Tax treaty between Italy and Canada.

Legal advice by Italian lawyers for Canadians in Italy.

Tax treaty between Italy and Canada.









The Convention between Canada and Italy for the avoidance of double taxation with respect to taxes on income and the prevention of fiscal evasion, was signed in Ottawa on June 3, 2002 and it entered into force in Italy with Law No. 42 of 2011.

The Convention shall apply to persons who are residents of one or both of the Contracting States.

The Convention shall apply to taxes on income imposed on behalf of each Contracting State, irrespective of the manner in which they are levied.

There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

The existing taxes to which the Convention shall apply are, in particular, in the case of Canada: the taxes on income imposed by the Government of Canada under the Income Tax Act (hereinafter referred to as "Canadian tax"); in the case of Italy: the individual income tax (imposta sul reddito delle persone fisiche); the corporate income tax (imposta sul reddito delle persone giuridiche); the regional tax on productive activities (imposta regionale sulle attivitá produttive), even when deducted at source; (hereinafter referred to as "Italian tax").

The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes which have been made in their respective taxation laws.

The Convention shall not apply to taxes (even when deducted at source) payable on lottery winnings, on premiums other than those on securities, and on winnings from games of chance or skill, competitions and betting.

For the purposes of the Convention, the term resident of a Contracting State means any person who, under the laws of that State, is liable to taxation therein by reason of the person's domicile, residence, place of management or any other criterion of a similar nature but does not include any person who is liable to tax in that State in respect only of income from sources in that State.

For the purposes of the Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. The term "permanent establishment" shall include especially: a place of management; a branch; an office; a factory; a workshop; a mine, an oil or gas well, a quarry or any other place of exploration for or exploitation of natural resources; a building site or construction or installation project only if it lasts for more than 12 months.

Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

The term "immovable property" shall have the meaning which it has for the purposes of the relevant tax law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry as well as rights to which the provisions of general law respecting landed property apply. Usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources shall also be deemed to be "immovable property". Ships and aircraft shall not be regarded as immovable property.

The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

For more information, please contact Lawyers in Italy.

See also:

Italian lawyers for Canadian citizens in Italy

Attorneys for Canadian companies in Italy

Treaty between Canada and Italy on Mutual Assistance in Criminal Matters