Tax Requirements

There are five taxes in italy: the imposta sul reddito (income tax); the imposta sulle società (corporate tax); the imposta sul valore aggiunto (VAT or sales tax); the imposta sui servizi (tax on services); and the accise (excises). (Source)

The most relevant to those looking to set up a company in Italy is the corporate income tax. Italian corporate income tax is 27.9%, a 24% standard corporate income tax plus a 3.9% regional production tax. The following different regional production tax rates are applicable for certain entities:

• 3.80% for entities with a determined governmental exclusive right to provide services.
• 4.20% for banks and financial entities.
• 5.30% for insurance corporations. Regional production tax rate also differ slightly in different regions. (Source)

Italy charges a standard value-added tax (VAT) at 22%.

The individual income tax is progressive and range from 23% to 43%. If you are foreign and reside in Italy, you are only taxed on income earned in Italy, however, if you are Italian and spend more than 183 days a year in Italy, your worldwide income is subject to the income tax. (Source)

Audit Requirements

Internal Audits

The Board of Statutory Auditors (Collegio Sindacale) or a Sole Auditor (Sindaco Unico) is an internal supervisory body in some companies required to have them. They are entrusted with the oversight of corporate management in order to ensure compliance with the law, memorandum and articles of association. They are appointed by shareholders’ meetings, and supervise the activities of the board of directors as well as the activities of the shareholders’ meeting, attending the meetings while holding the power to challenge the resolutions adopted if against the law or the articles of association. Public companies must have a Board of Statutory Auditors or a Sole Auditor. In Limited Companies (Traditional S.r.l and Simplifies S.r.l, the equivalent of American L.L.C.s) the company is required to appoint a board of Statutory Auditors or a Sole Auditor if:

• The company is required to keep a consolidated balance; or
• The company controls or is controlled by a company which is subject to statutory audit (e.g. a Public Limited Company by Shares or S.p.A.); or
• for two years has exceeded the following limits: (a) total assets of the balance sheet: Euro 4,4 millions; (b) revenues from sales and services: Euro 8,8 millions; (iii) workers employed on average during a financial year are more than 50 units. (Source)

External Audits

A public company in Italy (S.p.a, public company limited by shares) must have its accounts audited every year by auditors appointed by shareholders’ meetings. In some cases, this can be performed by the internal Board of Statutory Auditors if

• all members on the board are chosen from the register of auditors, and
• the company is not listed on a stock exchange and is not are considered a “public-interest entity”, as defined by art. 16 of the Legislative Decree n. 39/2010 (which transposed European Directive 2006/43/CE) reforming the audit system, and
• the company is not required to draw up a consolidated balance sheet. (Source)

Sources:

• Taxes on Corporate Income for Italy - PWC Tax Summary
• Taxes in Italy
• Setting up a Company in Italy: Audit Requirements
• IncorporationsIO: Italy