Knowing which rate a foreign shareholder is entitled to is half the work. The other half is getting that rate applied. If the paperwork is late, incomplete or addressed to the wrong office, an Italian SRL can lawfully withhold the full 26% on a dividend to a shareholder who was entitled to 5%, 1.2% or nothing. Recovering the difference then takes a refund claim, and refund claims take time.
This guide describes the position applicable on 12 October 2026. It covers the procedure: who applies the relief, which documents are needed and by when, how refunds are claimed and how the payment is reported. Rates are restated only where a worked example needs them. For the full tax picture, read Italian taxes for a foreign-owned company. To see which route a particular shareholder qualifies for, use the Italy dividend withholding tax calculator.
Two routes: relief at source or refund afterwards
Every reduced rate on an Italian outbound dividend can be obtained in one of two ways.
Relief at source.
The Italian company applies the reduced treaty rate, the 1.2% rate or the exemption when it pays the dividend. The shareholder receives the higher net amount straight away. This works only if the company holds complete documentation by the payment date.
Refund afterwards.
The company withholds at the domestic rate of 26% under article 27(3) of DPR 600/1973. The shareholder then claims the excess back from the Agenzia delle Entrate. This route is always available while the deadline is open, but the money comes back months or years later.
The text of article 27(3) still reads "27 per cent", but article 3(1) of Decree-Law 66/2014 set the rate at 26% from 1 July 2014 without amending that text. The rate applied is 26%.
The practical point is who decides. Relief at source is applied by the Italian company. It is not claimed from the tax authority. The Parent-Subsidiary rule in article 27-bis(3) says the paying company may ("possono") refrain from withholding when the conditions are met and the documents are on file. For treaties, the Revenue Agency's English guidance says its forms can be used for direct application of the treaty "when the withholding agent agrees". A careful SRL will not agree on the strength of an email promising that the certificate is on its way.
Who does what: the SRL as withholding agent
The Italian company paying the dividend is the sostituto d'imposta, or withholding agent. In practice it does five things:
- it collects and checks the shareholder's documents before payment;
- it decides which rate to apply and withholds accordingly;
- it pays the withholding to the Treasury with form F24;
- it keeps the documentation for the audit period; and
- it reports the payment and the recipient in its annual withholding agent return, the modello 770.
The shareholder's job is to supply evidence of its residence, its tax status, its holding and its beneficial ownership in good time. If it misses the payment date, its only remedy is the refund claim.
A foreign parent can instruct its Italian subsidiary to pay a dividend, but not to ignore the documentation rules. If the company applies a reduced rate without adequate documents, the shortfall is assessed against the company as withholding agent, with penalties and interest. Directors of the SRL are entitled to insist on the documents first.
The documents, route by route
Treaty relief: Form A and the residence certificate
Italy's treaties usually cap the source-country tax on dividends at 5%, 10% or 15%, depending on the treaty and often on the size of the holding. The procedure is the same whichever treaty applies.
The Revenue Agency's model forms were approved by the Director's measure of 10 July 2013, prot. 2013/84404. For treaty purposes there are four:
| Form | Income |
|---|---|
| Form A | Dividends |
| Form B | Interest |
| Form C | Royalties |
| Form D | Other income |
The same measure also approved two forms for the EU directives: Form E for the Parent-Subsidiary Directive and Form F for the Interest and Royalties Directive.
Form A asks for the details of the Italian company paying the dividend, the financial year, the payment date, the number of shares and the percentage held, and the gross dividend. The beneficial owner then declares four things:
- that it is resident in the treaty country for the relevant tax period;
- that it is the beneficial owner of the dividends;
- that it has no permanent establishment or fixed base in Italy to which the dividends are connected; and
- whether it is subject to tax on those dividends in its country of residence, explaining any exemption.
The form ends with a box in which the foreign tax authority certifies residence under the relevant treaty article and confirms that the declarations are true to the best of its knowledge. A self-declaration of residence is not enough. The certification comes from the foreign tax administration, either on the Italian form or on its own residence certificate where that country issues one.
According to the Revenue Agency, using these forms is not compulsory. They show non-residents what information is required, and taxpayers can adapt them and attach documents. Italy has also kept specific forms agreed with some countries. The Agency's forms page lists Germany, Portugal, the United Kingdom, the United States, Sweden and Switzerland. Where an agreed form exists, use it.
The certification covers a stated tax period. According to the instructions to the forms, for direct application of a treaty the foreign authority's attestation on the form is valid from its date of issue until the end of the tax period shown on it, provided the declared conditions continue to be met throughout that period. Where the foreign authority uses its own certificate, the Agency's FAQ says it must attest residence under the relevant treaty article for the tax period or at the date of issue, and an electronically issued certificate must be verifiable. Check the period shown against the dividend payment date, and do not rely on a certificate for a payment made after that period ends. A new tax year means a new certificate.
The Parent-Subsidiary exemption: Form E or the article 27-bis package
The exemption in article 27-bis of DPR 600/1973 implements Directive 2011/96/EU. Article 5 of the Directive provides that profits distributed by a subsidiary to its parent are exempt from withholding tax. To qualify, the parent must:
- take one of the legal forms listed in the Directive's annex;
- be tax resident in an EU Member State, and not treated as resident outside the EU under a treaty with a third country (EEA residence is not enough);
- be subject to one of the corporate taxes listed in the Directive, without benefiting from an optional or exemption regime that is not limited in territory or time;
- hold a direct holding of at least 10% of the Italian company's capital; and
- have held that holding uninterruptedly for at least one year.
The text of article 27-bis(1) still says 20%. The threshold was reduced to 10% for profits distributed from 1 January 2009 by article 2(2) of Legislative Decree 49/2007, in line with the Directive.
Article 27-bis(2) specifies the evidence. It is a certification from the foreign tax authority that the parent meets the legal-form, residence and subject-to-tax conditions, plus a declaration by the parent that it has held the shares for at least a year. Form E combines both in one document. Under article 27-bis(3), this documentation must be acquired by the payment date if the exemption is to be applied at source. The company must keep it, together with the request, until the assessment period for the year of payment has expired, or until any assessment has been settled.
The 1.2% EU/EEA rate
Article 27(3-ter) applies a 1.2% rate to dividends paid to companies and entities that are subject to corporate income tax in, and resident in, an EU Member State or an EEA state on the Italian white list for exchange of information, on holdings not connected with an Italian permanent establishment. The current wording was substituted by article 11(2) of Decree-Law 38/2026, applying from 1 January 2026. It requires no minimum holding and no minimum holding period. The 5% and €500,000 thresholds briefly introduced by the 2026 Budget Law were repealed with retroactive effect.
No dedicated Revenue Agency form exists for this route. When the reduced rate (then 1.375%) was introduced, the Agency's circular 26/E of 21 May 2009 (paragraph 3) said that the paying company applies the reduced rate only at the shareholder's request, supported by a certification of residence and tax status issued by the shareholder's tax authority, as for article 27-bis. Without that documented request, the ordinary rate or the treaty rate applies. In practice the company also asks for a declaration that the shareholder is the beneficial owner and has no Italian permanent establishment to which the shares relate. Agree the exact package with the company's adviser before the payment date.
The 1.2% rate replaces the 11/26 refund. It is not added to it. Article 27(3) excludes the entities covered by paragraph 3-ter from the partial refund, so an EU company already taxed at 1.2% cannot also claim back up to 11/26 of the withholding.
What if the twelve-month holding period is not yet complete?
This is the most common timing trap for a newly acquired or newly incorporated Italian subsidiary. The Directive allows Member States to require a holding period of up to two years, and Italy requires one. The Revenue Agency's long-standing position (circular 60/E of 2001 and resolution 109/E of 29 July 2005) is that the exemption can be applied at source only if the year is already complete at the payment date; a promise to keep the shares is not enough. The one exception so far concerns companies in the cooperative compliance regime (adempimento collaborativo): in ruling 48 of 25 February 2025 the Agency allowed such a company to pay without withholding before the year was complete, subject to repayment if the holding is not kept. For an ordinary SRL, the general position applies.
If the period is still running when the dividend is paid, the sequence is as follows
- At payment: the company cannot apply the exemption. If the parent qualifies for the 1.2% rate under article 27(3-ter), the company applies 1.2% on the documentation described above. If not, the treaty rate or 26% applies.
- Once twelve months are complete: article 27-bis(1) gives the parent a right, "a richiesta", to a refund of the withholding levied under article 27(3), (3-bis) and (3-ter). The parent claims the tax actually withheld from the Pescara operating centre, using Form E with the foreign tax authority's certification. We have found no Agency guidance on whether the 48-month refund deadline runs from the withholding or from the anniversary of the acquisition, so count it from the date of withholding, which is what the forms' instructions state.
The tax is paid first and recovered later. The Court of Cassation's judgment 23025 of 28 July 2023 concerned exactly this sequence: a parent applied for a refund once the holding period had matured, received it, and was later challenged on substance grounds. If the dividend can wait until the anniversary of the acquisition, paying it after that date avoids the refund procedure altogether.
Refund claims: where, how and by when
When too much tax was withheld, whether because the documents arrived late, the holding period completed afterwards or the company applied 26% as a precaution, the shareholder claims the excess back.
Where.
Claims by non-residents go to the Agenzia delle Entrate - Centro Operativo di Pescara. The Agency's page for non-residents and its English guidance give the address (via Rio Sparto 21, 65129 Pescara) and a dedicated email address for refunds to non-residents.
Deadline.
The claim must be filed within 48 months of the date the tax was withheld, under articles 37 and 38 of DPR 602/1973. Both the Agency's Italian page and the instructions to Forms A to D state this. It is a term of forfeiture: miss it and the refund is lost.
What to include.
According to the Agency, the claim, whether on a form or as a simple application, must contain
- the foreign tax authority's attestation of residence;
- a declaration as to whether the beneficiary has a permanent establishment or fixed base in Italy to which the income relates;
- a declaration that any other specific treaty conditions are met; and
- documentation proving that the tax was actually withheld.
For that last item, the paying company's statement of the gross dividend, the withholding and the payment date is the natural evidence. A shareholder that expects to claim should ask for it at the time of payment.
The partial refund of 11/26.
A separate refund exists for shareholders that are not treaty or Directive cases. Under article 27(3), a non-resident other than a 3-ter company, a pension fund or a savings shareholder can recover up to 11/26 of the withholding, limited to the foreign tax it proves it paid definitively on the same dividend, certified by the foreign tax office. At 26%, 11/26 equals 11% of the gross dividend, leaving 15% of Italian tax. It runs through the same Pescara office. Where a treaty gives a lower rate, the treaty refund is normally the better claim.
Expect scrutiny.
A refund claim is reviewed before any money is paid. It can also be reopened afterwards. In the Cassation case above, the refund was paid after a purely formal check and later contested on substance. Keep the file that supported the claim, because the Agency can come back to it.
Beneficial ownership and anti-abuse: what the Agency looks at
Every treaty rate is limited to the beneficial owner of the dividend, and Form A requires an express declaration to that effect. The Parent-Subsidiary Directive has carried a general anti-abuse rule since Directive (EU) 2015/121. Under article 1(2), benefits are refused to arrangements put in place for the main purpose, or one of the main purposes, of obtaining a tax advantage that defeats the purpose of the Directive and that are not genuine. Italy implements that rule through the general anti-abuse provision in article 10-bis of Law 212/2000, as article 27-bis(5) states.
The Court of Justice addressed the point in the joined Danish beneficial ownership cases, C-116/16 and C-117/16 of 26 February 2019. Member States must refuse Directive benefits in cases of fraud or abuse, even without a specific domestic rule. Indications of abuse include a holding company that passes the dividend on quickly to entities that would not themselves qualify, has negligible taxable income and has no real economic activity of its own.
Some treaties add specific anti-abuse wording. Article 10(10) of the Italy-United States treaty, for example, denies the dividend article if the main purpose, or one of the main purposes, of any person concerned with the creation or assignment of the shares was to take advantage of it.
In practice, the questions to answer before the first dividend are
- Does the recipient company have premises, staff, decision-making and costs in its country of residence that are consistent with its role?
- Is it free to use the dividend, or is it contractually or practically bound to pass it on?
- Who is above it in the chain, and would they qualify for the same relief if they received the dividend directly?
- Does its residence certificate match where its board actually meets and decides?
A holding company that fails these tests is the standard audit target. The paying SRL is exposed as well, because it applied the reduced rate.
Paying the withholding and reporting it
F24 payment.
Withholding on dividends follows a quarterly cycle, unlike most Italian withholdings. The company pays it by the 16th of the month following the calendar quarter in which the dividend was paid: 16 April, 16 July, 16 October and 16 January. The Revenue Agency's deadline calendar lists the code for non-resident recipients: 1036, "ritenute su utili distribuiti a persone fisiche non residenti o a società ed enti con sede legale e amministrativa estere". A deadline falling on a Saturday or public holiday moves to the next working day. An exempt dividend under article 27-bis generates nothing to pay, but it is still reported.
Certification to the shareholder.
The CUPE, the certificate of dividends and equivalent income, is issued by 16 March of the following year. According to the CUPE instructions, it is mandatory for resident recipients whose dividends were not taxed by final withholding. It may also be issued to non-residents whose dividends were subject to final withholding, including at a treaty rate, or covered by article 27-bis. A foreign shareholder that needs evidence for a foreign tax credit or an Italian refund claim should ask for one.
Modello 770.
The company's annual withholding agent return reports the dividends paid during the year. According to the 770/2026 instructions, data on non-residents who received dividends under articles 27, 27-bis and 27-ter go in quadro SK, and quadro SI summarises the dividends paid in the year. The ordinary deadline is 31 October. In 2026 it fell on a Saturday, so the 770/2026, covering dividends paid in 2025, was due on 2 November 2026. Dividends paid during 2026 will be reported in the 770/2027. The Italian SRL tax deadlines calendar places these dates in the company's wider compliance year.
From 1 January 2027 the withholding, payment and refund provisions move into the new consolidated text on payments and collection, Legislative Decree 33/2025, whose start date was deferred from 2026 to 2027 by article 4(4) of Decree-Law 200/2025. Article 27 becomes article 55 (26% in paragraph 4, 1.2% in paragraph 5), article 27-bis becomes article 56, the quarterly payment deadline moves to article 32, and the refund rules in articles 37 and 38 of DPR 602/1973 become articles 75 and 76. The rates and the 48-month term are unchanged by the move. Check the new article references for any dividend paid in 2027.
A worked example
An Italian SRL resolves a dividend and pays €100,000 gross on 20 October 2026. The withholding therefore falls in the fourth quarter. The F24 is due on 16 January 2027, which is a Saturday, so the real deadline is Monday 18 January 2027. Consider five possible shareholders:
| Shareholder and documents | Rate at source | Withheld | Net paid | What happens next |
|---|---|---|---|---|
| Any non-resident, no documents by 20 October | 26% | €26,000 | €74,000 | Refund claim, if entitled, within 48 months |
| German GmbH, 100% held for three years; Form E or article 27-bis certificate and declaration on file | 0% | €0 | €100,000 | Nothing to pay; reported in the 770 |
| German GmbH, 100% acquired seven months ago; residence and corporate tax certificate on file | 1.2% | €1,200 | €98,800 | Refund of €1,200 can be claimed once twelve months are complete |
| US corporation, 30% of the voting stock held for more than twelve months; agreed treaty form and certification on file | 5% | €5,000 | €95,000 | Nothing further |
| Same US corporation, documents arrive in November | 26% | €26,000 | €74,000 | Refund claim for €21,000 (26,000 − 5,000) to Pescara within 48 months |
The US rate comes from article 10(2) of the Italy-United States treaty. It allows 5% for a company that has owned at least 25% of the voting stock for a twelve-month period ending on the date the dividend is declared, and 15% otherwise. The last two rows show the cost of the timing error. The tax is identical in the end, but €21,000 is out of the shareholder's hands for the length of a refund procedure, and recovery depends on a correctly documented claim.
To run the same comparison for a different country, holding size or amount, use the dividend withholding tax calculator. It shows the at-source rate and the refund route side by side.
Checklist before the shareholders' meeting declares a dividend
Work through this list before the resolution, not between the resolution and the bank transfer:
- Identify the recipient precisely. Record the legal entity, its country of residence, its legal form and whether it holds the shares directly. A dividend to a parent's Italian permanent establishment follows different rules entirely.
- Choose the route. Is it the Parent-Subsidiary exemption, the 1.2% rate, a treaty rate or the domestic 26% with a later refund? The calculator is a quick first pass. Then confirm with the treaty text.
- Check the holding and its duration. For article 27-bis, confirm at least 10% held directly and uninterruptedly for twelve months by the payment date. For treaties with holding thresholds, check the percentage, whether it is measured by capital or voting rights, and any minimum period.
- Request the foreign certification early. Foreign tax authorities can take weeks to stamp a form or issue a residence certificate. Use Form A, Form E or the country's agreed form, and check the tax period it covers.
- Collect the declarations. These are beneficial ownership, no Italian permanent establishment, subject-to-tax status and, for article 27-bis, the holding-period declaration.
- Review substance. If the recipient is an intermediate holding company, document why it is the beneficial owner before you rely on it.
- Fix the payment date with the documents in hand. If the certification cannot arrive in time, either delay payment or accept 26% and plan the refund claim.
- Diarise the F24. Note the 16th of the month after the quarter, with code 1036.
- Prepare the evidence pack for the shareholder. This covers the gross amount, the tax withheld, the payment date and, on request, the CUPE. The same file supports the 770 and any refund claim.
- Keep the file. Article 27-bis(3) requires the documents to be kept until the assessment period for the year has expired. The 770 instructions also require any company that paid at a reduced rate or exempt, including under a treaty or at 1.2%, to keep the foreign residence certificate and the supporting documents available to the Agency.
Where to go next
The difficulty is the calendar: the foreign certificate, the holding period and the payment date all have to line up. For the rates and the wider tax position of a foreign-owned company, read Italian taxes for a foreign-owned company. To check that the distributable profit is really there before declaring the dividend, see how to read Italian company accounts. For help choosing an adviser who will handle the documents in English, see finding an English-speaking accountant in Italy.
If your Italian company is about to pay a dividend abroad and you want the documentation and the withholding handled before the payment date, request a quote.
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