Withholding taxes on money made overseas

Operating with international businesses, and making international transfers might entail dealing with withholding taxes.

If you are an Italian business receiving payments for dividends, royalties, interest or just invoice raised, your foreign counterpart might be required to deduct a certain amount (set by the national laws applicable) as tax withheld.

You may provide a certificate of tax residency to reduce your tax withheld, alternatively you can request the refund to the foreign tax office if the tax treaty in place allows for a reduced withholding tax rate.
Finally, you can offset the tax paid overseas against any tax due in Italy through your corporate/personal tax return.

A common exemption is the parent-subsidiary EU directive allowing EU companies to waive any withholding tax upon meeting certain criteria set by the law.

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