A subsidiary company is a company that is owned or controlled by the holding, which is also called the parent company. However, the subsidiary company remains an independent and separate entity from the parent company. The subsidiary can be a corporation, and in most cases it is a limited liability company.

The articles of corporation must be established by public deed and our tax department will draft them for your company and will arrange an appointment with the notary for certification.

The articles of corporation

The articles of corporation must contain the following data: The personal data of each stockholder The corporate name containing the reference to the limited liability company The municipality of the registered office of the company The business that constitutes the company’s purpose The amount of subscribed capital stock (not lower than €10,000) and the amount of paid-up capital stock The stockholding of each stockholder The corporate governance rules , indicating the management of and powers to represent the company The person entrusted with the management of the company and the person, if any, entrusted with the statutory accounting audit The holding company is typically the primary and sole holder of stocks belonging to the subsidiary company. As the sole stockholder, the holding company makes decisions such as the election and appointment of the board of directors in the subsidiary company.

The costs of establishing a limited liability company are between €7,000 and €9,000.

In a subsidiary limited liability company only the holding company is liable for the corporate obligations through its capital stock .

Management of the company

The management of the company is entrusted to one or more stockholders . When the management of the company is entrusted to several persons, they form the Board of Directors . It is also advisable to appoint one or more corporate officers in charge of making the daily business decisions.

The corporation is subject to the corporate tax IRES. 24 % of the taxable income form the tax liabilities.

Relationship between subsidiary and holding

To eliminate double taxation, the directive 96/2011 UE provides to determinate the taxes in such a way: The dividends distributed from the subsidiary to the holding company are exempt from taxation if certain conditions are present. One necessary condition is that the holdings capital includes a minimum holding of 20%. In the other cases, all taxes paid by the subsidiary can be deduced from the parent company’s tax obligation.

In addition to the IRES tax, the companies have also to pay the IRAP, which is a regional tax. (In South Tyrol the rate is 2,98% calculated on the following tax base : income+ personnel expense + interests)

Intra-community commerce of goods and services

The accountant of the relationship between the subsidiary and the holding company is quite simple because they are two separate legal entities. All operations between these companies have to be documented in an invoice and both companies have to communicate the inter-community sales and purchases. (in Italy the communication is called Intrastat) When two companies are required to transact with each other, a transfer price is used to determine costs. The transfer price should not differ substantially from the market price to ensure fair competition.

Opening a bank account

To pay tax liabilities, every subsidiary needs a bank account in Italy . To open an account in Italy, the bank requires the data of the “ actual account owner ”. This is the owner of the holding company.

If you want to launch a company with long relations in Italy we suggest to establish a subsidiary.

Setting up a subsidiary in Italy

FAQ

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Tax form F24 (ital.: Modello F24)

The F24 tax form in Italy is the standardised, summary payment form used to pay almost all important taxes, social security contributions and other levies to the state, regions, municipalities and social security institutions. Anyone who is economically active in Italy – whether as an entrepreneur, freelancer, employer or private individual – can hardly avoid using the F24 payment form.

For entrepreneurs and freelancers, the F24 payment form is used in particular to pay value added tax (VAT), income tax (IRPEF), corporation tax (IRES), regional value added tax (IRAP) and various substitute taxes. Employers use it to pay the withheld wage tax (IRPEF) and social security contributions to the welfare institution INPS/NISF and accident insurance contributions to the accident insurance office INAIL. Private individuals also use the F24 payment form, for example to pay property tax (IMU/GIS) or to settle instalments from tax assessments.

What is the F24 tax form?

The F24 tax form is a standardised payment form. It is used to combine payments to various public authorities and clearly assign them to a specific tax or levy.

A particularly practical feature of the F24 is that it allows several taxes and contributions to be paid in a single transaction. For example, wage tax, INPS contributions, VAT and property tax can all be paid at the same time on a single maturity, expiration date – provided that the tax code, reference year and amounts are entered correctly.

The F24 form is therefore a central instrument in the Italian tax and levy system, comparable to a collective payment receipt for different types of taxes.

What is the F24 form used for?

The F24 is used to process almost all relevant payments to the state, regions, municipalities and social security institutions. These include in particular:

State taxes

Value added tax (Italian: IVA)
Income tax for natural persons (Italian: IRPEF)
Corporation tax (Italian: IRES)
Regional value added tax (Italian: IRAP)
Wage taxes
Withholding taxes on fees

Regional and municipal taxes

Property tax (Italian: IMU)
Other local taxes, depending on the municipality or region

Social security contributions

Contributions to the state pension and social security scheme (Italian: INPS)
Contributions to accident insurance (Italian: INAIL)
Contributions to bilateral bodies, health or pension funds

Penalties, interest and instalment payments

Late payment penalties and interest on arrears
Instalment payments from tax assessments or settlements
Other subsequent payment obligations to the tax authorities

Who uses the F24 tax form?

Companies and freelancers

Monthly or quarterly VAT payments
Advance and balance payments of IRPEF/IRES/IRAP
Other direct taxes (e.g. IMU/GIS, certain substitute taxes)

Employer

IRPEF wage tax withheld
Social security contributions to INPS/NISF
Contributions to INAIL
Contributions to bilateral bodies, health and pension funds

Private individuals without VAT number

Property tax IMU/GIS
Certain registration and stamp taxes
Instalment payments from tax assessments or settlements

Central importance of the F24 in the Italian tax system

The F24 form plays a central role for several reasons:

a) Uniform form for all
All taxable individuals use the same form – from private property owners to multinational companies. This ensures structured processes, facilitates processing by banks and authorities, and reduces formal errors.

b) Offsetting tax credits
A particular advantage is that tax credits can be offset directly in the form against taxes and contributions that have reached their maturity or expiration date. Examples:

Value added tax credits
Income or corporation tax credits
Credits from social security contributions

This function improves liquidity and reduces bureaucratic effort.

c) Electronic submission (telematic transmission)
Companies and freelancers with a VAT number (Italian: partita IVA) must generally submit their F24 payments electronically, for example via:

the revenue agency's online services or
the bank's online banking service

This facilitates payment allocation, reduces data entry errors and enables better traceability.

Private individuals without a VAT number can still make certain payments in paper form at the bank or post office, but are increasingly using online banking or Chartered Accountants.

It should be noted that not all Italian banks support the electronic transmission of the F24 form, which may lead to difficulties in some cases (often at branches of major international banks).

Types of F24 tax form

In practice, there are several different types:

F24 ordinario (standard form): The "classic" F24 payment form for the state, regions, municipalities and many contributions. It also allows tax credits to be offset against tax liabilities.
F24 semplificato (simplified form): A simplified, usually one-page version, especially for local taxes such as IMU and other municipal taxes.
F24 "Elide" – with identification features (Elementi identificativi): Used when additional information is required, e.g. contract numbers, identification of a specific rental or leasing agreement or a property.
F24 Accise (for excise duties): Special variant for excise duties on energy products, alcohol, etc.

Maturity dates

As the F24 tax form is used for a wide range of taxes and contributions, there are different due dates. As a general rule:

Monthly maturity dates

Many taxes and contributions paid via F24 have their maturity on the 16th of the following month.

Monthly VAT payments
Wage tax and withholding tax on fees
Social security contributions to the pension and social security fund (INPS)

Quarterly maturity dates

VAT payments generally mature on the 16th of the second month after the end of the quarter (16 May, 16 August, 16 November).

Annual maturity dates

Income tax: 30 June (balance and 1st advance payment) & 30 November (2nd advance payment)
Corporation tax and regional value added tax: same dates
Property tax: 16 June and 16 December

If the 16th falls on a Saturday, Sunday or public holiday, the deadline is postponed to the next working day.

Common tax codes (selection)

Each tax or levy has its own tax code. The complete list of these codes is continuously updated by the tax authorities and is very extensive.

The form is divided into different sections. Below is a description of these sections, as well as the most frequently used codes (*).

Accounting:

Codes (*)	Description	Section
6001 – 6012 6031 – 6033 6035 6099	Monthly VAT liability from January to December Quarterly VAT liability from 1st - 3rd quarter VAT advance payment debt VAT liability or credit from the annual VAT declaration	I - Treasury
1040	Withholding tax liability	I - Treasury
2003 2001 - 2002	Corporation tax Ires - balance payment Corporation tax Ires - 1st and 2nd advance payment	I - Treasury
4001 4033 - 4034	Income tax Irpef - balance payment Income tax Irpef - 1st or 2nd advance payment	I - Treasury
4041 4044 - 4045	Property tax IVIE on real estate abroad - balance payment Property tax IVIE on real estate abroad - 1st or 2nd advance payment	I - Treasury
4043 4047 - 4048	IVAFE wealth tax on financial assets abroad - balance payment IVAFE wealth tax on financial assets abroad - 1st or 2nd advance payment	I - Treasury
1792 1790 - 1791	Substitute tax flat tax regime (regime forfettario) - balance payment Substitute tax flat tax regime (regime forfettario) - 1st or 2nd advance payment	I - Treasury
1842 1840	Flat tax (Cedolare Secca) on rental income - balance payment Flat-rate tax (Cedolare Secca) on rental income - 1st and 2nd advance payments	I - Treasury
2501	Virtual stamp duty	I - Treasury
AF AP	Fixed INPS contributions for artisans Variable INPS contributions for artisans	II – INPS/NISF
CF CP	Fixed INPS contributions for merchants Variable INPS contributions for merchants	II – INPS/NISF
P10	INPS contributions for professionals under separate management - pension holders	II – INPS/NISF
PXX	INPS contributions for professionals under separate management - non-pensioners	II – INPS/NISF
LAA	INPS contributions - special management (CD, CM, IA)	II – INPS/NISF
3800 3812 - 3813	Value added tax Irap - balance payment Value added tax Irap - 1st and 2nd advance payment	III - Regions
3801	Regional supplementary tax - balance payment	III - Regions
3844 3843	Municipal supplementary tax - balance payment Municipal supplementary tax - advance payment	IV – Local taxes
3850	Annual chamber of Commerce fee dept	IV – Local taxes
3912 - 3930	IMU / GIS debt	IV – Local taxes
E065	Debt for contributions to the Agronomists' Fund (EPAP)	V - Other insurance contributions
E066 - E068	Debt for contributions to the Industrial Experts Fund (EPPI)	V - Other insurance contributions
E085 - E090	Contributions owed to the Engineers and Architects Fund (Inarcassa)	V - Other insurance contributions
E100 - E107	Debt contributions to the Lawyers' Fund (Cassa Forense)	V - Other insurance contributions

Payroll:

Codes (*)	Description	Section
1001	Taxes Income tax (IRPEF)	I - Treasury
1012	Tax on severance pay (TFR)	I - Treasury
1701	Tax reduction “trattamento integrativo” This code normally represents a credit, as the employer pays the amount via payroll and subsequently offsets it in the F24 form.	I - Treasury
1704	Additional allowance (“Somma integrativa”) This code normally represents a credit, as the employer pays the amount via payroll and subsequently offsets it in the F24 form.	I - Treasury
1712/1713	Tax on revaluation of severance pay (TFR) Advance payment (1712) due 16 December; balance payment (1713) due 16 February each year.	I - Treasury
6781	Payroll tax credit (IRPEF credit)	I - Treasury
DM10	Social security contributions Social security contributions (INPS/NISF) Employee contributions (total contributions borne by employee and employer)	II – INPS
DMRA	Back payment of INPS contributions	II – INPS
DMRP	Offset of excess INPS contributions paid	II – INPS
C10	INPS contributions for directors - ordinary contribution	II – INPS
CXX	INPS contributions for directors - reduced contribution	II – INPS
MET1	Health funds / Bilateral funds Health Fund “Metasalute” for employees under the Metal Industry collective agreement	II – INPS
EST1	Health Fund “Fondo EST” for employees under the Commerce and Services collective agreement	II – INPS
QUAS	Health Fund “Quas” for employees classified as “Quadro” under the Commerce and Services collective agreement	II – INPS
ASSP	Health Fund “CadiProf” for employees under the Professional Services collective agreement	II – INPS
EBNA	Bilateral body for artisans for employees under artisan collective agreements in the Province of Bolzano	II – INPS
3802	Regional surtax the abbreviation of the respective region is indicated in the left column	III - Regions
3847/3848	Municipal surtax the abbreviation of the respective municipality is indicated in the left column	IV – Local taxes
P	Accident insurance premium (INAIL) paid annually by 16 February or upon opening a new risk classification	V – Other insurance contributions
COLL	Pension fund Laborfonds and Raiffeisenfonds settlements are made quarterly	V – Other insurance contributions

Frequently asked questions (FAQ)

1. What is the F24 tax form used for?
In Italy, the F24 is used to process almost all important payments to the state and other public authorities: taxes (e.g. income tax IRPEF, corporation tax IRES, regional value added tax IRAP, VAT), social security contributions (INPS/NISF), accident insurance (INAIL), property tax IMU/GIS and numerous municipal and regional taxes.

2. How is the F24 tax form structured?
The F24 form comprises:

a header section with the taxable person's details (tax number, VAT number if applicable, name/company name, address),
a section for bank details and payment method, and
several sections for the state, social security, regions, municipalities and other institutions.

The individual lines use tax codes, reference years and amounts to identify the respective taxes and contributions precisely. This allows multiple payments to be combined in a single form.

3. Who has to submit the F24 electronically?
Entrepreneurs and freelancers with a VAT number must always submit their F24 payments electronically (telematically) via the revenue agency or bank. Private individuals without a VAT number are only required to submit electronically in certain cases, for example when tax credits are offset or certain tax codes are used.

4. When is the F24 due?
Monthly payments via F24 are due on the 16th day of the following month (e.g. wage tax and social security contributions for October → 16 November). Quarterly VAT payments are usually due on the 16th of the second month after the end of the quarter. If the maturity date falls on a weekend or public holiday, the maturity date is postponed to the next working day.

5. What happens in the event of late payment?
Late payments are subject to penalties and interest on arrears. In many cases, missed payments can be made up for via the "voluntary late payment" system, whereby penalties can be reduced if the correction is made early.

6. Can tax credits be offset against the F24?
Yes. Offsetting tax credits against taxes due is one of the main advantages of the F24. However, this requires correct entries and, if necessary, certain notifications to the revenue agency.

7. Can a submitted F24 form be corrected?
If an F24 form is submitted with errors (e.g. incorrect tax code or incorrect reference year), it is not usually possible to simply cancel it. Corrections are made via an official procedure at the revenue agency and should ideally be carried out with the assistance of a tax specialist.

Source: https://www.graber-partner.com/en/lexicon/50-tax-form-f24-ital-modello-f24.html

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