The tax on an S.r.l.'s dividends paid abroad is a 26 percent final withholding, taken by the paying company after IRES on its profit. A refund of up to 11/26, the 1.20 percent rate, the Parent-Subsidiary exemption or a treaty rate lowers it, each on its own papers.
Our tax advice for a company in Italy page covers the wider tax picture of an Italian company. This guide stays with the payment abroad and sets out the conditions and documents of each route.
What does an Italian S.r.l. withhold on a dividend paid abroad?
A dividend paid by an Italian S.r.l. to a shareholder abroad bears a withholding of 26 percent, final (ritenuta a titolo d'imposta). The paying company is the sostituto d'imposta, the withholding agent: it keeps the tax out of the payment and pays it to the State. The rate comes from Art. 3(1) D.L. 66/2014, which fixes every withholding on Art. 44 TUIR capital income at 26 percent for income collectable from 1 July 2014. The company has already paid IRES at 24 percent on its profit (Agenzia delle Entrate), so the dividend is paid out of profit after tax.
Three routes move below the default and a fourth uses a treaty: the refund, the 1.20 percent rate, the exemption at source and the treaty rate on the Agenzia delle Entrate forms. This page is about withholding tax in Italy on payments to non-residents; withholding on payments to residents is a different regime. The articles of D.P.R. 600/1973 cited here carry an end date of 31 December 2026.
Every outbound rate on this page is final for the recipient (a titolo d'imposta), not a withholding on account (a titolo d'acconto): once the S.r.l. has withheld, the Italian tax on that payment is settled, apart from the refund routes below. The rates differ by recipient and by kind of payment, which is why the rest of the guide sets them side by side.
- Is the recipient a parent resident in an EU State, holding directly at least 10 percent for one year without interruption?Parent-Subsidiary exemption: no withholding. Papers by the payment date: tax authority certificate, holding-period declaration, request not to withholdGo to the next question
- Is the recipient a company subject to corporate income tax in, and resident in, an EU or listed EEA State?1.20 percent final. Evidence of residence and tax statusGo to the next question
- Is the recipient resident in a treaty State?Treaty rate, claimed on the Agenzia delle Entrate form26 percent final, with a refund of up to 11/26 on the foreign tax office's certificate
When can an S.r.l. pay a dividend at all?
Tax is the second question. Under the Civil Code (Arts. 2463(5) and 2478-bis), an S.r.l. may distribute only profits actually earned and shown in duly approved accounts. While its capital is impaired it distributes nothing until the capital is restored or reduced. This page states the rule and the articles without quoting them. The members, not the directors, decide on the distribution when they approve the accounts, so the dividend is a corporate decision before it is a tax event.
An S.r.l. with low capital sets aside one fifth of its yearly net profit as a reserve first, until reserve plus capital reach EUR 10,000. The accounts that found a distribution are approved at most 120 days after year end, or 180 where the deed allows.
Why does the statute say 27 percent when the rate is 26?
A reader of Art. 27(3) D.P.R. 600/1973 finds 27 percent printed beside dividends paid to non-residents. That figure is a drafting relic, not the rate. Art. 3(1) D.L. 66/2014 set the withholding on Art. 44 TUIR income at 26 percent, and the comma was never re-worded. The refund fraction of 11/26 in the same comma only works at 26. Two further printed figures are relics too (Table 1); none of the three is ever the rate.
Three printed figures against the figures that apply, with the reason for each gap.
| Provision | Printed figure | Operative figure | Why |
|---|---|---|---|
| Art. 27(3), dividends to non-residents | 27 percent | 26 percent | Art. 3(1) D.L. 66/2014 fixed 26 percent from 1 July 2014; the comma was not re-worded |
| Art. 26(5), interest to non-residents | 12.50 percent | 26 percent | Same decree, same date |
| Art. 27-bis(1), Parent-Subsidiary holding | 20 percent | 10 percent | D.Lgs. 49/2007 Art. 2(2) reduced it; 10 percent for profits distributed from 1 January 2009 |
Source: D.P.R. 600/1973 Arts. 26, 27 and 27-bis; D.L. 66/2014 Art. 3; D.Lgs. 49/2007 Art. 2(2), as of 2026.
A summary that quotes 27 percent for dividends, 12.50 percent for interest or 20 percent for the Parent-Subsidiary holding is reading the printed text, not the law that applies. Each article is cited here beside the figure that applies, so the gap can be checked.
Which routes can a foreign shareholder use, and on what conditions?
There are four routes below or beside the 26 percent default. Table 2 sets out who qualifies, the paper the shareholder supplies and when it must be in hand. It states conditions only; which route fits a given shareholder is for that shareholder and their advisers to decide, and the firm takes that conversation through our contact page.
The four routes for a dividend paid abroad, with rate, qualifier, document and timing.
| Route | Who qualifies | Document the shareholder supplies | When it must be in hand |
|---|---|---|---|
| 26 percent final, with a refund of up to 11/26 | Any non-resident recipient; the refund needs foreign tax definitively paid on the same profits. Not open to savings-share holders, EU/EEA pension funds and PEPP sub-accounts, or 1.20 percent companies | Certificate of the foreign tax office (for the refund) | After the S.r.l. has withheld; office and time limit not covered here |
| 1.20 percent final | Company or entity subject to corporate income tax in, and resident in, an EU State or a listed EEA State, with a holding not connected with an Italian permanent establishment | Evidence of residence and tax status; the provision lists no further documents | At payment |
| Parent-Subsidiary exemption: no withholding | Parent resident in an EU State, in a listed form and tax, holding directly at least 10 percent for one year without interruption | Certificate of its tax authority, its holding-period declaration, its request not to withhold | By the payment date, then kept |
| Treaty rate: see the treaty | Resident of a treaty State | The Agenzia delle Entrate form | Form timing not covered here |
Source: D.P.R. 600/1973 Arts. 27 and 27-bis; Agenzia delle Entrate treaty forms page, as of 2026.
How does the refund of up to 11/26 work?
Where the S.r.l. withheld in full, a non-resident may reclaim up to 11/26 of the withholding for foreign tax definitively paid on the same profits (Art. 27(3) D.P.R. 600/1973). The proof is a certificate of the foreign tax office. By arithmetic, 11/26 of 26 percent is 11 percent of the dividend, so the share left in Italy is 15 percent.
The refund is not open to holders of savings shares, to EU/EEA pension funds and PEPP sub-accounts, or to the companies and entities of the 1.20 percent comma. Pension funds and sub-accounts of that kind bear 20 percent on profits paid from 12 August 2026, the day D.Lgs. 148/2026 entered into force. The Art. 27 note gives 11 percent before that date.
The Italian office that handles a claim, the form and the time limit were not verified for this guide, so it gives no deadline. A shareholder weighing this route confirms those three points before relying on it, because the refund is claimed after the cash has already been reduced by the withholding.
Who gets the 1.20 percent rate, and does EU or EEA change the answer?
The rate is 1.20 percent, final, for companies and entities subject to corporate income tax in, and resident in, an EU State or a listed EEA State, on holdings not connected with an Italian permanent establishment (Art. 27(3-ter) D.P.R. 600/1973).
Did the rate change in 2026? Not in amount. Art. 11(2) D.L. 38/2026 replaced comma 3-ter at the same 1.20 percent, applicable from 1 January 2026 (Art. 11(5)). The decree entered into force on 28 March 2026 and was converted by L. 22 May 2026 n. 88. Art. 11(3) writes the same rule into the consolidated act on payments and collection, D.Lgs. 24 March 2025 n. 33.
EU against EEA matters here. The listed EEA States are those under Art. 11(4)(c) D.Lgs. 239/1996, which this guide does not reproduce, so it names none. The Parent-Subsidiary route is narrower: EU States only. The provision does not specify the documents the payer keeps for the 1.20 percent rate.
How does the Parent-Subsidiary exemption at source work?
On the parent's request the S.r.l. may apply no withholding at all, but only if the conditions of Art. 27-bis D.P.R. 600/1973 are met and the papers are in hand. The conditions and papers:
- The parent is in a legal form listed in the annex to Directive 90/435/EEC.
- It is subject at home to a listed tax, with no optional or exempting regime.
- It is resident for tax purposes in an EU State, not the wider EEA.
- No treaty with a third State treats it as resident outside the EU.
- It holds directly at least 10 percent, though the article prints 20 percent.
- The holding has run without interruption for at least one year.
- Certificate of its tax authority, its holding declaration and its request not to withhold.
- All papers are in hand by the payment date and kept until the assessment terms expire.
Anti-abuse is built in: Art. 27-bis(5) implements Directive (EU) 2015/121 through Art. 10-bis L. 212/2000, so that abuse-of-law rule applies to the route. A refund after withholding under the same article needs the same documents; its office and time limit were not verified.
How is a treaty rate claimed?
A treaty rate is claimed on the forms of the Agenzia delle Entrate. The unilateral "universal" models come from the Provvedimento of 10 July 2013 and are not agreed with foreign authorities. The agreed forms stay valid for Germany, Portugal, the United Kingdom, the United States, Sweden and Switzerland.
This guide prints no treaty rate, no country table and no form number. Each rate sits in the treaty itself, and a reader should take it from there.
A parent outside the EU, in Switzerland, the United Kingdom or the United States for example, is outside the Parent-Subsidiary route, which Art. 27-bis limits to parents resident in an EU State. The 1.20 percent rate reaches EU and listed EEA companies only. Beyond those, the treaty is where the rate is set. Whichever form is used, the claim rests on the shareholder's residence, so the papers that prove residence come from the shareholder's side, not from the S.r.l.
Need the papers lined up before a payment abroad?
An Italian S.r.l. needs its papers in hand by the payment date. We help you collect and check them; the tax decision stays with you and your advisers.
What must the S.r.l. hold before the first payment abroad?
The payment abroad is a short sequence, but each step has a different actor. The sequence below keeps what the law fixes apart from practice, and names who acts. No statutory term fixes how long a foreign certificate takes.
- The directors draft the bilancio (annual accounts). The members approve it and decide on the distribution within 120 days of year end, or 180 where the deed allows (Civil Code, Art. 2478-bis(1)).
- The directors deposit the approved accounts at the Register within 30 days of approval (Art. 2478-bis(2)); see the bookkeeping an Italian S.r.l. has to keep. This belongs to the same cycle but is not a condition of the payment.
- The shareholder collects the papers its route needs, often from its own tax authority, and the S.r.l. checks them. Exemption papers must be in hand by the payment date.
- The S.r.l. pays and withholds as sostituto d'imposta: 26 percent by default, 1.20 percent, nothing under the exemption at source, or the treaty rate on the form.
- The S.r.l., or its enrolled intermediary, pays the withholding over to the State on form F24 and reports it. The monthly term, the annual return and the certificate to the recipient are not covered here.
- The S.r.l. keeps the file until the assessment terms for the period of payment have expired; the digital archiving page covers keeping records electronically.
- Where the S.r.l. withheld in full, the foreign shareholder claims the refund with its tax office's certificate. The office, form and time limit for the claim were not verified.
How much of 100,000 of profit reaches the shareholder?
No calculator is needed: the arithmetic is below. Take profit of 100,000 before IRES. At 24 percent (Agenzia delle Entrate), IRES is 24,000 and the dividend is 76,000. Table 3 then applies the sourced rates. It is an illustration of those rates, not a separate source, and it leaves out IRAP and any reserve. Read across the dividend row: the same 76,000 reaches the shareholder as 56,240 at the default, 64,600 after the largest refund, 75,088 at 1.20 percent and in full under the exemption at source.
Profit to cash under four routes, in EUR, with the withholding at each rate.
| Step | Non-resident, no relief | After the maximum 11/26 refund | EU/EEA company at 1.20 percent | EU parent, Parent-Subsidiary route |
|---|---|---|---|---|
| Profit before IRES | 100,000 | 100,000 | 100,000 | 100,000 |
| IRES at 24 percent | 24,000 | 24,000 | 24,000 | 24,000 |
| Dividend paid | 76,000 | 76,000 | 76,000 | 76,000 |
| Italian withholding | 19,760 | 11,400 (19,760 less a refund of 8,360) | 912 | 0 |
| Received by the shareholder | 56,240 | 64,600 | 75,088 | 76,000 |
| Italian tax on the 100,000 | 43,760 | 35,400 | 24,912 | 24,000 |
Source: derived from IRES at 24 percent, Art. 3(1) D.L. 66/2014 and Arts. 27 and 27-bis D.P.R. 600/1973, as of 2026.
The refund column holds only where the shareholder proves foreign tax definitively paid on the same dividend of at least 8,360. Interest of 5,000 on a shareholder loan of the same S.r.l. bears 1,300 at 26 percent, and nothing between EU associated companies under Art. 26-quater.
What do royalties, equipment rent, service fees and interest bear?
Withholding tax in Italy on the other payments an S.r.l. makes to non-residents is set mainly by Art. 25 and Art. 26 D.P.R. 600/1973. Table 4 gives the rate and the exemption for each. Payments to staff follow a different regime, covered in TFR in Italy.
Royalties, rent, fees and interest paid to non-residents: rate, exemption and article.
| Payment | Withholding | Exemption | Article |
|---|---|---|---|
| Royalties | 30 percent final on the taxable part of the amount | Directive exemption between associated EU companies, or a treaty | Art. 25; Art. 26-quater |
| Rent for equipment located in Italy | 30 percent final | Payments to an Italian permanent establishment excluded | Art. 25 |
| Fees for services | 30 percent final, business services included | Services performed abroad excluded | Art. 25 |
| Interest | 26 percent final (the comma prints 12.50 percent) | Medium and long-term loans to businesses from EU credit institutions, EU-authorised insurers or supervised foreign institutional investors | Art. 26(5), (5-bis) |
| Interest and royalties between associated EU companies | Nil | 25 percent of voting rights held directly for one year; beneficial owner; arm's-length amount only; residence attestation and declaration | Art. 26-quater |
Source: D.P.R. 600/1973 Arts. 25, 26 and 26-quater; Directive 2003/49/EC, as of 2026.
The Interest and Royalties Directive (2003/49/EC), applied through Art. 26-quater, needs the recipient to be the beneficial owner. Between related parties it covers only the arm's-length amount, and a residence attestation and a declaration must reach the payer by the payment date. Art. 27(3-bis) applies the dividend withholding to excess remuneration on a shareholder loan under Art. 98 TUIR, which this guide does not compute.
Is there a withholding tax on technical services?
The statute has no category called technical services. A fee for services paid to a non-resident bears 30 percent final, business services included, unless the service was performed abroad (Art. 25 D.P.R. 600/1973).
A payment for information on industrial, commercial or scientific experience, known as know-how, is a royalty for the purposes of the Interest and Royalties Directive (Art. 26-quater(3)). So the answer for a technical-assistance fee turns on whether it is a service fee or a know-how royalty. This guide cannot settle that from the statute alone and gives no single rate; the characterisation of a given payment is a question for a conversation. The distinction matters because a service fee bears 30 percent final while a royalty may fall under the Directive exemption between associated EU companies.
What if the shareholder lives in Italy, or the shareholder is an Italian company?
A shareholder who lives in Italy, for example a founder who moves there, bears a 26 percent final withholding on profits paid by the company (Art. 27(1) D.P.R. 600/1973). That answers the question about Italy's tax on dividends for a resident individual.
A dividend received by an Italian company is 95 percent excluded from its income (Art. 89(2) TUIR). The full regime was restored from 1 January 2026 by Art. 11 D.L. 38/2026, which repealed the restrictions of L. 199/2025.
Withholding on other payments to residents is a different regime and is not covered here.
What changed in 2026, and what moves on 1 January 2027?
The dates below run in order, each with the instrument behind it.
1 January 2009. The Parent-Subsidiary holding threshold falls to 10 percent for profits distributed from this date (D.Lgs. 49/2007 Art. 2(2), noted under Art. 27-bis).
1 July 2014. Art. 3(1) D.L. 66/2014 fixes the withholding on Art. 44 TUIR capital income at 26 percent from this date, leaving the printed 27, 12.50 and 20 percent as relics.
1 January 2026 and 28 March 2026. D.L. 38/2026 Art. 11 re-enacts comma 3-ter at 1.20 percent from 1 January 2026 and restores the 95 percent regime. The decree entered into force on 28 March 2026 and became L. 22 May 2026 n. 88.
12 August 2026. D.Lgs. 148/2026 enters into force: EU/EEA pension funds and PEPP sub-accounts bear 20 percent on profits paid from this date, and the text read gave 11 percent before.
31 December 2026. The D.P.R. 600/1973 texts of Arts. 25, 26, 26-quater, 27 and 27-bis cited here end on this date. The rules move to a consolidated act from 1 January 2027, and this guide prints no article number for it.
From our practice
Our tax and compliance team starts from the intended payment date and lists each paper a route needs with the date it must be in hand. A foreign certificate has to exist by the payment date, so when a dividend is declared first, the case moves from an exemption at source to a refund claim. We do not withhold, file or certify for the S.r.l.; the company and its enrolled intermediary do. Federica Conti leads this work.
Sources
The official texts this guide rests on, each with what it supports.
- Art. 3 D.L. 66/2014: the operative 26 percent from 1 July 2014.
- Art. 27 D.P.R. 600/1973: printed 27 percent, the 11/26 refund, 1.20 percent, pension funds, resident individuals.
- Art. 27-bis D.P.R. 600/1973: the Parent-Subsidiary route, the 10 percent threshold, the papers.
- Art. 25 D.P.R. 600/1973: royalties, equipment rent and service fees at 30 percent.
- Art. 26 D.P.R. 600/1973: interest, final withholding and the Art. 26(5-bis) exemption.
- Art. 26-quater D.P.R. 600/1973: the Interest and Royalties Directive exemption.
- Art. 11 D.L. 38/2026: the 2026 re-enactment of the 1.20 percent rate and the 95 percent regime.
- D.Lgs. 148/2026: entry into force on 12 August 2026.
- Art. 89 TUIR: dividends received by an Italian company, 95 percent excluded.
- Agenzia delle Entrate, treaty forms: the unilateral and agreed forms for treaty rates.
- Agenzia delle Entrate, IRES: IRES at 24 percent.
Related services
- Tax advice for a company in Italy: the tax and compliance work around an Italian company. Questions on a payment abroad go through our contact page.
- Codice Fiscale for Foreigners: a foreign shareholder of an S.r.l. needs a codice fiscale.
- Corporate Tax Filing and Bookkeeping in Italy: what the S.r.l. keeps and files.