Italian lawyers for Pakistani companies in Italy.

The Convention between the Republic of Italy and the Islamic Republic of Pakistan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, was signed in Rome on July 22, 1984, and entered into force in Italy with Law n. 313 of 1989.

The Convention shall apply to persons who are residents of one or both of the Contracting States.

It shall apply to taxes on income imposed on behalf of each Contracting State irrespective of the manner in which they are levied. There shall be regarded as taxes on income all taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable or immovable property and taxes on the total amounts or wages or salaries paid by the enterprises, as well as taxes on capital appreciation.  

The existing taxes to which the Convention shall apply are, in particular, in the case of Italy: the personal income tax (imposta sul reddito delle persone fisiche); the corporate income tax (imposta sul reddito delle persone giuridiche)  whether or not they are collected by withholding at source.

In the case of Pakistan: the income tax; the super tax; surcharge.

The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, the existing taxes by either Contracting State. At the end of each year, the competent authorities of the Contracting States shall notify each other of significant changes which have been made in their respective taxation laws.

For the purposes of the Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State. 

For the purposes of the Convention, the term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

The term "permanent establishment" shall include especially: a place of management; a branch; an office; a factory; a workshop; a mine, a quarry or other place of extraction of natural resources;  permanent sales exhibition; a building site or construction, installation or assembly project or supervisory activities in connection there-with, where such site, project or activity continues for a period of more than 6 months; the furnishing of services, including consultancy services by an enterprise through employees or other personnel, where activities of that nature continue for the same project or a connected project with the country for a period or periods aggregating more than 3 months. 

The term "permanent establishment" shall not be deemed to include: the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise. 

If you need more information or legal assistance in Italy, contact Lawyers in Rome

Please, see also:

Promotion and protection of Pakistani investments in Italy

Special court for foreign companies in Italy