Faced with economic developments and globalization, it became common to see companies in different countries better meeting the demands and also strive hard in order to save some money. The establishment of French companies is easier in Europe because of the existence of certain conventions avoiding double taxation.
Hence, France and Italy have signed two agreements which aim to fight against tax evasion but also lead to the desire to lighten the tax burden, thus avoiding the double taxation of companies. This trend also applies to individuals who, with the freedom to come and go, have become much more mobile than in the past and are willing to settle in a country of the European community to find a job.
Italy is the second partner of France, which reflects the importance of trade relations between the two countries for many years. Italy has a market of 57 million customers and 800 branches and 120 000 people were present on Italian territory in 2000. In order to better adapt its tax system to the changes in the global economy and with a view to simplifying the tax system, Italy has undertaken a major tax reform project in 2001 and a legal framework was promulgated in 2003. This reform affected both the taxation of individuals as firms and the organization of the tax system itself.
Primarily related to tax of personal income, one must define the subject and the various people involved in income tax. Indeed, one must be able to distinguish whether the individual is a resident or not (this distinction also applies to corporations) because the tax base varies greatly depending on each case. Therefore, it is necessary to explain the characteristics of different taxable incomes. Finally, it should be noted that as an individual, the taxable income is reduced significantly since the Finance Act 2005 confirms the franchise to a "no tax area". Secondly, regarding the taxes on corporations, they are three in number namely the IRES, IRAP and VAT.
The first two taxes have the distinction of being affected as it is the only state in the case of the IRES regions and is only in the case of IRAP which reflects two levels of taxation. In addition, companies are subject to VAT which is simply the tax on value added, however, unlike its predecessor the French VAT, the VAT is a feature known to distinguish between taxable transactions affected for other operators subject to VAT and those made with respect to final consumers. Italian taxation has even small similarities that can be noted as the IVA and VAT, IRAP and the French business tax, is completely different from both as the rates in its organization. It is therefore necessary to define these taxes to better understand the Italian tax system for corporations.
In Italy the income tax of individuals is called: Imposta sul delle PersoneFisiche Reddito (IRPEF). It is regulated by Decree of the Presidency of the Republic No. 917 of December 22, 1986, as amended by an Act of December 30, 2004. The tax return must be filed between May 1 and July 31 of the next year. .The Auditors of tax returns is called Bureau of Direct Taxes. As will be seen through the description of the Italian tax system on individuals, there are a number of tax benefits in Italy.
Tags: Report on Italian tax system; the IRPEF; income tax benefits for Italian individuals
[...] There are several types of gains: - Capital gains realized by an individual who is not engaged in business; - Those undertaken as part of a trade or business; - Capital gains realized in the framework of operation of subdivision or work to make buildable property and from the sale of real estate; - The capital gains as part of a transfer for value of properties bought or built within the last five years, excluding those acquired by succession or gift, and those which, for most of the period were the main residence of the transferor or his family; - Capital gains from the sale for value of shares or other equity held by private persons which are subject to special tax. Here, there are several tax rates depending on the importance of participation: 27% if the interest transferred is less than in listed companies in all other companies of the capital gain is taxable according to the taxation of IRPEF in other cases. The capital gain is determined by taking the difference between the sale of the participation and cost of acquisition. The Finance Act 2004 allows to re-evaluate the purchase price to the current value. [...]
[...] It is therefore necessary to define these taxes to better understand the Italian tax system for corporations. I - Tax on personal income In Italy, the income tax of individuals is called Imposta sul Reddito delle Fisiche Person (IRPEF). It is regulated by decree of the President of the Republic No of December amended by Act of December The tax return must be filed between May 1 and July 31 of the following year. If the declaration is made on the Internet, the period runs until October 31. [...]
[...] The 2003 reform was aimed at reducing the tax burden and simplifying the system of taxation. It is therefore necessary to define each of the three taxes to determine the tax situation of French companies in Italy. The corporate tax return is done by presenting the single model that also includes data on VAT before July 31 at the bank of the company or post office; this period is extended until October 31 when the declaration is made via Internet. [...]
[...] There is an optional taxation regime called "transparency". It is to provide the ability to assign income to members of the company on the basis of equity regardless of actual collection. This requires completing several conditions listed in the following two tables developed based on data collected. For limited liability companies: Conditions for the The company must be: company - an SRL (limited liability company) or an SCARL (cooperative with limited liability) They must have products below 5,164,569 euros and be subject to the regime followed in the business sector. [...]
[...] Yet such an agreement between Italy and France. This is article 24 of the 1989 Convention which states the measures taken to avoid double taxation. Benefits and other positive income arising in Italy as such are not taxable in France unless they return to being a resident of France. In addition, the Italian tax is not deductible for calculating taxable income in France, but the French resident is entitled to a tax credit against French tax which is equal to the amount of tax paid in Italy to income referred to in Articles and 17 of the said Convention, that is to say, dividends, interest, royalties, corporate executives and boards of directors or supervisory board, and finally, artists and athletes. [...]
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