{
  "url": "https://openlegislation.uk/double-taxation-relief-taxes-on-income-italy-order-1990/note",
  "json_url": "https://openlegislation.uk/double-taxation-relief-taxes-on-income-italy-order-1990/note.json",
  "legislation": "uksi/1990/2590",
  "legislation_title": "The Double Taxation Relief (Taxes on Income) (Italy) Order 1990",
  "legislation_url": "https://openlegislation.uk/double-taxation-relief-taxes-on-income-italy-order-1990",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This Note is not part of the Order)\nThe Convention with Italy set out in the Schedule to this Order (“the new Convention”) replaces the Convention signed on 4th July 1960 and set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Italy) Order 1962 (S.I. 1962/2787), as amended by the Protocol signed on 28th April 1969 and set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Italy) Order 1973 (S.I. 1973/1763).\nThe new Convention provides for business profits not arising through a permanent establishment to be taxed only in the country of the taxpayer’s residence. Profits attributable to a permanent establishment may be taxed in the country in which the permanent establishment is situated (Articles 5 and 7). Shipping and air transport profits are to be taxed only in the country in which the place of effective management is situated (Article 8). The new Convention includes rules for determining taxable profits when a company in one country is related to a company in the other (Article 9).\nThe Dividends Article (Article 10) takes account of the imputation systems of company taxation in the United Kingdom and Italy. Where a company resident in one country pays a dividend to a company resident in the other country which controls 10 per cent or more of its voting power, the company receiving the dividend will be entitled to a tax credit equal to one half of the tax credit which would be payable to an individual resident in the other country less a sum of not more than 5 per cent of the aggregate amount of the dividend and the half tax credit. Where the recipient is an individual or a company controlling less than 10 per cent of the voting power of the paying company, the tax credit payable will be equal to the tax credit which would be payable to an individual resident in the other country less a sum not exceeding 15 per cent of the aggregate of the dividend and the tax credit. The Article provides that entitlement to the tax credit may be withdrawn where the recipient of a dividend cannot show, if required to do so, that the shareholding in question was acquired for bona fide commercial reasons or in the ordinary course of making or managing investments and it was not the main object nor one of the main objects of that acquisition to obtain entitlement to the tax credit.\nIn general, interest (Article 11) may be taxed in the country in which it arises, but the rate will be limited to 10 per cent where the beneficial owner of the interest is a resident of the other country. For various categories of interest (eg where the interest is paid by the Government of the source country) the country of source will exempt from tax interest paid to a resident of the other country.\nThe rate of tax on royalties in the source country is not to exceed 8 per cent of the gross amount flowing to the other country (Article 12).\nIncome from immovable property and gains derived from such property may be taxed in the country in which the property is situated (Articles 6 and 13).\nThe earnings of temporary business visitors are, subject to certain conditions, to be taxed only in the country of the taxpayer’s residence (Articles 14 and 15). Fees received by a resident of one country in his capacity as a director of a company resident in the other may be taxed in the latter country (Article 16). Income derived from the activities of artistes and athletes may be taxed in the country in which these activities are exercised (Article 17). The remuneration of visiting teachers (Article 20) and certain payments made to visiting students and business apprentices are, in general, to be exempt from tax in the country visited (Article 21).\nGovernment service salaries and pensions are normally to be taxed by the paying government only (Article 19) while other pensions are to be taxed only in the country of the taxpayer’s residence (Article 18).\nSpecial rules are included to cover income and profits from activities connected with offshore oil and gas exploration or exploitation (Article 23). Trading profits arising from such activities are normally deemed to arise through a permanent establishment or a fixed base and may therefore be taxed in the country in which the activities are carried on. Employees are, in general, to be taxed only in the country in which the employment is exercised.\nWhere income continues to be taxable in both countries, relief from double taxation will be given by the country of the taxpayer’s residence in respect of tax imposed by the other country (Article 24). In the case of dividends, the United Kingdom will give credit for underlying tax paid in Italy if the United Kingdom company receiving the dividends owns at least 10 per cent of the capital in the Italian company.\nThere are provisions safeguarding nationals and enterprises of one country against discriminatory taxation in the other country (Article 25) and for consultation and exchange of information between the taxation authorities of the two countries (Articles 26 and 27).\nThe new Convention will enter into force thirty days after the date on which instruments of ratification are exchanged and will have effect, in the case of shipping and air transport profits for taxable periods beginning on or after 1st January 1974 (under the Exchange of Notes) and, in all other cases, in the calendar year next following that in which the instruments of ratification are exchanged (Article 30). The date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes .",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1990/2590/note",
    "retrieved_at": "2026-10-29T14:54:16.855161+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}