Tax Minimization in Italy

Tax Minimization in Italy

Updated on Monday 23rd April 2018

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Tax-Minimization-in-ItalyTax minimization is a lawful concept used by Italian companies or foreign investors wanting to set up companies in order to avoid taxation by using financial planning techniques. Tax minimization is commonly known as tax avoidance by legal means. Drafting a financial plan usually means the involvement of an Italian law firm that can explain in depth the legal solutions that can help enterprisers to achieve their goals.

Our Italian lawyers can provide you valuable information about the taxation system and how it can be implemented in advantageous ways.

Tax minimization solutions in Italy

The most common methods to reduce taxes in Italy are:

  • -          to make use of the investment incentives the Italian government provides,
  • -          to apply for tax deductions,
  • -          to make donations,
  • -          to make use of the partial and total tax exemptions the Italian tax authorities provide.

Taxation of companies in Italy

According to the new reform of the Italian taxation system, the corporate tax rate has been reduced to 24% and partial exemptions for capital gains taxes for companies that benefit from participation exemptions have been enabled. The group taxation has been introduced in Italy and this provides for domestic and foreign companies the possibility to form a tax group that will only be taxed once. 

The tax system in Italy also provides deductible burdens and tax allowances, such as medical costs. Contributions to the national insurance fund can provide grounds for tax minimization in Italy. It is also important to know that some taxes are applied considering the type of company the investor decides to set up in Italy.

Our law firm in Italy can help you choose the appropriate type of structure, so that you will benefit from tax minimization.

Incentives for foreign investors in Italy

As mentioned above, foreign investments can provide good opportunities for opening new companies, but they can also be an efficient instrument for tax minimization in Italy.

The Italian government supports the creation of industrial plants, companies that invest in research and development and encourages the creation of jobs for the Italian workforce. The incentives may come as tax credits, free grants that will help companies reduce expenses and incentives based on the location of the company.

For details about tax avoidance or corporate legislation, you can contact our lawyers in Italy.