Italy Accounting & Tax Glossary

The bilancio d'esercizio is the annual accounts of an Italian company. The shareholders approve it within 120 days of year-end, or within 180 days where the bylaws give a reason, and it is deposited at the Registro Imprese within 30 days of approval.

The modello F24 is the payment form Italian taxpayers use to pay IRES, IRAP, IVA, withholding tax and INPS contributions to the Agenzia delle Entrate and INPS.

The partita IVA is the 11-digit Italian VAT number. The codice fiscale has 11 digits for companies and 16 alphanumeric characters for people. The codice destinatario used for e-invoicing has 7 characters.

The Sistema di Interscambio (SDI) is the Agenzia delle Entrate platform through which every Italian e-invoice travels. E-invoicing through SDI is mandatory for every partita IVA holder, including forfettari. An invoice legally exists only once it has been transmitted to SDI.

The SRL (società a responsabilità limitata) is the default Italian company form. Share capital can be as low as €1, and below €10,000 it must be paid in full in cash. The SRLS (SRL semplificata) is open to natural persons only.

The Certificazione Unica (CU) is the annual statement a withholding agent gives recipients and the Agenzia delle Entrate by 16 March. The Modello 770 is the annual summary of withholding taxes, due by 31 October.

INPS (Istituto Nazionale della Previdenza Sociale) runs Italian social security. For employees, the FPLD contribution is 33.00% of gross pay in total, of which 9.19% is the employee share.

IRAP (Imposta Regionale sulle Attività Produttive) is a regional tax on net production value (valore della produzione netta). The ordinary rate is 3.90%, and each region may vary it by up to 0.92 percentage points.

IRES (Imposta sul Reddito delle Società) is the national corporate income tax paid by Italian companies. The rate is 24% of taxable profit. Companies also pay IRAP, a separate regional tax, so the total burden is higher than 24%.

The regime forfetario is a flat-rate regime for Italian sole traders and professionals. It taxes a fixed share of revenue at a 15% substitute tax, or 5% for the first five years of a new activity, with no IVA charged and no IRAP.

IVA (Imposta sul Valore Aggiunto) is Italian VAT. The ordinary rate is 22%, with reduced rates of 10%, 5% and 4%. It is paid through the modello F24.

The LIPE (Comunicazione delle Liquidazioni Periodiche IVA) is a quarterly communication of periodic IVA settlements sent to the Agenzia delle Entrate. It is due even when no IVA is payable.