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Payments from non-resident companies to models and testimonials for photo shooting are treated as self-employment income

The Italian Revenue Agency clarifies that the income that celebrities receive for photo shooting sessions are considered self-employment income.

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According to the Italian Revenue Agency, the salary paid to those who carry out the profession of model for photo shooting sessions and the salary paid for the related rights to use the image constitute self-employment income under article 53 paragraph 1 of the TUIR in the presence of the usual and professional requirements required by the Italian law. Being non-resident, the territoriality principle must be identified according to article 23 paragraph 1, lett. D) TUIR from the place of employment.

Classification of the compensation

With reference to the salary paid for the rights to use the image, the Italian Revenue Agency has recalled the answer to the tax ruling no 139 published on 3rd March 2021 according to which, for territorial purposes, it is necessary to have regard to the place where the artistic or professional activity where incomes are related, that is Italy. According to the Revenue Agency, such compensation also qualifies as self-employment income, since, although not strictly attributable to the activity of a singer, actor or influencer, it is, however, linked to it. In fact, this type of remuneration relating to image rights constitutes self-employment incomes under Article 54 paragraph 1-quater of TUIR.

Tax implication

Therefore, it would fall within what provided under Article 25 paragraph 2 of DPR 600/73 resulting in a 30% withholding tax, but non-resident companies and institutions that provide income subject to withholding tax in Italy, although included among the entities that qualify as tax substitutes, are, in principle, objectively excluded by reason of the territorial delimitation of the tax authority of the State.

Therefore, if the non-resident company does not have a permanent establishment in Italy, it will not be required to apply any withholdings on the amounts paid to non-resident models and testimonials.

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Regulatory Framework

Testo Unico delle Imposte sui Redditi (TUIR), n. 197/1986

Reference (Italian only)

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