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Italy UK Double Taxation Avoidance

Italy-UK Double Taxation Avoidance

Updated on Monday 10th August 2015

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Italy-UK-Double-Taxation-AvoidanceThe first double taxation agreement between Italy and the United Kingdom was signed in 1988 and enforced in 1990. The agreement applies to both UK and Italian residents and companies. The taxes covered by the Italy –UK double taxation treaty are:

The convention also applies to any similar taxes levied in Italy and the United Kingdom. Considering the agreement covers the taxation of companies, the first articles in the convention also establish which UK and Italian companies will benefit from these provisions. The double taxation agreement refers to the following companies:

  • - associated enterprises,
  • - permanent establishments.

For detailed information about all the taxes covered by the treaty, you may ask our Italian lawyers.

Fiscal domicile according to the Italy-UK double tax treaty

The first articles of the double taxation treaty between Italy and the United Kingdom establish the fiscal domicile of residents in order to determine where taxes are collected. An individual or company is liable to pay taxes in the country of residence, respectively of incorporation or place of management in case of companies. With respect to individuals residing in both countries, the fiscal domicile is determined as it follows:

Taxation of dividends under the Italy-UK double tax agreement

Dividends may be taxed in Italy or in the United Kingdom, as it follows:

  • - at a 5% tax rate, if the beneficial owner holds at least 10% of the share capital in the company paying the dividends,
  • - 15% in all other cases.

The elimination of double taxation will be done through a tax credit in the United Kingdom and as a tax exemption in Italy.

For additional information about the double taxation agreement with the UK, you may also contact our law firm in Italy.



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