Germany - Italy Double Tax Treaty

Italian businessmen who perform business activities in Germany can be the beneficiaries of the stipulations mentioned in the agreement for the avoidance of double taxation signed by the German and Italian authorities. This type of treaty is established in order to develop the trading activities between two contracting states, by offering various incentives to investors who are tax residents of those particular countries (in this case, Germany and Italy) and to avoid the double taxation of a tax resident company with activities in the other. Our team of German attorneys can provide assistance on the provisions of the treaty and the ways in which they are applied in Germany. 

 

 

Italian investors who want to open a business in Germany are entitled to benefit from the provisions of the double taxation agreement (DTA). It is important to know that each of the contracting states shall apply slightly different taxes, as the tax legislation applicable on the national territory of Germany and Italy differ. However, according to the stipulations of the treaty, the authorities will impose similar taxes. 

 

Germany will impose the following taxes: 

 

• the individual income tax;

• the corporate income tax;

• the capital tax;

• the trade tax;

• the land tax. 

 

Italian authorities are applying the following taxes: 

 

• the individual income tax;

• the corporate income tax;

• the local income tax. 

 

The provisions of the treaty are applicable to both natural persons and legal entities, where the legal entity can represent a company or an enterprise; our team of German lawyers can provide more details in this sense. 

 

 

Businessmen from Italy who have developed business activities in Germany should know that the business profits of the company established in Germany will be taxed in Italy as a general rule. However, if the operations are carried out in Germany through a permanent establishment, the profits will be taxed in Germany, but only in respect to the business profits obtained through the permanent establishment. 

 

A permanent establishment can refer to a place in which the business operations take place, such as an office, a mine, an enterprise or a construction site. 

 

Persons who are interested in receiving more information on the Germany – Italy double taxation agreement can address to our German law firm for legal assistance.