Italy Tax Agency Clarifies Taxation of Income Paid to Employee of Foreign Subsidiary Company

The Italian Revenue Agency May 22 posted Letter No. 330/2023, clarifying the taxation of income paid to an employee of the foreign subsidiary company. The taxpayer is part of a group of companies jointly with the subsidiary foreign company. The subsidiary company appointed a director for the group of companies with a contractual obligation of the taxpayer to pay remuneration to him. The taxpayer inquired about the deductibility of the cost and any amount to be withheld on such fee payment. The tax agency clarified that: 1) the fees paid to the director don’t assume relevance for the determination of ...