Import Procedures

Import procedures are subject to a declaration on-line or on paper. You will find further information on the Agenzia delle Dogane (Customs Agency) website.

The official model for written declarations to customs is the Single Administrative Document (SAD). The SAD serves as the EU importer's declaration.  It encompasses both customs duties and VAT and is valid in all EU Member States.

As part of the "SAFE" standards advocated by the World Customs Organisation (WCO), the European Union has set up a system of import controls, the "Import Control System" (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Programme eCustoms, has been in force since 1 January 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union. The EU recently introduced a new import control system called ICS2 to implement the EU customs pre-arrival security and safety programme.

Non-agricultural goods entering EU territory must adhere to customs formalities (ENS). This declaration must be carried out by the person bringing the goods to the territory. The Summary Declaration can be made electronically or on a form provided by the customs authorities. The deadline for lodging the ENS depends on the mode of transport carrying the goods.

Since July 1, 2009, all companies established outside of the EU are required to have an EORI number if they wish to lodge a customs declaration or an Entry/Exit Summary declaration. Once a company has received an EORI number, it can use it for exports to any of the 27 EU Member States.

Goods in transit only need a single EU transit document.

Inward processing is free of customs treatment. This procedure allows raw material (non-Union good) to enter temporarily without customs fees if it will be processed (or repaired) and re-export the finished products out of the EU territory. In this case, the importer gives a guarantee (from an insurance company or bank) equal to the amount of customs duties that would have been due on the imported raw material. This guarantee will be reimbursed when the final product is exported. This process also applies to goods planned to be re-exported. Only goods sold in the EU market are eligible to import duty and taxes.

For outward processing, duties and taxes apply only to the value added during the process. Only firms located in Italy or in the EU may take advantage of this measure.

Check the website of the EU Customs Union periodically for updates.

Specific Import Procedures

The Union Custom Code - adopted on 9 October 2013 as Regulation (EU) No 952/2013 - Title V provides for the following customs simplifications:

• Simplified declaration (Article 166 UCC)
• Centralised clearance (Article 179 UCC)
• Entry in the declarant's records (Article 182 UCC). This type of customs declaration is not allowed for all customs procedures (e.g. exclusion of transit).
• Drawing-up of customs declarations for goods falling under different tariff subheadings ( Article 177 UCC)
• Self-assessment (Article 185 UCC)

Distribution channels

According to USDA, in 2021 food retailers reported sales of EUR 167.8 billion, 2.9% more than in 2020. In 2021, hypermarkets accounted for 14.1% of the total grocery retailers sales in Italy, while supermarkets represented 35.5% and traditional grocery stores 24.9% (USDA). In 2020, there were more than 8,800 supermarkets and superstores, around 340 hypermarkets and more than 191,500 traditional grocery stores (Federdistribuzione). Traditional grocery retailers in Italy continue to account for a largest share of outlets. The majority of hypermarkets are located in the North of Italy, whereas supermarkets are equally distributed. In 2020 the number of independent operators continued to decline even though Italian consumers continue to appreciate traditional food stores (Federdistribuzione). The increased purchases of organic products prompted by health and wellness concerns has been instrumental to the growth of Natura Sì, whose total number of outlets rose to 364 globally in 2022 (Natura Sì).

Distribution market players

The Italian food retail and distribution market is highly competitive. In 2021, the leading players in this market were Conad (15% market share), Selex (14.5%), Coop Italia (12.3%), Esselunga (8.3%), Gruppo Vege (7.1%), Eurospin (6.9%), Carrefour (5.1%) and Lidl Italia (4.7%) (Statista). Despite the continued presence of traditional outlets, as well as increased competition from domestic and international retailers, these retailers occupy a dominant position in the market. Some of the leading players - Coop Italia and Conad - exist as consortia of smaller operators and owe some of their success to their detailed knowledge of local requirements and shoppers' preferences. The principal foreign investors are the major French retailers Carrefour and Auchan.

Retail Sector Organisations

CONFIDA
Federdistribuzione

Consumption Taxes

Nature of the Tax

IVA (Imposta sul Valore Aggiunto)

Tax Rate

22% in 2023

Reduced Tax Rate

The Italian legislation provides several reduced VAT rates:
- 4% for listed food, drinks, and agricultural products, books, newspapers and periodicals, medical equipment, and supplies of food and drink in a staff restaurant.
- 5% for the supply of social, health and education services (e.g., medical diagnostics, provision of hospital services and care) by Cooperative Sociali and their consortiums to certain categories of people (such as the elderly, the disabled, drug-addicted persons and AIDS patients); the supply of anti–COVID-19 goods; the supply of certain feminine hygiene products; the supply of baby products such as powdered milk; preparations foodstuffs of flour, groats, meal, starch or malt extract for feeding infants or young children; baby diapers and baby car seats; and the supply of natural gas used for combustion for civil and industrial uses, accounted for in invoices issued for estimated or actual consumption in January, February and March 2023.
- 10% for medicines, supplies of food and drink in restaurants, bars and hotels, supplies of electricity, methane and liquid petroleum, all for domestic use, electricity and gas for use by extraction enterprises and industrial enterprises, accommodation services rendered by marina resorts, the supply of pellet, and the supply of feminine hygiene products (different from the ones listed above for 5%).

Other Consumption Taxes

Several goods and services are subject to excise taxes in Italy, including: energetic products like petrol, gas oil, natural gas, coal; alcohol and alcoholic drinks; processed tobaccos and electric power.
Various stamp duties apply.

Corporate Taxes

Company Tax

24%

Tax Rate For Foreign Companies

Companies having their legal or administrative headquarters or their principal business activity within the Italian territory are considered to be resident companies.
A foreign company holding one or more Italian subsidiaries is deemed to be resident in Italy for tax purposes if it is (either directly or indirectly) held by Italian tax resident persons or its board of directors is made up mostly of Italian resident individuals.
The definition of permanent establishment follows the OECD's model.

Capital Gains Taxation

In general, capital gains are treated as ordinary income and taxed at the corporate income rate of 24%, plus IRAP at 3.9%. Capital gains derived from the sale of participations may be 95% tax-exempt if the following conditions are met: a) the participation has been held for a minimum uninterrupted period of 12 or 13 months; b) the participation is classified as a financial fixed asset in the first financial statement closed after the participation was acquired; c) the majority of the subsidiary's income is not generated in a tax haven country or one with a privileged tax regime over the last three years before the disposal; and d) the company in which the participation is held carries out a business activity continuously over the last three years before the disposal.
Capital gains obtained by non-resident companies are taxed at a 26% rate. Capital gains realized by a non-resident from the sale of a participation in a non-resident company are subject to taxation in Italy if more than 50% of the value of the non-resident company derives directly or indirectly from certain real estate property located in Italy at any time during the 365 days preceding the transfer.

Main Allowable Deductions and Tax Credits

Business expenses directly related to income generation are generally deductible: costs of setting up a business, commissions, depreciation and amortisation, staff bonuses and remuneration, royalties, advertising and entertainment expenses (capped; expenses related to gifts with a value of EUR 50 or less are entirely deductible). IMU is deductible for IRES purposes up to 100% (from FY 2022). In calculating the taxable base for IRES, the following IRAP expenses can be subtracted: 10% of the IRAP paid in the year; an amount determined by the IRAP paid on the cost of employees, after taking into account relevant deductions.

 

Interest expense is fully tax-deductible up to the amount of interest income. Interest expense in excess is deductible at up to 30% of the gross EBITDA, and the part in excess of the yearly limitation is carried forward in the following five fiscal years. Specific rules apply to the deduction of bad debts. Travel expenses incurred within the municipality are tax-deductible up to 75% (however, VAT is fully deductible).

An "allowance for corporate equity” (ACE) is available, consisting of a deduction equal to the net increase in the equity employed, multiplied by a rate determined each year (1.3% in 2023). The deduction is available each year, provided the equity increase is not diminished.

Company car expenses can be deducted up to 20% for cars that are not assigned to employees or are granted to employees solely for business use, and 70% if they are destined to employees for both business and private purposes. Mobile and landline telephones expenses are deductible up to 80%.

Deductions are available for charitable contributions. Meals and lodging expenses incurred within the municipality are deductible up to 75% of the expense incurred.

Losses may be carried forward and offset against corporate taxable income; however, 20% of taxable income in any year cannot be offset by carried-forward losses and is subject to corporate tax. Losses incurred in the first three tax periods may be carried forward to be offset against 100% of taxable income if these losses are linked to a new business activity. The carryback of losses is not permitted.

The patent box regime and R&D credit scheme grant tax credits subject to qualifying provisions to companies that invest in R&D. The tax exemption is up to 10% of the expenditure (capped at EUR 5 million) and can be granted to the permanent establishments of foreign companies if the latter are based in countries with which Italy has concluded a tax treaty and which exchange tax information with the company.

Other Corporate Taxes

A municipal tax is generally applied at a rate between 1.06% and 0.76% (generally 0.86%) on company-owned real estate (IMU). Municipal taxes are also calculated on the IMU for a common tax (IUC - Imposta unica comunale) on service (TASI) and refuse (TARI).

A transfer tax is applicable to all transactions registered with the public register, generally taxed at a percentage of the value.

Stamp duty ranging from EUR 2 to EUR 100 is levied on legal and banking transactions, at varying rates. Stamp duty applies to the transfer of shares or other financial instruments issued by resident companies at 0.2% of the transaction value, or 0.1% if the sale is made on a stock exchange (so-called "Tobin Tax").

Companies deemed to be "non-operating" are subject to a tax on a deemed minimum income at a rate of 34.5%. Non-operating status includes companies: with low turnover and inventory increase rates, with insufficient revenues, that are unprofitable or declare tax losses for 5 consecutive fiscal tax years.

A regional tax on productive activities (IRAP) of 3.9% is levied on the net value of production in each Italian region by resident companies and permanent establishments (PEs) of foreign companies. The rate may vary by up to 0.92% across regions. IRAP is on average 4.65% for banks and financial institutions and 5.9% for insurance companies.

A 30% withholding tax is levied on compensation paid to a non-resident company for the use of industrial, commercial and scientific equipment in Italy.

A Digital services tax (DST) was introduced in 2020. It is levied on taxpayers that, at a group level, have annual global turnover over EUR 750 million in the previous calendar year and annual revenue from digital services rendered in Italy of over EUR 5.5 million in the previous calendar year, irrespective of their tax residency. The rate is 3% of gross revenue net of VAT or indirect taxes. Companies subject to the tax must maintain monthly records of relevant transactions.

Social security contributions depend on the activity performed by the company, the number of employees, and the employee's position. For employers, the contribution is generally around 30%.

Italian shipping companies that are tax residents, as well as non-resident shipping companies that operate in Italy through a permanent establishment, may meet the requirements to opt for the tonnage tax regime.

Other Domestic Resources

Italian Revenue Agency

Doing Business: Italy, to obtain a summary of taxes and mandatory contributions

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed

Ministry of Finance website

Withholding Taxes

Dividends: 0% (resident company) / 1.2% (domestic final WHT on dividends distributed to shareholders resident in an EU/EEA country) / 26% (individuals and non-EEA companies);
Interest: 0% (resident company) / 12.5% (for government bonds) / 26% (individuals and non-resident companies);
Royalties: 0% (resident companies and individuals) / 22.5% (non-residents; 30% rate on 75% of gross royalty).

Withholding taxes may be reduced under an international tax treaty.