Italian VAT Registration for a UK or Foreign Company
The VAT number comes first; the annual VAT return of the calendar follows from it.
For foreign-owned Italian companies
Tax Advisory in Italy for Foreign-Owned Companies
The tax side of your Italian company, prepared before the deed: the parent's relief, loan or capital, residence and the transfer-pricing file.
- IRES 24% and IRAP 3.9% in 2026 (Agenzia delle Entrate)
- Withholding by parent: EU, UK or other (D.P.R. 600/1973)
- Transfer-pricing file signed by the return date
- Returns transmitted by the company or an Art. 3 D.P.R. 322/1998 intermediary
Parent, funding and holding layer, reviewed before the deed is signed.
Tax decisions that come before the deed
From Milan, for companies across Italy, FormaItalia prepares the tax side of a structure: the facts, the parent's relief, the funding mix, residence, the permanent-establishment line, the transfer-pricing file and the calendar. The books and returns sit with accounting for a foreign-owned Italian company.
Built for a foreign group's Italian subsidiary or branch, its CFO or counsel, and a non-resident founder's S.r.l. The global minimum tax and country-by-country reporting start at EUR 750 million of consolidated revenue (Art. 10(1) D.Lgs. 209/2023; Art. 1(145) L. 208/2015), so a smaller group is outside both.
What's included
Each item prepares a decision; the decision is yours.
The parent and its relief
An EU or EEA, UK or other non-EU parent, tested on dividends, interest, royalties and fees, with the one-year holding clocks of D.P.R. 600/1973.
Loan or capital
Interest is deductible up to interest income plus 30% of the gross operating result (Art. 96 TUIR); the lender bears 26% unless a treaty caps it (10% under the UK Convention) or the EU exemption applies. The capital side: the right structure for an Italian company.
The holding layer
Between parent and operating company: dividends received 95% excluded, gains 95% exempt under PEX (partecipazione esente, participation exemption), a three-year consolidation option (Arts. 87, 89, 117 TUIR). See setting up a holding S.r.l. in Italy.
Residence of a foreign holding
Registered seat, effective or ordinary management decide residence; a foreign holding is presumed Italian where Italian residents control it or resident directors are the majority (Art. 73 TUIR).
Permanent establishment and branch accounts
A fixed place, a dependent agent, or a site or project over three months (Art. 162 TUIR); a branch account takes a data certa (certain date) from the period in progress at 31 December 2026 (D.Lgs. 148/2026).
The transfer-pricing file
The Masterfile and Documentazione Nazionale (Italian local file), for the legal representative to sign with a time stamp by the return date and declare in it (Provvedimento 360494/2020).
The exit, planned at the start
Gains on Italian shares are Italian-source (Art. 23 TUIR); an EU or EEA company with no Italian permanent establishment, in a State that exchanges information and subject to corporate tax there, counts 5% of the gain on a qualified holding that meets the Art. 87 conditions (Art. 68(2-bis) TUIR); the UK Convention taxes in the seller's State (Art. 13).
Calendar, filing and requests in advance
The first-year calendar, the intermediary for tax filing for an Italian company, and advance pricing or investment-ruling files for the company to lodge.
Not included: transmitting returns (the company or an Art. 3 intermediary does), representation before the Agenzia or a court, the statutory audit; VAT and bookkeeping have their own pages.
What leaves Italy, by parent
What the Italian company withholds on each payment, by the parent's State. A UK company is a third-country parent since 1 January 2021 (Agenzia delle Entrate, Brexit FAQ); its caps come from the UK-Italy double tax treaty.
Paid by the Italian company to its parent: the Italian withholding, by the parent's State
EU or EEA company
EU and EEA routes, on their conditions
- Dividends1.20% final for a company of a listed EU or EEA State; for an EU parent on the Parent-Subsidiary route, a refund on request, or non-application at source on request (Arts. 27, 27-bis D.P.R. 600/1973)
- Interestexempt between EU associated companies: a direct holding of at least 25% of the votes, kept for one year (Art. 26-quater D.P.R. 600/1973)
- Royaltiesexempt between EU associated companies, on the same conditions
- Fees for servicesthe general rule: 30% final, unless the services are performed abroad or paid to an Italian permanent establishment; the EU exemption covers interest and royalties only
UK company
a third country since 1 January 2021: the UK Convention caps
- Dividends5% for a company controlling at least 10% of the votes, otherwise 15% (Art. 10)
- Interest10% (Art. 11)
- Royalties8% (Art. 12)
- Fees for serviceschecked case by case under the Convention
Another non-EU company
the general rule, then its own treaty
- Dividends26% final (Art. 27 D.P.R. 600/1973)
- Interest26% final (Art. 26 D.P.R. 600/1973)
- Royalties30% final on the taxable part (Art. 25 D.P.R. 600/1973)
- Fees for services30% final, unless the services are performed abroad or paid to an Italian permanent establishment (Art. 25 D.P.R. 600/1973)
Payer: the Italian company withholds on each payment and pays it over by F24; the parent's certificate and declaration are held by the payment date
As in force in 2026. Intra-group prices at arm's length (Art. 110(7) TUIR).
| Payment | General rule (any non-resident) | EU or EEA company | UK parent (treaty cap) | Conditions | Basis |
|---|---|---|---|---|---|
| Dividends | 26% final; refund of foreign tax up to 11/26 of the withholding | 1.20% final for a company of a listed EU or EEA State; for an EU parent on the Parent-Subsidiary route, a refund on request, or non-application at source on request | 5% for a company controlling at least 10% of the votes, otherwise 15%; tax above the cap refunded on application with a residence certificate | Parent-Subsidiary route: EU tax residence, a 10% holding kept uninterrupted for at least one year, the parent's certificate and declaration held by the payment date | Art. 27 D.P.R. 600/1973; Art. 27-bis D.P.R. 600/1973; Art. 3 D.L. 66/2014; UK Convention Art. 10 |
| Interest | 26% final | Exempt between EU associated companies: a direct holding of at least 25% of the votes, kept for one year; above the normal value, only the normal value is exempt | 10% | Priced at arm's length; for the EU exemption, an attestation of residence and a beneficial-owner declaration | Arts. 26, 26-quater D.P.R. 600/1973; Art. 110(7) TUIR; Convention Art. 11 |
| Royalties | 30% final on the taxable part | Exempt between EU associated companies, on the same conditions | 8% | Priced at arm's length | Arts. 25, 26-quater D.P.R. 600/1973; Convention Art. 12 |
| Fees for services | 30% final, unless the services are performed abroad or paid to an Italian permanent establishment | The general rule; the EU exemption covers interest and royalties | Checked case by case under the Convention | Whether an intra-group fee is caught is checked case by case | Art. 25 D.P.R. 600/1973 |
Sources: D.P.R. 600/1973 as in force in 2026 (Art. 25 valid to 31 December 2026); D.L. 66/2014; D.L. 38/2026; the UK-Italy Convention (Pallanza, 21 October 1988). Relief is claimed on the Agenzia's models of 10 July 2013.
How the tax side is settled, in order
Decisions before the deed, documentation after the first period; each clock is a statutory term or an Agenzia date.
law a statutory termAgenzia a date the Agenzia publishesderived worked out from a rule and the 2026 calendarno term no statutory term
Before the deed
- 1
Fix the facts of the structure
The client, with us
- no term no statutory term
- 2
Test the parent's access to relief
The client's adviser, with us coordinating
- law one uninterrupted year for the EU routes (D.P.R. 600/1973)
- law twelve months for PEX (Art. 87 TUIR)
- 3
Set out the funding mix
The client, with us
- no term no statutory term
- 4
Place the holding layer and its management
Where directors live and decide
- law control tested at the holding's year end (Art. 73 TUIR)
- no term before the appointments
Formation
- 5
Deed filed
The notary
- law within 10 days (Art. 2330(1) c.c.)
- 6
Entry in the Register
The Register
- law within 10 days of protocol, halved if filed electronically (Art. 11(8) D.P.R. 581/1995)
First period and close
- 7
The intermediary is appointed
The company, or an Art. 3 D.P.R. 322/1998 intermediary
- law return and receipt handed back within 30 days of the online deadline
- 8
The first period runs
The company
- law intra-group prices at arm's length (Art. 110(7) TUIR)
- law withholding on each payment, paid over by F24
- 9
Balance and first IRES advance
The company
- derived 30 June 2026, or 30 July 2026 with 0.40%
- law ISA companies: 20 July 2026, or 20 August 2026 with 0.80% (D.L. 89/2026)
- 10
Redditi SC, IRAP and the transfer-pricing file
The company and its intermediary
- law returns by the tenth month's last day: 2 November 2026 for FY2025
- Agenzia transfer-pricing file signed with a time stamp by the return date
- 11
Second IRES advance
The company
- derived last day of the eleventh month: 30 November 2026
Two holding clocks, running from acquisition
- law Parent-Subsidiary route and the EU interest and royalties exemption: the holding kept uninterrupted for at least one year (Arts. 27-bis, 26-quater D.P.R. 600/1973)
- law PEX: held from the first day of the twelfth month before the sale, booked as financial fixed assets (Arts. 87, 89 TUIR)
Statutory and Agenzia dates only: no duration of ours
Fix the facts of the structure
With the client: the ownership chain with votes, the parent's State, the planned dividends, interest, royalties and fees, and where directors live and decide. Clock: no statutory term.
Test the parent's access to relief
The client's adviser reads the parent against the table above, with us coordinating. Clocks: one uninterrupted year for the EU routes (D.P.R. 600/1973); twelve months for PEX (Art. 87 TUIR).
Set out the funding mix
The interest limit, the lender's withholding or exemption and the loan's arm's-length price, side by side. Clock: no statutory term.
Place the holding layer and its management
Where directors live and decide; control is tested at the holding's year end (Art. 73 TUIR); PEX shares go in the first balance sheet as financial fixed assets. Clock: before the appointments.
The company is formed
The notary files the deed within 10 days (Art. 2330(1) c.c.); the Register enters it within 10 days of protocol, halved if filed electronically (Art. 11(8) D.P.R. 581/1995).
The intermediary is appointed
The company files itself or mandates an Art. 3 D.P.R. 322/1998 intermediary, who hands back the return and receipt within 30 days of the online deadline. We coordinate; we are not on the list.
The first period runs
Intra-group prices at arm's length, with evidence (Art. 110(7) TUIR); withholding applied to each payment and paid over by F24; the parent's certificate and declaration held by the payment date.
The period closes
Redditi SC and IRAP by the tenth month's last day, 2 November 2026 for FY2025; balance and first advance by 30 June 2026, or 30 July with 0.40%; for a company subject to the ISA reliability indices, 20 July 2026, or 20 August with 0.80% (D.L. 89/2026); the transfer-pricing file signed by the return date (Agenzia delle Entrate).
Which parent, funding mix or holding layer does your structure start with?
We lay out the conditions and articles of each option with you before the deed; the choice stays yours.
Italian rules that shape the first years
Rates, limits, state fees and clocks a foreign owner plans around, as in force in 2026; more on the IRES and IRAP rates.
| Rule | Figure | Condition or limit | Basis |
|---|---|---|---|
| IRES (imposta sul reddito delle società, corporate income tax) | 24% | A non-resident company pays on Italian-source income only; the vehicle does not change the rate; still 24% from 1 January 2027 | Agenzia delle Entrate, IRES; D.Lgs. 117/2026 |
| IRAP (imposta regionale sulle attività produttive, regional production tax) | 3.9% of the net value of production | Sector rates 4.20%, 4.65% and 5.90% in the IRAP 2026 instructions (FY2025); from FY2026 two points higher for banks and insurers (L. 199/2025), and higher for certain activities (D.L. 21/2026); regions may vary rates by up to 0.92 points; a non-resident owes it through a permanent establishment active in a region for at least three months | Art. 16(1) D.Lgs. 446/1997; Agenzia delle Entrate, IRAP 2026 instructions; L. 199/2025; D.L. 21/2026 |
| FY2025 IRES option | 20% | One period only: at least 80% of the 2024 profit set to a reserve and at least EUR 20,000 in new assets, with headcount conditions; not a first-year relief | L. 207/2024; Agenzia delle Entrate |
| Non-operating company (società di comodo) | IRES plus 10.5 points | Revenue below a test on the company's assets; not applied in the first tax period | Art. 30 L. 724/1994; Art. 2 D.L. 138/2011 |
| Losses (perdite fiscali) | Set against up to 80% of each later period's income | Losses of the first three periods of a new productive activity count in full; switched off when the voting majority passes and the main activity changes, subject to the exceptions in the article | Art. 84 TUIR |
| Interest expense (interessi passivi) | Up to interest income, then 30% of the gross operating result | Excess interest carried forward; unused capacity carried to the next five periods | Art. 96 TUIR |
| Dividends received and PEX | 95% excluded; gains 95% exempt | Held from the first day of the twelfth month before the sale, booked as financial fixed assets, the subsidiary trading since the start of the third period before | Arts. 87, 89 TUIR |
| Domestic consolidation (consolidato fiscale nazionale) | Holdings of more than 50% | Parent and each IRES subsidiary; three financial years, irrevocable | Art. 117 TUIR |
| Advance pricing agreement (accordo preventivo) | State fee on a bilateral request: EUR 10,000, EUR 30,000 or EUR 50,000 | By group turnover: under EUR 100 million, EUR 100 million to EUR 750 million, above EUR 750 million; binds the period of signature and the next four; no fee printed for a unilateral agreement | Art. 31-ter D.P.R. 600/1973 |
| Ruling on a new investment (interpello) | At least EUR 15 million | Significant and lasting employment effects; reply within 120 days, extendable by 90; silence read as agreement; no fee in the statute | Art. 2 D.Lgs. 147/2015 |
Sources: TUIR and D.P.R. 600/1973 as in force in 2026; D.Lgs. 446/1997; L. 724/1994; D.L. 138/2011; L. 207/2024; D.Lgs. 147/2015; Agenzia delle Entrate. From 2027 D.Lgs. 117/2026 renumbers the TUIR; IRES stays 24%.
What the parent provides
The parent's tax documents; formation documents sit on the formation pages.
- A tax residence certificate from the parent's own tax authority, on its own form if it certifies treaty residence
- The parent's declaration on the holding period
- For the EU interest and royalties exemption: an attestation of residence and a beneficial-owner declaration
- The group chart with percentages and votes, and where the directors live and decide
- The planned intra-group flows, with the draft agreements
- The group's Masterfile, which may be in English; the Italian file is prepared in Italian
- For a UK parent: the agreed UK forms the Agenzia still accepts, otherwise its unilateral models
Problems we solve
What goes wrong for a foreign owner, and the rule behind it.
A loan that costs more than planned
Interest beyond the 30% limit waits for later periods (Art. 96 TUIR), and the lender bears 26% unless a treaty cap (10% under the UK Convention) or the EU exemption applies. We model both before the deed.
A non-EU parent counting on EU rates
Since 1 January 2021 a UK company has no 1.20% rate, no Parent-Subsidiary route and no EU interest and royalties exemption; 26% and the Convention's caps apply (Agenzia delle Entrate).
Directors and staff in the wrong place
A resident board majority can make a foreign holding Italian-resident (Art. 73 TUIR); parent staff who habitually conclude contracts in Italy can create a permanent establishment (Art. 162 TUIR). No ruling settles either.
No file by the return date
Without a transfer-pricing file signed with a time stamp and declared in the return, the 70% penalty on an adjustment is not shielded (Art. 1(6) D.Lgs. 471/1997, text valid to 31 December 2026).
Year-one assumptions
The 20% IRES option covered one FY2025 period (L. 207/2024); the Agenzia's payments page sets no separate rule for a first period; losses switch off when control and activity change, subject to exceptions (Art. 84 TUIR).
Already running an Italian company with payments to the parent?
We review an existing company's withholding, intra-group prices and transfer-pricing file.
Why work with us
Andrea Sala
Tax and Cross-Border Compliance Lead, Milan.
FormaItalia holds none of the protected titles (dottore commercialista, ragioniere, consulente del lavoro); returns are transmitted by the company or an intermediary on the Art. 3 D.P.R. 322/1998 list.
From our practice
we review the parent, the funding and the holding layer before the deed is signed, and every rate on a client's file carries its article and the date it is in force to.
Frequently asked questions
Does your team hold an Italian tax or accounting title?
No. Dottore commercialista, ragioniere and consulente del lavoro are protected titles, and FormaItalia claims none of them. We prepare and coordinate the tax side; transmitting a client's return is reserved to the company itself or to an intermediary on the closed list of Art. 3 D.P.R. 322/1998, as in force in 2026.
Do you file the company's return or represent it before the Agenzia?
The company files online itself, or an intermediary on the Art. 3 D.P.R. 322/1998 list (as in force in 2026) transmits the return after a written undertaking and returns it with the Agenzia's receipt within 30 days of the online deadline. We coordinate that intermediary. Representation before the Agenzia or a tax court is not part of this service.
How much does tax advice cost?
Our fees are quoted on request once the scope is known: the entities and payment flows, whether a transfer-pricing file or an advance request is needed. The state's charges are separate: a bilateral advance pricing request costs EUR 10,000, EUR 30,000 or EUR 50,000 by group turnover (Art. 31-ter D.P.R. 600/1973); the statute sets no fee for the investment ruling.
Can a UK or other non-EU parent use the EU withholding reliefs?
Not the EU ones. Since 1 January 2021 the United Kingdom is a third country for Italian tax (Agenzia delle Entrate), so the 1.20% rate, the Parent-Subsidiary route and the EU interest and royalties exemption are closed to a UK company. It falls back on 26% on dividends and the Convention's caps of 5% or 15%, 10% and 8%.
Does a new company get the 20% IRES rate?
Not as a first-year relief. The 20% option was a one-period measure for FY2025 under L. 207/2024 that needed at least 80% of the 2024 profit set to a reserve and at least EUR 20,000 invested in new assets, with headcount conditions (Agenzia delle Entrate). The ordinary rate is 24%.
Can the Agenzia confirm our residence, or that we have no permanent establishment, in advance?
No. The Agenzia treats both as questions of fact no ruling settles, with no safe number of days or board meetings. Two procedures settle a group's position in advance: an advance pricing agreement and, for an investment of at least EUR 15 million, a ruling within 120 days, extendable by 90 (Art. 2 D.Lgs. 147/2015, as in force in 2026).
Which tax decisions does a foreign group take in the first year of an Italian company?
The mix of capital and shareholder loan, the parent that holds the shares and the relief it can claim, whether a foreign holding is pulled into Italian residence, whether activity creates a permanent establishment, the transfer-pricing file, and the calendar of returns and payments. The conditions are laid out with their articles; the choice is the client's.
What corporate tax does a foreign-owned Italian company pay, and what is the "7% rule"?
IRES at 24% and IRAP at 3.9% in the ordinary case; the vehicle does not change the rate, and IRES stays 24% from 2027. The 7% rule is not a company rate: it is a substitute tax on foreign income for a foreign pensioner who moves to a qualifying small southern municipality (Art. 24-ter TUIR, as in force in 2026).
How much tax is withheld on dividends sent to a foreign parent?
26% final generally; 1.20% for a company of a listed EU or EEA State; on the Parent-Subsidiary route, a refund on request, or non-application at source on request, for an EU parent holding 10% for at least one year (Arts. 27, 27-bis D.P.R. 600/1973, as in force in 2026). A UK parent gets the Convention caps of 5% or 15%.
Is interest on a loan from the parent deductible?
Up to the company's interest income, then up to 30% of its gross operating result, with the excess carried forward (Art. 96 TUIR, as in force in 2026). The lender bears a 26% final withholding unless a treaty caps it or the exemption between EU associated companies applies. Whether to fund by loan or capital is decided with the client.
Are royalties and service fees paid to the group taxed on the way out?
Royalties bear 30% on their taxable part, and fees for services 30% unless performed abroad (Art. 25 D.P.R. 600/1973, as in force in 2026). A treaty can cut the rate, and every amount must be at arm's length (Art. 110(7) TUIR, as in force in 2026). Whether a given intra-group fee is caught is checked case by case.
When is a foreign holding company treated as Italian-resident?
A company is resident if its registered seat, effective management or ordinary management is in Italy for most of the tax period. A foreign entity holding a controlling stake in an Italian company is presumed resident, unless proved otherwise, when Italian residents control it or most of its directors live in Italy (Art. 73 TUIR, as in force in 2026).
Does an Italian subsidiary make the parent taxable in Italy?
Not by itself. A fixed place of business, a person who habitually concludes contracts for the parent without material change, or a site or project lasting more than three months can create a permanent establishment (Art. 162 TUIR, as in force in 2026). A subsidiary alone is not its parent's permanent establishment.
Is transfer-pricing documentation compulsory?
No statute compels it, but a conforming file shields the 70% penalty on a transfer-pricing adjustment (Art. 1(6) D.Lgs. 471/1997, as in force in 2026). It must be signed with an electronic signature and a time stamp no later than the return date, declared in the return and handed over within 20 days of a request (Provvedimento 360494/2020).
What is the new tax law in Italy for foreigners?
D.Lgs. 117/2026 (in force from 4 July 2026) replaces the income-tax code; the articles cited are in force to 31 December 2026; IRES stays 24%. From 1 January 2026 the 95% dividend regimes stand in full (D.L. 38/2026). A founder moving residence to Italy from 1 January 2026 may opt for a EUR 300,000 yearly lump sum (Art. 24-bis TUIR).
Ready to settle the tax side before the deed?
Send us the group chart and the planned flows; we reply with the conditions, the articles and the calendar.