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    The Italian branch/secondary registered office is not a separate legal entity and the parent company is respon- sible for its initiatives, although it is subject to taxation in the foreign country where the economic activity is carried out.
    The definition of permanent establishment (PE) is provided by article 5 of the OECD model tax treaty and by ar- ticle 162 of the Italian tax code (TUIR).

    Representative offices - which are not legal entities of a foreign company in Italy - are characterized by two elements:
    • a local presence to promote the company and its products/services and to perform other non-busi- ness activities;
    • the local unit does not require a permanent representation (it does not represent the foreign company vis-a-vis third parties).

    Local offices must be registered with the Economic and Administrative Index (REA, Repertorio Economico Am- ministrativo) at the Chamber of Commerce, attaching the following documents:
    • if the company is incorporated in an EU country: a certificate indicating the company’s details and the legal representatives of the company issued by the foreign equivalent of the Register of Compa- nies in Italy;
    • if the company is incorporated in a non-EU country: a statement of the existence of the company is- sued by the Italian Embassy in the country where the company has its registered office.

    In any case, documents in foreign languages must be translated into Italian by a sworn translator.

    Tax issues

    If the representative office is used only for the following purposes:
    • storage, display or delivery of goods belonging to the foreign company;
    • purchasing goods or obtaining information for the foreign company;
    • conducting preliminary activities assisting the business activities of the foreign company; it would not be considered a permanent establishment from a tax perspective.

    A representative office is not required to keep books, publish financial statements or file income tax or VAT re- turns. It is, however, required to keep ordinary accounts in order to document the expenses (e.g. personnel costs, office equipment, etc.) to be covered by the foreign company.


    Employers can benefit for a number of incentives aimed at the sustainable inclusion of young people, female workers over 50, disadvantages workers and disable workers in the employment markets. Employment incen- tives are also granted in relation to unemployed and workers who have been drawing of the wage fund guaran- tees. Incentives correspond to a partial exemption or total exemption from social security contributions.


    The social security system provides retirement, survivor and disability pensions, as well as healthcare, unem- ployment benefits and family allowances.

    Benefit amount is generally based on accrued social security contributions and length of service.

    All employees and wage earners, including executives, project-work and self-employed workers are obliged to take part in the Italian social security scheme.

    social security contributions are paid to Italian social security administration (so called "INPS"). Em- ployees can join some pension funds (provided by NCAs) to increase social security benefits;
    •the national work accident insurance institute (so called "INAIL") covers almost all employees for ac- cidents at workplace and occupational diseases.


    The sources of Italian regulatory system for employee representation bodies are twofold: legal and contrac- tual.

    With regards to legal sources, the basic right to establish and join a Trade Union association in the workplace or perform Union activity, is granted to all workers and is protected by a network of anti-discriminatory provisions (Articles 14-17 of Law no. 300/70, i.e. "Workers' Statute"). "Rappresentanze Sindacali Unitarie" (hereinafter RSU) were established by national agreement in 1993 and reformed in 2014. RSUs are formed by a general election among the workforce. The Unions compete in the election and are represented in proportion to the votes they have received.

    Alternatively to take part in the election of RSU, a union can establish its own Rappresentanza Sindacale Uni- taria (RSA).

    Rights and obligations

    Both types of works council, RSA and RSU, are involved in collective bargaining and the verification of the cor- rect application of laws and collective agreements. They exercise information and consultation rights, as laid down both by collective bargaining and by law. They should be consulted on issues such as overtime levels, employment policy, hiring policy or corporate restructuring.


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