Withholding taxes are taxes paid not by the
recipient of a payment but by the payer. The payer deducts the tax directly
"at source" and pays it over to the State. Withholding taxes are
governed by Presidential Decree (DPR) No. 600/1973 and apply to wages, fees,
commissions, dividends and investment income.
The principle: the withholding agent
Anyone who deducts tax at source becomes a withholding agent (sostituto
d'imposta). These are primarily companies, freelancers, institutions and
public authorities – but not private individuals.
The withholding agent has three obligations:
- to deduct the tax at the time of payment
- to pay it over to the State by the relevant deadline
- to certify and report the deduction
Example: A freelancer invoices €1,000 in
fees. The company withholds 20% (€ 200), transfers €800 to the freelancer and
pays €200 to the State.
Payment on account or final withholding?
Italian law distinguishes between two forms:
- Payment on account (ritenuta d'acconto): the deduction is an advance against the tax subsequently due. The recipient declares the income in their tax return and offsets the deduction against it. This may result in either a credit or a remaining balance to pay.
- Final withholding (ritenuta a titolo d'imposta): the deduction is definitive. The income is taxed once and for all.
The main withholding tax rates
| Type of payment |
Rate |
Form |
| Wages and salaries |
IRPEF bands (23% / 33% / 43%) plus regional and municipal surtax |
Payment on account |
| Fees paid to freelancers (except under the flat-rate regime) |
20% |
Payment on account |
| Commissions paid to commercial agents |
23% on either 20% or 50% of the commission |
Payment on account |
| Dividends paid to private individuals |
26% |
Final withholding |
| Interest and investment income (in most cases) |
26% |
Final withholding |
| Remuneration paid to non-resident self-employed persons for work carried out in Italy |
30% |
Final withholding |
For cross-border payments, double taxation
agreements may reduce the rate or assign the right to tax entirely to the state
of residence. This generally requires the foreign recipient to provide a
certificate of residence.
Payment and deadlines
The amounts withheld are paid electronically
using form F24, generally by the 16th day of the following month. If the 16th
falls on a Saturday, Sunday or public holiday, the deadline moves to the next
working day.
Reporting obligations
Alongside the payment itself, there are two
annual reporting obligations:
- Single Certification (Certificazione Unica, CU): a certificate issued to the recipient and filed with the Revenue Agency, generally by mid-March.
- Withholding tax return, form 770: the withholding agent's summary return, generally by the end of October.
What happens if something goes wrong?
Where withholding tax is paid late or not at
all, administrative penalties and interest on arrears may be imposed; larger
sums may also carry criminal implications. Through voluntary correction (ravvedimento
operoso), failures can be put right retrospectively at a reduced penalty.