I am doing some research into opening an Italian branch of a UK Ltd business. The italian branch will operate locally and employ italians. A new SRL (italian limited company) is 1 obvious option but I am interested to hear if anyone has used ONLY their UK Ltd company corporate structure to operate in Italy and con share their experience about either of the following italian solutions a) opened a “sedi secondarie” a full secondary head office which should be registered in the “Registre Imprese” Camera di Commercio (Italian Chambers of Commerce) OR b) opened a “unità locali” like a small office which only needs registering at the “REA Repertorio economico e amministrativo” (sub category of “Registre Imprese”).
Please outline :
A: Difference between a) or b).
B: Costs of solution a) or b).
C: Benefits : tax& operational of a) and/or b) compared to the SRL option
Please focus on the corporate structure and tax issues. This is not a question about employment in italy or INPS or INAIL in Italy.
Income Tax Italy IRPEF
I was just advising some clients about income tax on the rental income for thier italian property and thought you may wish to know the personal income tax rates in italy, locally know as IRPEF
There is no tax free income. The following is for income raised during the financial year 2009 upto 31/12/09. In Italy the tax year is the same as the calender year.Tax returns on the Mod 1 due 31.5.10.
First 15,000 euros taxed at 23%
Further income from 15000 – 28000 taxed at 27%
Further income from 28000 – 55,000 taxed at 38%
Further income from 55000 – 75000 taxed at 41%
Anything above 75000 taxed at 43%
So an income in Italy of 100,000 euros would result in an italian tax bill of
For a total tax bill of 3450+3510+10260+8200+10750=36170
Thats 36.1% italy income tax IRPEF on a 100,000 italian income…How does that rate to your countries income tax rate…post comments to let us know.
A property in Italy is given a rateable value by the Ufficio di Entrate (tax office) called valore catastale. It is important when you buy a house in Italy to be informed of the rateable value as some of the notary fee is based on this value. If you do a property search requesting the visure catastale the rentable value rendita catastale will be declared. Multiply the rendita catastale by 126 to calculate the valore catastale.
In some cases often in the south of Italy the valore catastale (rateable value) can be higher than the actual market value. Be careful as the notary will declare both values and any large difference may attract an italian finance police (la finanza) investigation. What you believe a bargain the finanza may believe you were purposely understating the value of the property thus tax avoidance by assisting the seller to avoid higher capital gains tax.
To avoid this you can request a perito quantity surveyor to officially value the property and produce a report called relazione di perito where the quantity surveyor swears in front of a judge his valuation of the property. Give this copy to the notary and ensure he makes reference to it in the atto di vendita final purchase deed.
This means you will pay lower notary fees “purchase taxes” and not be accused of tax avoidance.
Of course if the market value is higher than the catastal value then you don’t need to worry about this issue.
The above is an extract from the MIPC “Italian Property Consultant” ebook. Subscribe to our newsletter to receive similar italian property news.
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If you plan to buy a property in Italy always engage a professional Italian Property Consultant.