Dormant companies in Italy will be paying a higher corporate tax rate in 2012 as per the new Italian tax law. Companies that can be considered ‘dormant’ will have to pay 38% corporate income tax (IRES) tax rate next year compared to the current rate of 27.5%.

1. Income Tax Hike for Dormant Companies in Italy
(Sunnyvale, CA) - Dormant companies in Italy will be paying a higher corporate tax rate in 2012 as per the new
Italian tax law. Companies that can be considered ‘dormant’ will have to pay 38% corporate income tax (IRES)
tax rate next year compared to the current rate of 27.5%.
The corporate income tax increase however, will not affect Unlimited Liability Companies (ULC) or personal
companies.
The law also extends the ‘dormant’ discipline to companies facing financial losses for three consecutive years.
Tax rates for dormant companies in Italy
Companies are considered as ‘dormant’ when their regular revenues are lower than the following balance sheet
items:
•2% for shares or other participating instruments and financial credits;
•6% for real estate assets (reduced to 5% for office buildings or 4% for buildings purchased during the
same year of application);
•15% for all other tangible and intangible fixedassets.
E.g., If a company owns an office building valued € 500.000,00, minimum revenues should be € 25.000,00 (or
the 5% of € 500.000,00). If actual revenues are € 18.000,00, the company is considered a “dormant” company
(unless the company applies for seeking exemption from these provisions).
Income Tax Pre-Payments
The new tax rates would need to be considered while calculating income tax pre-payments due for 2012 or the
year following the effective date of September 17th, 2011.
Please call or email for advice on tax deductions related to dormant companies in Italy.
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