With Response No. 117/2025, the Italian Revenue Agency clarified the tax treatment applicable to fees paid by an Italian company to a Spanish counterpart for the rental of commercial equipment – specifically, crates and pallets used for the transportation of fruit and vegetable products.
Subject of the inquiry
In the case analyzed, the Italian company had entered into a contract with Beta S.L., based in Spain, for the temporary provision of equipment.
The agreed fee included a rental charge, a deposit, and an additional surcharge in case of prolonged non-use of the equipment.
The question of the applicant
The issue presented to the Revenue Agency concerned the correct rate to be applied, as withholding tax, on the rental fees paid. Specifically, the Italian company asked whether the following should apply:
- The withholding tax of 30%, as provided by Article 25 of the Presidential Decree No. 600 of September 29, 1973, for fees related to the use or granting of industrial, commercial, or scientific equipment located within Italian territory;
- Taxation in Spain on the entire amount of the fees, as provided by the Double Taxation Treaty between Italy and Spain under Article 7;
- A reduced withholding tax of 8%, as provided by Article 12 of the treaty, for fees related to the leasing of commercial equipment.
The Agency’s response
The Revenue Agency confirmed that:
- Payments made for the leasing of equipment fall under the definition of “royalties,” as defined both by Italian legislation and the international treaty;
- If the conditions are met, it is possible to apply the reduced withholding tax of 8%, pursuant to Article 12, paragraph 2, letter b) of the Convention;
- This benefit is subject to two essential requirements:
- the Spanish company is the actual beneficiary of the fees;
- there is no permanent establishment of the company in Italian territory.
The Revenue Agency also reminded that the application of the reduced rate is an option – not an obligation – for the Italian withholding agent, as already clarified in previous administrative documents.
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