Paying Taxes in Rome

Paying Taxes in Rome

Sponsored links

Paying taxes in Rome: Direct tax
Taxes can either be direct (borne by the taxpayer) or indirect (collected by an intermediary, who in turn charges them on to the next contributor in the production chain or the final consumer). If you plan to open a business in Rome, either a new one or a branch office, you will have to deal with Italy's taxes system.
Direct taxation essentially falls within the competence of EU countries, which are largely free to design their direct tax systems so as to meet their domestic policy objectives and requirements - provided they respect the free movement of goods, persons, services and capital and the principle of non-discrimination.
The websites of the Minister for Finances and Revenue Agency are your best sources of information. But our warm suggestion is to not try to understand by yourself how Italian taxes work and when the various payments are due. That is what commercialistas are for.
At European Community level only a few legislative acts regarding direct taxation have been adopted, which is mainly due to the unanimity requirement for the adoption of such legislation. Let’s concentrate in the area of company taxation.
There are three directives here:
- the Parent-Subsidiary Directive ensures that cross-border payments of dividends within the same group of companies established in different EU countries do not suffer economic double taxation;
- the Merger Directive aims at mitigating the negative tax consequences arising from cross-border business restructuring within the EU;
- the Interest-Royalties Directive provides for the elimination of double taxation of interest and royalties between associated companies which are resident in different EU countries, by exempting them from taxation in the state of source. 

In addition to these directives, the Arbitration Convention addresses the problems of transfer pricing of goods, services and intangibles.
Recent European Commission initiatives tend to promote greater coordination of EU countries' direct tax systems in order to remove the existing fiscal barriers hindering the smooth functioning of the single market.

The key principles of coordination in this field consist in:
- the elimination of discrimination and double taxation;
- the prevention of inadvertent non-taxation and abuse;
- the reduction of compliance costs associated with being subject to more than one tax system.

The aim of coordinating the non harmonised direct tax systems of the EU countries is to render them compatible not only with Community law but also with each other.
To date the Commission has launched specific coordination initiatives concerning the areas of exit taxation, tax treatment of cross-border losses for companies and groups, as well as the anti-abuse measures in the area of direct taxation - within the EU and in relation to non-EU countries.

If you think that you have been subject to discriminatory tax treatment, which is incompatible with Community law, you may file a complaint with the European Commission.

If the complaint appears to be founded, the Commission may initiate infringement proceedings. However, such proceedings will only serve to remove the discriminatory features of the national legislation or practice in question.
Complaints, irrespective of the result of any Commission action, do not safeguard the rights of the complainants at national level. They should therefore make use of the national procedures for keeping their cases open.

Paying taxes in Rome: Indirect tax
Under the Treaty establishing the European Community, the EU has competence to harmonise indirect tax, including the tax base and rates, to avoid distortions in the EU market. The VAT is the most recurring type of indirect tax and the EU has harmonised it on all Europe. There is a certain amount of flexibility on VAT rates, so account can be taken of specific national circumstances.
The EU has harmonised also the structure and established a number of minimum rates for excise duties - indirect taxes on the consumption or use of certain products - on alcohol, tobacco and energy.

Print, send by e-mail, recommend in your social networks: share and enjoy
Condividi Tweet