ITALY Law and Practice Contributed by: Giuliano Foglia, Foglia & Partners
agreements (eg, exclusive taxation either in the State of source or in the State of residence). International remote working has not been specifically addressed by Italian tax legislation. However, the Ital - ian Revenue Agency has issued specific guidelines in Circular Letter No 25/2023, clarifying that remote working does not affect ordinary domestic and treaty- based rules regarding: • the residence of individuals; • the territoriality of employment income; and • the criteria for the existence of a PE of the foreign employer in Italy. 3.6 Other Income There is nothing else that would worth highlighting in this jurisdiction. 4. OECD/G20 Global Tax Reform 4.1 Pillar One – Amount B As of now, Italy has not taken any steps to adopt or implement Amount B. 4.2 Pillar One – Amount A Italy does not have a clearly articulated, standalone official position on Pillar One Amount A. 4.3 Pillar Two Italy has introduced the global minimum tax under Pil - lar Two, implementing Directive (EU) 2022/2523 (“Pillar Two Directive”) through Articles 8-60 of the Legislative Decree No 209/2023. The provisions on the global minimum tax apply to tax periods starting on or after 31 December 2023, except for those regulating the UTPR, which apply to tax periods starting on or after 31 December 2024. 4.4 Specific Features or Deviations of Pillar Two Italian domestic implementing provisions do not con - tain any deviations from the provisions of the Pillar Two Directive.
As a consequence, in line with the Directive, the domestic provisions differ from the OECD Model Rules in the following aspects: • the scope of application is extended to domes - tic groups, in addition to multinational groups, exceeding the threshold of EUR750 million; and • all entities located in a low-tax Member State are subject to top-up tax, including ultimate parent entities. 4.5 Digital Services Tax The Digital Services Tax (DST) has been effective in Italy since 1 January 2020, pending international negotiations to reach agreed solutions to address the taxation of the digital economy. Consistently, a spe - cific “sunset clause” provides that the DST is repealed once those solutions enter into force (note that this effect would have been achieved with the entry into force of the implementing provisions of Pillar One- Amount A). The DST applies to resident and non-resident entities carrying on business activities that, individually or at group level, realise revenues from the supply of digital services and generate worldwide revenues of at least EUR750 million. The DST applies to revenues derived from three cat - egories of digital services: • targeted advertising on digital interfaces; • provision of multilateral digital interfaces that allow users to stay in contact and interact with each other, also for the purposes of facilitating the sup - ply of goods and services; and • transmission for the consideration of data collected from users. Excluded from the scope of the DST are, inter alia, the direct supply of goods and services, the provi - sion of multilateral digital interfaces for the supply of financial services, payment services, digital contents, communication services, as well as certain energy trading platforms. The territoriality of the DST is determined by the user’s location in Italy when using the specific digital service,
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