Italy Tax Agency Clarifies Foreign Tax Credit Under DTA With U.K.

The Italian Revenue Agency Jan. 19 issued Letter No. 97/2023, clarifying the credit for taxes paid abroad, under the 1988 DTA with the U.K. An Italian resident declared income from both Italy and the U.K., and sought clarification as to whether he could claim a credit in Italy for the taxes withheld by his U.K. employer. The tax agency clarified that: 1) the taxpayer can include in his Italian tax declaration the taxes paid on foreign income, if the foreign income forms a part of the taxpayer’s total income for the specific period and the taxes are fully paid before ...