{"id":131082,"date":"2025-10-17T17:54:38","date_gmt":"2025-10-17T15:54:38","guid":{"rendered":"https:\/\/www.we-wealth.com\/?post_type=news&p=131082"},"modified":"2025-10-17T17:54:43","modified_gmt":"2025-10-17T15:54:43","slug":"taxation-of-foreign-dividends-how-it-works-for-residents-in-italy","status":"publish","type":"news","link":"https:\/\/www.we-wealth.com\/en\/news\/taxation-of-foreign-dividends-how-it-works-for-residents-in-italy","title":{"rendered":"Taxation of foreign dividends: how it works for residents in Italy"},"content":{"rendered":"\n
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Taxation of foreign dividends for residents in Italy: tax rates, tax credits and information on international agreements.


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Taxpayers resident in Italy who receive dividends from foreign companies<\/strong> (foreign dividends) are subject to a complex taxation system involving three levels of regulation:<\/p>\n\n\n\n

\u2022 Italian regulations<\/strong> (country of residence of the recipient);<\/p>\n\n\n\n

\u2022 Foreign regulations<\/strong> (country of origin of the income);<\/p>\n\n\n\n

\u2022 International double taxation<\/strong> agreements signed by Italy.<\/p>\n\n\n\n

Taxation of foreign dividends<\/h2>\n\n\n\n

Dividends from foreign companies (not resident in countries with preferential tax regimes) are generally subject to double taxation.<\/p>\n\n\n\n

Foreign withholding tax<\/h3>\n\n\n\n

The foreign country may apply a withholding tax<\/strong>, the rate of which varies according to local legislation and treaty agreements.<\/p>\n\n\n\n

Example<\/strong>:<\/p>\n\n\n\n

Switzerland<\/strong> applies a withholding tax of 35%<\/strong>, which can be reduced to 15%<\/strong> thanks to the agreement with Italy. If a higher amount is withheld, the taxpayer can request a refund, although the procedure is often complex.<\/p>\n\n\n\n

Taxation in Italy<\/h3>\n\n\n\n

Foreign dividends are subject to a substitute tax of 26%<\/strong>. However, the tax base changes depending on the method of collection:<\/p>\n\n\n\n

\u2022 With a resident intermediary<\/strong> (e.g. Italian bank):<\/p>\n\n\n\n

The tax is applied to the net amount, i.e. the amount already reduced by the foreign withholding tax.<\/p>\n\n\n\n

\u2022 Without a resident intermediary<\/strong> (e.g. credit to a foreign account):<\/p>\n\n\n\n

The dividend must be declared in the Income Tax Return<\/strong> (formerly Unico<\/strong>) and the tax is applied to the entire gross amount, without the possibility of deducting the foreign withholding tax. This may result in a higher tax burden.<\/p>\n\n\n\n

Tax credit: the latest from the Court of Cassation<\/h2>\n\n\n\n

Article 165 of the Italian Tax Code (Tuir) provides for the recognition of tax credits for taxes paid abroad only if:<\/p>\n\n\n\n