimane all’anno) in addition to public holidays (giorni festivi).The collective agreements (contratti collettivi) usually provide for further days of paid holiday (ferie retribuite) which increase based on the length of service (anzianità di servizio).

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13.6. Congedo per malattia(Sick leave)

Employees are entitled to three days paid sick leave (hanno diritto a tre giorni di congedo di malattià).Statutory sick pay (indennità di malattia) is provided from the 4th to the 180th day of illness.

13.7. Congedo di maternità(Maternity leaves)

Employees are entitled to five months maternity leave (hanno diritto a cinque mesi di congedo di maternità) comprising two months prior to their due date (due mesi prima della nascita) and a further three months after the birth (altri tre mesi dopo la nascita).

13.8. Altri congedi(Other leave)

Italian law provides for other kinds of leave such as adoption leave (congedo di adozione), paternity leave (congedo di paternità), parental leave (congedo parentale) and wedding leave (congedo per matrimonio).

13.9. Cassa Integrazione(Temporary lay offs)

When a company suffers economic crisis (crisi aziendale), and meets certain requirements, it may utilise a special fund – the Cassa Integrazione Guadagni which allows blue and white collar workers (operai e impiegati) to continue receiving up to 80% of their normal wages when there is a temporary lay off.


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13.10. Cessazione del rapporto di lavoro(End of employment)

Dismissal (licenziamento) must be given by written notice (mediante comunicazioni scritte). Employment contracts may be terminated when there is just cause (giusta causa) or justified grounds (giustificato motivo) for dismissal.Just cause (giusta causa) means a very serious breach (grave violazione) like, for example, theft (furto) or any other behaviour (comportamento) that seriously undermines the trust relationship (compromette il rapporto fiduciario) on which the employment relationship (rapporti di lavoro) is based. Justified grounds (giustificato motivo) may include examples such as failure to turn up at work (abbandono ingiustificato del posto di lavoro), wilful misconduct (cattiva condotta) or repeated breaches of the code of conduct (reiterate violazioni del codice disciplinare). Specific rules apply to employees who are executives (dirigenti). Upon termination, employees are entitled to:

› severance pay (trattamento di fine rapporto - TFR)

› payment in lieu of unused holidays and leave (indennità per ferie annuali retribuite non godute)

› a notice period of termination (termine di preavviso), the duration of which varies according to the employees’ seniority (anzianità) and professional level and as established by national collective agreements (contratti collettivi).

13.11. Retribuzioni e contributi previdenziali(Payroll and social security)

Employers are required to withhold tax at source on all remuneration in cash and in kind (remunerazioni in denaro o in natura) and remit it to the tax authorities on a monthly basis (ogni mese).The rates applied depend on the annual gross salary (retribuzioni lorde annue) of the employee.Social security contributions (contributi previdenziali) are payable by employers and employees. Employers’ contributions are generally in the region of 30% of salaries.

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14. Dealing with Banks

Rapporti con le Banche

Italy’s central bank (banca centrale) is Banca d’Italia which is a member of the European System of Central Banks (sistema europeo di banche centrali). Its primary functions are in relation to monetary policy (politica monetaria) and banking regulation and supervision (regolamentazione e vigilanza bancaria). The banking sector (settore bancario) in Italy is a comprehensive system of both private and state owned banks (banche private e pubbliche).

14.1. Requisiti per aprire un conto bancario aziendale(Requirements for opening a company bank account)

To open a company bank account (conto bancario aziendale) you will need to provide various documentation (documentazione). The documents requested might differ from bank to bank but banks in Italy will generally request the following to be presented in person at the branch (filiale):For a sole trader (impresa individuale):

› Documento di identità (passport or identity card) of the titolare dell’attività (owner of the business)

› Codice fiscale (fiscal code)

› A copy of the partita IVA (VAT number) from the Agenzia delle Entrate (Italian Revenue Agency)

› Certificato di iscrizione al Registro Imprese (certificate confirming registration with the Italian Business Register) issued by the Camere di Commercio (Chambers of Commerce)For a company (società):

› Copies of documento di identità (passport or identity card) of the directors (amministratori) and shareholders (soci)

› Codice fiscale (fiscal code) of the directors


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› Firme depositate delle amministratori (specimen directors signatures)

› copy of the Italian company’s Statuto (Articles of Association [US Bylaws])

› copy of the company’s Atto costitutivo (Memorandum of Association [US Articles of Incorporation]) issued by the Registro Imprese (Italian Business Register)

› Visura or Certificato della Camera di Commercio (Certificate of Good Standing from the Chambers of Commerce). This certificate confirms that the company has current legal status in Italy. It provides basic information about the company as well, such as the company fiscal code (codice fiscale), the registered office (sede legale), the VAT number (partita IVA) etc.

In addition to the Certificate of good standing (Certificato della Camera di Commercio) of the Italian company, it will also be necessary to provide Certificates of good standing for major shareholders. Italian banks are required to request information relating to any shareholders who hold more than 20 percent of a company.

14.2. Finanziamento (Financing)

Banks may be willing to provide finance (fornire finanziamenti) if the following conditions are met:

› good business plan (progetto imprenditoriale)

› availability of collateral assets (disponibilità di garanzie)

› the business owners have experience (esperienza dei proprietari di imprese)

› last 3 years audited financial statements (ultimi tre bilanci sottoposti a revisione)

› realistic feasibility study (studio di fattibilità)

Variable rate overdrafts (scoperti bancari a tasso variabile) are a common way of financing working capital (capitale circolante).Banks also offer short-, medium- and long-term loans (prestiti a breve, medio e lungo termine) with negotiable repayment terms (termini di rimborso negoziabili) and fixed or variable interest rates (tassi d’ interesse fissi o variabili).


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They can also offer finance to businesses by means of agreed credit facilities (fidi bancari) and preferential credit terms (termini di credito preferenziali).Other business finance services (servizi di finanza aziendale) include the provision of bank guarantees (garanzie bancarie), letters of credit (lettere di credito), and factoring services (smobilizzo crediti).

14.3. Glossario dei termini bancari più comuni(Glossary of most common banking terms)

Accensione/Apertura di un Mutuo Raising / Arranging a Loan

Accredito Credit

Addebito Debit

Ammortamento/Piano di Ammortamento Repayment /Repayment Plan

Apertura del Conto Corrente Opening of a Current Account

Assegno Bancario Bank Cheque

Assegno Circolare Bank Draft

Assegno su Piazza/Assegno fuori Piazza Town Cheque/Out-of-Town Cheque

Assicurazione Insurance

Bancomat Cash/Card

Bollette per il pagamento delle utenze Utility Bills

Bollo / Valore Bollato Stamp / Revenue Stamp

Bonifico Bancario Bank Transfer

Cambiale Bill of Exchange

Cambio Exchange

Carta di Credito Credit Card

Carta di Debito Debit Card

Commissioni Bancarie Bank Commissions

Contante (Monete e Banconote) Cash (Coins and Banknotes)

Conto Corrente Bancario Bank Current Account


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Contratto Contract

Coordinate Bancarie Bank sort codes

Delega Proxy

Denaro Money

Deposito Bancario Bank Deposit

Domicilio address

Estratto Conto Bank Statement

Fidejussione Surety

Fido Bancario Bank Credit facility

Filiale Branch

Finanziamento Loan

Fondo di Investimento Investment Fund

Importo Amount

Imposta Tax

Interesse Interest

Libretto di di Assegni Cheque Book

Moneta Currency

Mutuo Loan

Mutuo ipotecario Mortgage

Non Trasferibile “Account payee only”

Numero di Conto Corrente Current Account Number

Ordine Permanente Standing Order

Pagamento Payment

Prelievo di contante Cash withdrawal

Prestito Personale Personal Loan

Rendimento Yield

Residenza Place of Residence

Ritenuta d’Acconto / Fiscale Withholding tax

Scoperto bancario Overdraft

Soldi Money


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Spese di Gestione del Conto Bancario Bank Account Management Costs

Sportello Bancomat ATM (Cash Machine)

Tasse Taxes

Tasso d’Interesse Interest Rate

Strumenti di credito Credit Instruments

Valuta Value Date

Versamento Payment

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15. Antitrust

Antitrust

The Italian competition authority is the Autorità Garante della Concorrenza e del Mercato (A.G.C.M). The A.G.C.M is an independent body (organismo indipendente) that enforces laws relating to anticompetitive agreements (accordi anticoncorrenziali) between undertakings (imprese), and abuses of dominant position (abusi di posizione dominante).In addition, it oversees concentrations (concentrazioni) such as mergers (fusioni), acquisitions (acquisizioni) and joint ventures which may create or strengthen dominant positions detrimental to competition.The A.G.C.M also has several other competencies including protecting consumers (consumatori) from misleading advertising (pubblicità ingannevole) and comparative advertising (pubblicità comparativa) which may harm the products of competitors (prodotti di concorrenti) or create confusion amongst consumers.It also regulates against unfair commercial practices (pratiche commerciali scorrette) among undertakings and conflicts of interest (conflitti di interesse) for government officials.

15.1. Accordi anticoncorrenziali e pratiche concordate(Anti-competitive agreements and concerted practices)

Competition law (diritto della concorrenza - Legge Antitrust) prohibits agreements between (vieta tutti gli accordi tra) undertakings (imprese), companies (società), partnerships (società di persone) and sole traders (imprese individuali), and also prohibits decisions by associations of undertakings (decisioni di associazioni di imprese) and concerted practices (pratiche concordate) that may prevent, restrict or distort competition (impedire, restringere o falsare la concorrenza).This applies to agreements (accordi) and concerted practices (pratiche concordate) both between competitors, i.e. agreements of a horizontal

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nature (natura orizzontale), and among undertakings (imprese), or groups of undertakings (gruppi di imprese), acting at different levels of a market, i.e. of a vertical nature (natura verticale).An agreement may not necessarily be illegal (illegale) if it meets certain exemption criteria. Block exemptions (esenzioni per categoria) exist for certain categories of agreements.

15.2. Abuso di posizione dominante(Abuse of a dominant position)

Competition law (diritto della concorrenza) is aimed at regulating the unilateral conduct of dominant companies (comportamento unilaterale delle imprese in posizione dominante) which abuse their dominant position (che abusano della loro posizione dominante). Having a dominant position is not prohibited but abusing a dominant position is.A dominant position (posizione dominante) is generally one in which an undertaking (impresa), or group of undertakings (gruppo di imprese), has the economic strength (potere economico) to prevent effective competition (ostacolare la persistenza di una concorrenza effettiva sul mercato) and as a result is able to act independently of its competitors and customers (concorrenti e clienti).Examples of such abuse (abuso) are charging prices (l’applicazione dei prezzi) or imposing terms and conditions (l’ imposizione di termini e condizioni) which are unjustifiably burdensome (ingiustificabilmente gravosi), or acting in such a way as to impede market access (impedire l’accesso al mercato) by other competitors (concorrenti) or induce them to abandon their operations (abbandonare l’attività commerciale).


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15.3. Controllo delle concentrazioni(Market concentration assessment)

Market concentration assessment (controllo delle concentrazioni) is mainly governed by the Italian Competition Act (Norme per la tutela della concorrenza e del mercato) in Italy. Concentrations (concentrazioni), whether in the form of an acquisition of shares or of assets (l’acquisizione di quote o di attivi), joint ventures or other similar transactions, are subject to merger regulation when certain turnover thresholds (soglie di fatturato) are met.Merger regulation (regolamento sulle concentrazioni) requires mandatory pre-merger filing requirements (notifica preventiva) in respect of such transactions but, once notified, the transaction can go ahead without any waiting period. If, however, the transaction is completed after notification but before clearance, the authorities could request a de-merger (scissione). Within 30 days of notification, the competition authority (Autorità Garante della Concorrenza e del Mercato) must either give clearance (l’autorizzazione) or start an in-depth investigation (un’ indagine approfondita).Mergers (fusioni) and acquisitions (acquisizioni) must be notified to the competition authority if both the:

› combined aggregate turnover (fatturato aggregato congiunto) in Italy of all undertakings involved i.e. the turnover of the acquiring company (la società acquirente) plus turnover of the target company (la società oggetto dell’operazione) exceeds (supera) € 482 million

› aggregate Italian turnover (fatturato aggregato in Italia) of the target company exceeds (supera) € 48 million.

Turnover (fatturato) is defined as the amount derived from the sale of products or the provision (vendita dei beni o la prestazione dei servizi), excluding taxes (netto delle imposte) in the preceding financial year.Thresholds (soglie) are revised annually.

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15.4. Tasse di registrazione(Filing fees)

Filing fees (tasse di registrazione) are not required.Running costs of the Italian competition authority are now covered through an annual contribution system (contributo annuo) which is an annual tax that all corporations based in Italy whose revenues exceed (ricavi che superano) € 50 million in the prior financial year (nel precedente esercizio) must pay. Currently the contribution is calculated at 0.06 per thousand of the turnover (0,06 per mille del fatturato) as reported in the last approved financial statements (ultimo bilancio approvato). The competition authority has the power to increase or lower this percentage.Foreign companies (società estere) must pay this contribution (contributo) if they satisfy both of following conditions:

› They have permanent offices (rappresentanza permanente) in Italy

› The revenues (ricavi) of these permanent offices exceed € 50 million.

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16. Anti-Corruption

Anticorruzione

Italy’s enforcement of anti-corruption law (legge anticorruzione) has dramatically increased in recent years with the introduction of new laws which have added new concepts and instruments into the Italian legal system with the aim of fighting crime including financial crimes (criminalità finanziaria) such as corruption (corruzione) and money laundering (riciclaggio di denaro).These laws are:

› Corporate liability Law 231/2001 (Responsabilità amministrativa delle società)

› Anti-Corruption Law 190/2012 (Anticorruzione)

› Provisions on crimes against public administration, mafia type associations and false accounting Law 69/2015 (Disposizioni in materia di delitti contro la pubblica amministrazione, di associazioni di tipo mafioso e di falso in bilancio).

As well as regulating the public sector (settore pubblico), these laws all have an effect on companies working in the private sector (settore privato).

16.1. Responsabilità amministrativa delle società(Corporate liability)

Under law 231/2001, companies operating in Italy (società operanti in Italia) may be held directly liable (possono essere ritenute responsabili) for certain crimes (reati) that are committed on behalf, or for the benefit, of the company (commessi nell’ interesse della società o a suo vantaggio) by individuals (persone fisiche) performing functions of representation (rappresentanza), administration (amministrazione) or management (direzione) in the company. This extends to any employee (dipendente) or third party (terzo) acting in the name, or on behalf of the company (che agisca in nome e o per conto della società) and includes the following crimes:

› Crimes to the detriment of the State or public bodies or the European Union (truffa in danno dello Stato, di altro ente pubblico o dell’Unione Europea)

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› Corruption and misappropriation of public funds (corruzione e appropriazione indebita di fondi pubblici)

› Falsifications or counterfeiting of money, public credit cards and tax stamps (reati in tema di falsità in monete, in carte di pubblico credito e in valori di bollo)

› Money laundering (riciclaggio)

› Corporate crimes (reati societari)

› Market abuse (abusi di mercato)

› Crimes pertaining to terrorism and subversion of the democratic order (reati con finalità di terrorismo o di eversione dell’ordine democratico)

› Crimes against the person (reati contro la personalità individuale)

› IT crimes and illegal treatment of data (delitti informatici e trattamento illecito di dati)

› Murder and serious injuries through violation of the rules on health and safety in the workplace (delitti di omicidio colposo e lesioni gravi commessi in violazione delle norme antinfortunistiche e sulla tutela dell’ igiene e della sicurezza sul lavoro)

› Cross-border crimes (reati transnazionali)

The company’s liability (la responsabilità della società) is in addition to the criminal liability of the person who committed the offences (la responsabilità penale della persona fisica che ha commesso il reato). Law 231/2001 applies to all types of companies and associations (società di ogni tipo e associazioni) including companies with a registered office abroad (sede legale all’estero) and a branch (sede secondaria) in Italy.

16.1.1. Modello organizzativo e gestionale(Compliance programme)

A company may be able to construct an effective defence and therefore avoid corporate liability (essere esonerato da responsabilità) for an offence that has been committed if it can prove that:

› it had previously implemented an effective compliance programme and organisational, management and control structure (modello di organizzazione, gestione e controllo or ‘modello’) aimed at preventing criminal offences (reati)


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› it has appointed an internal supervisory body (organo di vigilanza e controllo) with independent powers of action and control (autonomi poteri di iniziativa e di controllo) responsible for supervising the functioning, effectiveness and observance of the compliance programme (con il compito di vigilare sul funzionamento, l’efficacia e l’osservanza del modello)

› the person who committed, or attempted to commit, the offence (che ha commesso o tentato di commettere il reato) fraudulently evaded the controls put in place by the company through the implementation of its compliance programme (ha eluso in maniera fraudolenta il modello di organizzazione e gestione).

When creating its compliance programme, a company must:

› assess all business activities and identify the areas in which it is most likely that crimes will be committed by directors or employees (identificare e valutare attività sensibili in quanto a rischio-reato)

› design and implement procedures, policies and protocols (elaborare e attuare procedure, politiche e protocolli) aimed at preventing offences (finalizzate a prevenire i reati) of the kind to which the company is exposed

› Identify the safest way to manage financial resources (individuare idonee modalità di gestione delle risorse finanziarie) in order to avoid such crimes being committed

› Introduce adequate disciplinary measures (introdurre adeguato sistema disciplinare) necessary to sanction non-compliance with rules laid down in the compliance programme (per sanzionare il mancato rispetto delle misure indicate nel modello di organizzazione, gestione e controllo)

› make provisions for adequate training programmes (programmi di formazione adeguati) for staff and high-level management.

16.1.2. Sanzioni(Sanctions)

Where crimes have been committed and the company cannot prove that they have done what is necessary to prevent such crimes, the court may apply the following sanctions (sanzioni):

› monetary fine (sanzione pecuniaria)

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› temporary suspension from engaging in business (interdizione dall’esercizio dell’attività)

› suspension or revocation of licenses, permits and authorisations (sospensione o revoca delle licenze, concessioni e autorizzazioni)

› disqualification from entering into contracts with public administration entities (divieto di contrattare con la pubblica amministrazione)

› disqualification from advertising goods and services (divieto di pubblicizzare bene o servizi)

16.2. Anticorruzione(Anti-corruption law)

The anti-corruption law introduced three new corruption and bribery offences:

› induced bribery (induzione indebita a dare o promettere utilità)

› dealings in unlawful influences (traffico di influenze illecite)

› private bribery (corruzione tra privati)

16.2.1. Induzione indebita a dare o promettere utilità(Induced bribery)

Induced bribery (induzione indebita a dare o promettere utilità) is the offence (reato) committed by a public officer (pubblico ufficiale) or a person charged with a public service (incaricato di pubblico servizio ) who, abusing of his or her powers or office (abusando della sua qualità o dei suoi poteri), induces another person (induce taluno) to give or promise money or any other advantage (a dare o a promettere indebitamente denaro o altra utilità).The private party who is unlawfully induced to give or promise such money or other advantage to the public officer (pubblico ufficiale) or person charged with a public service (incaricato di pubblico servizio ) also commits an offence (commette un reato).The definition of public officer (pubblico ufficiale) includes examples such as members of parliament (membri del parlamento), councillors (assessori), judges


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(giudici) and their consultants (consulenti), public notaries (notai pubblici) and police officers (funzionari di polizia).Persons charged with a public service (incaricato di pubblico servizio ) are public sector employees (impiegati degli enti pubblici) who don’t have the powers of a public officer but who work together with public officers (collaborano con i pubblici ufficiali) in carrying out work for public bodies (enti pubblici).Examples include electricity and gas meter readers (letturisti dei contatori di gas e energia elettrica), postal workers tasked with sorting mail (dipendenti postali addetti allo smistamento della corrispondenza), security guards driving security vans (guardie giurate che conducono furgoni portavalori) and managers of public landfill sites (gestori di discariche pubbliche).

16.2.2. Traffico di influenze illecite(Dealings in unlawful influences)

Dealings in unlawful influences (traffico di influenze illecite) is the offence (reato) committed by a person who takes advantage of his or her relationship with a public officer or person charged with a public service (sfruttando relazioni esistenti con un pubblico ufficiale o con un incaricato di un pubblico servizio) for the purpose of receiving or being promised money or any other kind of economic advantage as compensation in exchange for his or her unlawful dealings (indebitamente fa dare o promettere denaro o altro vantaggio patrimoniale come prezzo della propria mediazione illecita).The same offence applies to anyone who unlawfully gives or promises money or other advantages in exchange for unlawful dealings (lo stesso reato si applica a chi indebitamente dà o promette denaro o altro vantaggio patrimoniale come prezzo della propria mediazione illectia).

16.2.3. Corruzione tra privati(Private bribery)

Private bribery (corruzione tra privati) is the offence committed when a director (amministratore), general manager (direttore generale), a manager responsible for preparing financial reports (dirigente preposto alla redazione dei documenti contabili societari), a statutory auditor (sindaco) or a liquidator

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(amministratore) of a company, or any employee acting under the direction or supervision of any of these persons (sottoposti alla direzione o alla vigilanza di uno dei soggetti sopra indicato), acts – or fails to act – in breach of the duties relating to their office (compie o omette di compiere atti in violazione degli obblighi inerenti al suo ufficio), to the detriment of the company (a danno della società), in exchange for the payment or the promise of money or other kind of financial advantage (pagamento o promessa di denaro o altri vantaggi patrimoniali).It is also an offence for any person to give or promise money or other advantage to these individuals (dare o promettere indebitamente denaro o altro vantaggio patrimoniale).

16.2.4. Disposizioni in materia di delitti contro la pubblica amministrazione, di associazioni di tipo mafioso e di falso in bilancio(Provisions on crimes against public administration, mafia type associations and false accounting)

This new law focuses mainly on changes to criminal sentences (condanne penali). There is an increase in the minimum and maximum prison sentences (pene detentive minime e massime) for corruption (corruzione), embezzlement (peculato) and misappropriation (appropriazione indebita). Mafia type associations (associazioni di tipo mafioso) will also be more severely punished.The option to start plea bargaining (patteggiamento) will now only be granted once any proceeds of crime (profitto del reato) have been returned. The law also introduces new provisions on false accounting crimes (reato di falso in bilancio) reinstating it as a crime punishable with monetary fines or imprisonment (pene pecuniarie o detentive). The law applies to all companies (si applica a tutte le società), not only those listed on a stock exchange (quotate in borsa), although the maximum sentences are lighter for unlisted companies (le pene massime sono meno severe per le societa non quotate).


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Investigations of corruption offences (indagini sulla corruzione) are carried out by the police forces (forze dell’ordine), in particular:

› Carabinieri (the military police)

› Polizia di Stato (the state police)

› Guardia di Finanza (the finance police)

Public prosecutors (pubblici ministeri) are entrusted with prosecuting the offences (perseguire i reati) in the Italian courts (tribunali italiani) and must inform the chairman of the Anticorruption Authority (presidente dell’Autorità Anticorruzione) of any legal proceedings (procedimenti giudiziari).

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17. Insolvency

Procedure Concorsuali

17.1. Fallimento(Bankruptcy)

Italian Insolvency Law (legge fallimentare) has been extensively reformed in recent years, specifically in relation to creditor arrangements (concordato preventivo) and debt restructuring (accordi di ristrutturazione dei crediti). The reforms have introduced procedures which are similar to Chapter 11 bankruptcy in the US and have led to more efficient regulation of pre-insolvency agreements (accordi prefallimentare).Companies in financial difficulty are now offered more flexible schemes which allow them to overcome their difficulties while preserving their business continuity thereby increasing the chance that they can be saved rather than go into liquidation.

17.2. Concordato preventivo(Pre-insolvency creditor arrangement)

The pre-insolvency creditor arrangement (concordato preventivo) is a court procedure (procedura giudiziaria) allowing a company in financial difficulty (difficoltà finanziarie) to propose a plan to come to an arrangement with its creditors (un accordo con i creditori).In order to qualify to apply for a pre-insolvency creditor agreement (concordato preventivo), a company must meet any one of the following conditions (condizioni) as laid down under Italian insolvency law (legge fallimentare):

› its assets (attivo patrimoniale) – on an annual basis (complessivo annuo) - over the last three years (nei tre esercizi antecedenti) are greater than € 300,000


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› its annual gross revenues (ricavi lordi) over the last three years (nei tre esercizi antecedenti) are greater than € 200,000

› indebtedness – whether due or not (ammontare di debiti anche non scaduti) – is in aggregate greater than € 500,000

In addition, the company has to be in a “state of financial distress” (stato di crisi). This requirement is now broader than the previously required “state of insolvency” (stato d’ insolvenza).The concordato preventivo procedure begins with the company filing a blank petition (domanda in bianco) before the insolvency court (tribunale fallimentare) competent in the place where the company has its registered office (sede legale).This blank petition (domanda in bianco) must be accompanied by the financial statements relating to the previous three financial years (bilanci degli ultimi tre esercizi) and a list of creditors and the amounts outstanding (l’elenco nominativo dei creditori con l’ indicazione dei relativi crediti).This opportunity essentially buys time and protects the business from possible action from creditors during the crucial weeks when the request for protection is being prepared.If the proposal passes the preliminary review, the insolvency court (tribunale fallimentare) will allow the registration of the pre-insolvency creditor agreement (concordato preventivo) and issue an order appointing a judge (giudice) to supervise the proceeding, as well as an official administrator (commissario giudiziale) who is usually an accountant (commercialista) or a lawyer (avvocato) having the powers of a public officer (pubblico ufficiale). The court can grant the company a period ranging from 60 to 120 days (which may be extended upon reasonable grounds (giustificati motivi) for a further 60 days) in order to file the petition with the full request for the pre-insolvency creditor agreement (concordato preventivo). The full request must include the proposed plan (piano) which has been certified by an independent expert (professionista indipendente) confirming the feasibility (fattibilità) of the plan and the truthfulness (veridicità) of the company data (dati aziendali).It must also be supported by the following documents:

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› Description of the financial situation of the company (relazione sulla situazione patrimoniale, economica e finanziaria)

› Statement of the company’s assets and liabilities (stato delle attività e passività)

› Schedule of the amounts due and a list of the creditors with their names and addresses (l’elenco nominativo dei creditori con l’ indicazione dei relativi crediti).Ordinary creditors may be split into different classes (classi diverse) and treated differently according to their class. Typical examples of categories are:

i) Banks (banche)

ii) Companies belonging to the same group as the debtor company (società che appartengono allo stesso gruppo del debitore)

iii) Suppliers/other ordinary creditors (fornitori/altri creditori)

Settlement of creditors (soddisfazione dei crediti) can be in any form (qualsiasi forma) including by the assignment of shares or quotas (assegnazione di azioni o quote).The administrator (commissario giudiziale) gives notice to all the creditors (comunica a tutti i creditori) of the date of the hearing (la data di convocazione) and the debtor’s proposals (le proposte del debitore) on which they are required to vote for the approval of the creditors arrangement (concordato preventivo).When the creditors are divided into classes (classi di creditori), the agreement can only be approved (approvato) if it receives a favourable vote (voto favorevole) from the majority (maggioranza) of creditors in each class. From the date the petition is filed until the order of the court becomes definitive, those creditors cannot commence or proceed with restraining actions or enforcement proceedings on assets of the debtor (non possono iniziare o proseguire azioni esecutive e cautelari sul patrimonio del debitore). During the proceedings (durante la procedura) the company is entitled to continue with the ordinary management of its business (l’amministrazione dell’ impresa) under the supervision of the official administrator (sotto la vigilanza del commissario giudiziale). Transactions of an extraordinary nature require the approval of the insolvency judge (giudice delegato).The debtor must file a monthly financial report on the status of the business (situazione finanziaria dell’ impresa) with the court (tribunale). This report is


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also made public by publishing it in the Business Register (Registro Imprese) maintained by the Chambers of Commerce (Camere di Commercio). Failure to do so will result in the court declaring the pre-insolvency settlement (accordo prefallimentare) inadmissible and may issue a declaration of bankruptcy(dichiarazione di fallimento).

17.3. Accordi di ristrutturazione dei debiti(Debt restructuring agreement)

Debt restructuring agreements (accordi di ristrutturazione dei debiti) are out-of-court agreements (accordi stragiudiziali) entered into between a company in financial difficulty (in crisi) and a number of its creditors representing at least 60% of all claims against the debtor (che rappresentino almeno il 60% dei crediti).Such agreements are only effective between the company and the participating creditors (creditori aderenti) and must be approved by the insolvency court (tribunale fallimentare) through a process known as omologazione. The debtor files the agreement (accordo) before the court (tribunale) together with, among other things, a report drafted by an expert ascertaining the feasibility of the agreement (l’attestazione di un professionista circa la fattibilità degli accordi), particularly with respect to the regular payments of the debts to the creditors who have not entered into the agreement (creditori che non hanno stipulato l’accordo con il debitore). The debt restructuring agreement (accordo di ristrutturazione dei debiti) must also be published in the Business Register (Registro Imprese).The debtor can also request a standstill agreement or moratorium (accordo di moratoria) during the negotiations of a debt restructuring agreement (accordo di ristrutturazione dei debiti). The effect of such an agreement is that the banks agree to not request the repayment of any amounts due (non richiedere il pagamento di qualsiasi importo dovuto) and to not take action to recover debts (non intraprendere azioni per il recupero del proprio credito).To request a moratorium (accordo di moratoria), the following documents must be filed with the insolvency court (tribunale fallimentare):

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› Request for the moratorium (richiesta moratoria)

› Up-to-date financial statements (ultimo bilancio)

› Detailed list of assets (elenco dettagliato delle attività)

› List of creditors (elenco dei creditori)

› List of holders of in rem or personal rights over the debtor’s assets (elenco dei titolari dei diritti reali o personali su beni del debitore)

› Proposal for a debt restructuring agreement (proposta di accordo di ristrutturazione dei debiti)

› Debtor’s statement (dichiarazione del debitore) confirming that negotiations with creditors representing at least 60% of its debts are continuing (negoziazioni con i creditori che rappresentano almeno i 60% dei crediti sono in corso)

› Report by an expert ascertaining the feasibility of the agreement (l’attestazione di un professionista circa la fattibilità degli accordi) and the ability to pay those creditors who have not entered into the agreement (creditori che non hanno stipulato l’accordo con il debitore).

The debt restructuring agreement (accordo di ristrutturazione dei debiti) can also include a tax settlement (transazione fiscale) to restructure tax debts.

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18. Business Culture in Italy

Generally Italians prefer face-to-face contact and like to do business with people that they know and trust so it’s important to spend time developing business relationships.Whenever possible, try to get somebody who knows the person to introduce you as this will reduce any apprehension the other person may have about you being unknown to them and therefore feeling uncertain.If you are going to be doing a lot of business with Italian companies it is better to actually travel there and develop your relationships in person rather than trying to build up contacts via email or on the telephone.Establishing reciprocal trust and respect can be as important as exchanging information and details about a business proposal.In addition to trust, dress and presentation also plays an important role in Italy. Fashionable style is considered a sign of social status and success. Formal attire is generally expected for business meetings although informal clothing is also possible but even casual clothes are always smart and chic.First meetings are often a way of getting to know each other better and providing general information regarding a proposal rather than being a conclusive part of the decision making process. Be prepared to be open. It helps if business contacts know something about who you are as it will increase trust and may well increase the chances of a successful outcome.Meetings in general are seen as an opportunity for a free flow of ideas where everyone has a chance to make their point. Even if a written agenda is provided, it may not be followed and it is common to be interrupted or for several people to speak at once. Interrupting is seen as a way of reaching conclusions or introducing new topics as they arise even if they are not on the agenda.If your meeting doesn’t start on time it’s best not to make a big deal about it. A small delay is not seen as a lack of respect and generally some flexibility should be built into work plans. If you’re in the north then punctuality is more likely to be respected but don’t be surprised if a meeting is scheduled

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for 10 am and your Italian counterpart arrives late. A 10-15 minute delay is generally considered acceptable.Italians are great communicators and meetings can be emotional and theatrical. Reserve or business detachment may be interpreted as signs of disinterest rather than professionalism. To an outsider discussions may seem very lengthy, overly verbose and loud but the ability to use language in this way is regarded as a skill in Italy.Negotiations are often lengthy too. Italians like to evaluate all the options carefully and many companies have a hierarchical decision making process which can slow things down. Generally importance is given to verbal commitments and the final contract will reflect previous informal agreements.It may be frustrating that everything seems to take so much time but it’s important to be patient even if you are working to a deadline. A sense of urgency may be interpreted as an attempt to weaken the other party’s bargaining position so it’s important to give your Italian counterpart time.It is common for business meetings to end with an invitation to go out for a meal. The venue will probably be a carefully chosen restaurant where everyone can socialise and build a closer relationship. Accepting such invitations is a good way to help develop your business relationship and build trust.

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Members of the board of CNDCEC

PresidentGerardo Longobardi

Vice PresidentDavide Di Russo

SecretaryAchille Coppola

TreasurerRoberto Cunsolo

Board MembersAdriano BarbarisiMaria Luisa CampiseAndrea Foschi Maurizio G. GrossoVito JaconoAttilio LigaGiorgio LuchettaLuigi Mandolesi Raffaele Marcello Marcello Marchetti Massimo Miani Giovanni G. Parente Ugo Marco Pollice Antonio Repaci Felice RuscettaSandro Santi Maria Rachele Vigani

CEOFrancesca Maione

Office holders

CNDCECPiazza della Repubblica, 5900185 – RomaTel. 06.47863300Fax. 06.47863349E-mail [email protected]. www.commercialisti.it

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Fondazione Nazionale dei Commercialisti

PresidentGiorgio Sganga

Board MembersAlessandro ClòLuigi Carunchio Michele De TavonattiNicolò La Barbera Vittorio RaccamariFrancesco Renne

Board of Statutory AuditorsClaudio SolferiniGaetano AmbrogioMaurizio Napolitano

Scientific DirectorGiovanni Castellani

Scientific CommitteeSalvatore BilardoVincenzo BusaMario CicalaMarco ElefantiCarlo Ricozzi

FNCPiazza della Repubblica, 6800185 – RomaTel. 06.4782901Fax. 06.4874756E-mail [email protected]. www.fondazionenazionalecommercialisti.it

Edited by

Fondazione Nazionale dei Commercialisti

Graphic design

Martino Palladini

Rebecca Sian MacKian

the language of the italianaccountancy profession

Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

the language of italian accountancy profession

9 788899 517052

ISBN 978-88-99517-05-2

moodle2.units.it · IVIE e IVAFE (Foreign property and assets tax) 72 12.9. Contributo di solidarietà (Solidarity surcharge) 72 12.10. Tassazione aggiuntiva (Tax on bonuses and stock

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