Corporation or permanent establishment in Italy of a non-resident company in addition to income taxes are subject to the following indirect taxes:

Value Added Tax (VAT)

Italy as a member of the European Union applies the VAT European system as Directive n.2006/112.

VAT is imposed virtually on all transactions involving goods and services. VAT paid by an entrepreneur on goods and services received, may normally be credited against the tax payable on his own turnover, so that, in effect, only the value added is taxed. The normal rate of the tax is 22%. Reduced rates of 4% and 10% apply to basic necessities. Companies must calculate their VAT debt or credit on a monthly basis. If there is a balance due, the payment must be settled the following month. If certain conditions are met, VAT can be calculated and paid on a quarterly basis. The annual VAT return must be completed before the end of February.

In specific sectors of activity is applicable the reverse charge mechanism.

Registration and Stamp Duty

All written deeds and documents having legal effect and executed in Italy must be registered at the Registry Office within 20 days from the date of execution. In addition, certain oral agreements specified in the Registry Tax Law must be registered.

Almost all legal documents must be drafted on stamp paper, which may be purchased from public offices or authorized private dealers. If a legal document required to be on stamped paper is drafted abroad, it may be written on ordinary paper and subsequently stamped in Italy at a public office upon payment of the appropriate stamp duty.

Municipal Tax on Buildings (IMU)

The taxable basis is the cadastral value of the building. In the event that the cadastral value has not been determined by the tax office, the taxpayer must determine by itself the cadastral value of the building on the basis of certain parameters. For industrial buildings without cadastral value, the taxable basis is the historical cost of the real estate property revaluated by certain fixed parameters depending on the cost. The tax rate can range from 0.86% to 1.06% of the taxable basis.

Instrumental buildings are taxed at the rate of 0.76%

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