Typically, Italian source income from portfolio investments in Italy is subject to gross basis withholding tax. The tax rate ranges from 12.5 percent to 27 percent depending on the type of income or the tax status and residency of the foreign investor.

However, for many types of income, including interest and gains from sale or exchange of debt securities and income and gains from derivative transactions or participation to Italian investment funds, foreign investors can qualify for an exemption from tax provided for under Italian domestic law. The tax is completely forgiven if certain substantive and procedural requirements are complied with. In other situations, tax treaties can provide for a total or partial relief from tax. 

We assist foreign individual investors and investment funds in planning their portfolio investments in Italy in a way to qualify for the domestic or tax treaty tax exemption. This includes planning the investments and complying with the necessary filing and reporting requirements that are prescribed to benefit from the tax relief.

Our services in this area include:

- advice on the eligibility for the internal portfolio income exemption;

- advice on the eligibility for tax treaty benefits;

- advice on permanent establishment issues and the impact of anti abuse rules;

- advice on the procedural requirements to benefit from the internal or treaty exemption from tax.