Property Tax Consultants

Business and tax consulting for real estate/business purchase in Italy

Italy’s thriving and continuous tourist flows attract countless foreign companies Interested in investing in the hospitality business purchasing one, or more, of the country’s many valued and profitable commercial properties. To pursue their aim, i.e. setting up and running an Italy-based commercial business in the field of accommodation, these legal entities are required to comply with Italian and EU legislation. The first issue to deal with is establishing a corporate structure which will, later, be in charge of taking over the property’s management, and/or providing market research, and/or creating a startup. 

Being able to count on trustworthy advisory services, efficient fiscal assistance and reliable legal corporate consultancy on-site is crucial. Firstly because the prospective corporate purchaser will need to acquire all essential information, address the bureaucratic requirements, and be cognizant about taxation. As concerns taxation foreign corporate companies should bear in mind the 1990 EU Mother-Daughter Directive, that is to say the European Union Parent Subsidiary Regime. Designed to eliminate tax obstacles in the area of profit distributions between groups of companies in the EU, i.e. between parent companies and subsidiaries based in different EU states. 

Allowing for a tax exemption for dividends settled to the parent companies by their subsidiaries the Directive aims to remove the risk of double taxation. In the case of Italy businesses may apply for exemption from Italian taxation on dividends and other financing devices that Italy-based subsidiary companies hand over to their parent companies based in other EU member states, or claim a refund if the tax is withheld.

Companies which purchase a commercial property such as a Hotel, Bed&Breakfast, Farm Holiday Property (Agriturismo) or Holiday Home are required to incorporate a business or company which must be ruled according to current Italianlegislation and rules. Among the many existing Italian corporate structures the most commonly established to manage and administer a hospitality business are the SRL (Limited Liability Company), the SAS and the Ditta Individuale (Personal Company). 

Establishing an SRL, acronym of Societa a Responsabilita Limitata, i.e. limited liability company implies having no limit to the number of shareholders and that the partners’ liability is limited to the amount contributed.

Italian tax consultant

The SAS, acronym of Societa Semplice in Accomandita, translates as “simple convenience company. This corporate structure allows for an unlimited number of shareholders, no minimum initial capital and no limits on partners’ responsibility. The Ditta Individuale, DI, is a business with a sole proprietor. This type of company can be founded even without initial capital or assets but the possessor’s personal assets will be held as a guarantee in case of debts.

An individual entrepreneur intending to open a Bed&Breakfast in Italy presents and excellent, and exhaustive, example of how the Italian corporate and fiscal legislation in the hospitality field work.

Step 1) The investor is required to establish his/her Personal Company (Ditta Individuale)
The company’s opening must be carried out within 30 days prior to the commencement date of the activity (rental/guest arrival). The Ateco (Classification of Economic Activities) code to be used in this specific case is 55.23.5 and relates to the activities of “Guest houses for short stays, holiday homes and apartments, bed and breakfasts and residences”.
In addition to this the owner is required to register with the Business Register of the Chamber of Commerce as well as the related communications.

Step 2) The proprietor is required to submit the SCIA application.
Prior to commencing the business activity owners are required to present the SCIA (Certified Start of Activity Report) to the municipality. This entails visiting the one-stop shop for production activities (SUAP) and provide the required documentation, which must comprise:

  • The owner’s ID and tax code
  • The property’s location
  • The number of beds and their distribution
  • Detailed information on toilets available for the guests
  • Any complementary services offered

Step 3) Communication of guests to the authorities
The owner (or landlord) of a property providing accommodation is compulsorily required to monitor and communicate guests’ data to the public security authorities. This communication is mandatory for all stays less than 30 days long. The mandatory procedure implies registering the property on the State Police Housing Service portal, selecting the Police Headquarters designated for the area and requesting the forms necessary to enable the facility for the service. It is usually possible to download the needed forms from the State Police’s website, and follow the online procedure ( subject to vary depending on the location of the Police Headquarters) to submit the forms.
Once the documentation has been correctly processed the owner will be sent his/her credentials to access the portal and, from then on, will be able to forward all communications related to guests’ permanence directly via the internet. Stays over 30 days are differently monitored and registered. Generally these longer stays imply a rental agreement to be registered in advance directly with the Italian Revenue Agency ( Agenzia delle Entrate). The form to be used is the RLI form. Further to submission the Revenue Agency is in charge of transmitting the purchase data to the Italian Ministry of the Interior.

Our Services

As the above example proves knowing one’s way through the legal and fiscal requirements, and bureaucratic issues, of setting up and running a hospitality business in Italy is at once vital and not necessarily straightforward. 

IRECOM is your Italian property tax consultant. Our extensive and long-practiced expertise in the fields of commercial property consultancy, legal and fiscal advisory service and property management enable us to provide prospective entrepreneurs and corporate companies with proficient all-round advice, reliable information and trustworthy assistance every step of the way.

What we can provide:

  • business plan ad hoc to establish to most suitable commercial entity;
  • due Diligence of the property and Legal Due Diligence of the business if the purchasers intends to buy a standing business;
  • full assistance in establishing the startup, including tutoring on the use of the necessary software required for electronic invoicing,brand design and creation, website creation and web marketing services;
  • all-round legal assistance for foreign companies wishing to establish an Italy-based branch to run the hospitality business, including transfer pricing, relocation of employees from the parent company, dealing with needed VISAs, advisory consulting on payrolls and salaries;

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