Italian Taxation of Hidden Permanent Establishments

Autore: Piergiorgio Valente

The Italian Income Tax Code (Testo Unico delle imposte sul reddito, or TUIR) in article 162 defines permanent establishment as a ‘‘permanent place of business by means of which the non-resident enterprise entirely or partially exercises its activity on the State’s territory.’’ That definition is similar to the one provided by article 5 of the OECD model tax treaty. Therefore, for there to be a fixed place of business, the following aspects must exist:
– a permanent structure (premises, materials, equipment, and machinery);
– the carrying out of an economic activity by means of the said structure; and
– functional independence regarding its parent company.


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