Italy Tax Agency Clarifies Substitute Tax Treatment of European Real Estate Company

The Italian Revenue Agency Jan. 17 issued Answer No. 60/2023, clarifying the application of the substitute tax to a European company with a permanent establishment (PE) in Italy. The taxpayer was a European publicly listed real estate investment trust (REIT) resident in a country with a DTA with Italy. The taxpayer intended to incorporate a real estate PE in Italy to make investments. The taxpayer inquired if the PE in Italy could apply substitute tax at the withholding tax for dividends under the DTA, instead of applying the 20 percent substitute tax rate under the SIIQ regime for REITs. The ...