Introduction
Opening an Italian S.r.l. does not only mean limiting liability.
It also means entering a tax and accounting system that is more structured than an individual Partita IVA.
Understanding how an Italian S.r.l. is taxed and which accounting obligations it entails is essential to avoid mistakes and to correctly plan costs.
Tax regime of the Italian S.r.l.
An Italian S.r.l. is subject to autonomous taxation, separate from that of its shareholders.
The income produced by the company is taxed directly at the level of the Italian S.r.l., regardless of any withdrawals made by the shareholders.
The main taxes are two:
- IRES
- IRAP
IRES: corporate income tax
IRES is the main tax levied on the income of an Italian S.r.l.
Key characteristics:
- fixed rate of 24%
- applied to net profit
- profit is calculated as the difference between:
- revenues
- deductible costs
Taxation applies regardless of profit distribution to shareholders.
Even if profits remain within the company, IRES is still due.
IRAP: regional tax
In addition to IRES, the Italian S.r.l. is also subject to IRAP.
Main elements:
- variable rate, set at the regional level (usually 3,9%)
- applied to the value of production
- not the same as taxable profit
IRAP follows a different logic from IRES and taxes the company’s productive capacity rather than income in the strict sense.
Two-level taxation
An important mechanism to understand is the two-level system:
Taxation at company level:
- IRES
- IRAP
Taxation at shareholder level, only if:
- profits are distributed
This means that:
- the Italian S.r.l. pays taxes on its income
- shareholders pay taxes only when they receive dividends
Taxation of distributed profits
When an Italian S.r.l. distributes profits to shareholders, dividend taxation applies.
The tax treatment depends on:
- the type of shareholder
- the percentage of participation
Taxation may occur:
- through withholding at source
- or through proportional taxation at the shareholder level
In any case, dividend taxation is separate from company taxation.
Accounting obligations of the Italian S.r.l.
From an accounting perspective, the Italian S.r.l. has no simplified regimes.
The following are always mandatory:
- ordinary accounting
- preparation of annual financial statements
Annual financial statements
Each year, the Italian S.r.l. must prepare annual financial statements in accordance with Italian OIC accounting standards.
The financial statements are intended to correctly represent:
- the equity position
- the financial position
- the economic result of the financial year
They are a central tool for:
- the Italian Tax Authority
- shareholders
- third parties (banks, suppliers, investors)
Italian OIC accounting standards
Financial statements must comply with the principles issued by the Italian Accounting Organization (OIC).
These principles ensure:
- clarity
- truthfulness
- correctness
The financial statements must faithfully represent the company’s economic reality.
Reporting obligations
In addition to bookkeeping and financial statements, the Italian S.r.l. is subject to:
- periodic tax returns
- VAT obligations
- the Italian “Modello Redditi SC”
Reporting obligations follow precise rules and strict deadlines under Italian law.
Conclusion
From a tax and accounting perspective, the Italian S.r.l. is a complete but demanding structure.
It offers:
- autonomous taxation
- separation between company and shareholders
- planning tools
But it requires:
- ordinary accounting
- annual financial statements
- accurate tax management
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