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Italy – China Double Tax Treaty

Italy – China Double Tax Treaty

The conventions for the avoidance of double taxation are international agreements by which the contracting countries control the taxation privileges of the countries in order to remove double taxation on profits

The treaties intend to stop tax evasion and tax avoidance and they comprise some of requirements concerning administrative collaboration.

Chinese investors who want to start a business on the Italian market can profit of the provisions detailed in the contract for the avoidance of double taxation signed between Italy and China.

Our team of Italian company incorporation specialists can offer proper information on the main profits deriving from the Italy – China double tax Agreement (DTA), for all interested foreign investors.

Tax covered by the Italy – China DTA

The agreement signed by the two contracting states is accessible for profits and capital taxes available for natural persons and legal entities, which are tax-residents of Italy or China

 According to the treaty, the Italian authorities refer to the following taxes

the corporation tax;

• the income tax applicable to non-resident individuals;

• taxes on capital;

• the capital tax;

• the income tax on individuals;

• taxes on income.

Depending on the arrangements involved, these contracts enlarge the possibility for both republics to tax the same earnings (concurrent taxation) or, sometimes, the exclusive taxation by one state only.

The rule accepted for the central types of income (dividends, interest, royalties) sustains, with few exemptions, that the beneficiary pays tax in the country of residence.

Planning on starting a company in Italy? We invite you to discover the services offered by one of our company formation agents in Italy. Thus, we will help you with opening a bank account, preparing the documents, applying for the necessary business license, as well as registering with the relevant authorities. count on our support in this endeavor and contact us to discover the services offered by our specialists.

Taxation of the business profits

It is essential to know that, when opening or registering a business in Italy, the local authorities will apply the income taxes only for the earnings gained through the place of business founded on the Italian land, if that establishment is a long-lasting one. 

As a common rule, the profits of a Chinese business functioning in a foreign state will be taxed only in China.

Please feel free to contact our team of company incorporation agents in Italy, if you want extra information regarding double tax treaty between Italy and China.