On 23 March 2019 a new Italy-China agreement to eliminate double taxation was signed in Rome, updating the agreement in force since 1990.
In summary, the agreement provides for
– for dividends, a reduction in the conventional withholding tax rate from 10% to 5%, in the case of direct holdings of at least 25% of the capital of the company paying the dividends, held for a period of at least 365 days. For other dividends, the rate of 10% applies;
– in the case of interest, the rate of withholding tax applicable in the source State may not exceed 10% of the gross amount of interest; a reduced rate of 8% is provided for on interest paid to financial institutions in the case of loans of at least three years’ duration to finance investment projects.