The new income tax agreement between China and Italy was enacted on 19 February 2025.
Signed on 23 March 2019, it replaces the 1986 treaty between China and Italy.
The agreement aims to eliminate double taxation on income and prevent tax evasion and avoidance between the two countries.
The treaty covers Chinese income and enterprise taxes and Italian personal, corporate, and regional taxes on productive activities.
Withholding tax rates vary based on the type of payment: dividends are taxed at 5% if the recipient company holds at least 25% of the payer’s capital for 365 days; otherwise, 10%; interest is taxed at 10%, reduced to 8% for loans over three years financing investment projects, and royalties are taxed at 5%.
The treaty takes effect on 1 January 2026.
Earlier, Italy ratified a new tax treaty with China on 3 December 2024, following its reapproval by the Italian Senate on 11 September 2024.
