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1、?This edition anticipates a new institutional mission in Vietnam and Singapore and reiterates the CNDCECs commitment in the field of internationalisation,to promote and strengthen the acquisition of useful(and I would say,indispensable)expertise and experience for supporting our clients today.The pr
2、oduction and financial processes of business activities occur today in increasingly globalised and complex contexts and require not only interdisciplinary expertise,but also the ability to integrate knowledge of models and opportunities present in other markets.The new National Council,formed on 1 J
3、une,have the firm intention to pursue and strengthen activities associated with internationalisation through a wide programme of specialist training with targeted missions.A specific Observatory has been set up which will involve the participation of major institutions,consolidating past experiences
4、 of fruitful collaboration,which will carry out research and draw up documentation dedicated to different segments and sectors of interest to our profession.We work in a context that is seeing an increase in business risk,digitalisation,the drive towards sustainability and the interlapping of differ
5、ent legislations that requires us to be,as always,able to give precise and useful responses.I am,therefore,confident that this publication and the associated mission,about to get under way,will provide concrete and necessary help for numerous colleagues.Elbano de NuccioPresident of the Consiglio Naz
6、ionale dei Dottori Commercialisti e degli Esperti ContabiliISBN 978-88-99517-35-9 Copyright Fondazione Nazionale dei Commercialisti.Edited by Fondazione Nazionale dei Commercialisti.Thanks to Intesa Sanpaolo for the collaboration and support.We thank Dezan Shira&Associates for the precious contribut
7、ions provided in relation to information on the Vietnam and Singapore Economic Systems.Thanks for the support:Printed in November 2022.5Italy Singapore VietnamTable of ContentsTable of ContentsPresentation 9THE ITALIAN ECONOMIC SYSTEM 131.Country presentation 151.1.Form of government 151.2.The Parli
8、ament 151.3.The Government 161.4.The Judiciary 171.5.Language and currency 181.6.Economic Outlook 182.Starting a business activity in Italy 252.1.The representative office 252.2.The permanent establishment 262.3.Incorporating a company 283.The taxation system 343.1.IRES 343.2.IRAP 363.3.IRPEF 363.4.
9、IVA(VAT)374.Labour relations in the market 385.Forms of incentives and support to investors and enterprises 415.1.Innovative start-ups and SMEs 415.2.Tax credit for investments in capital goods 425.3.Tax credit for investments in the South of Italy and Special Economic Zones(“ZES”)435.4.Aid for Econ
10、omic Growth(so-called“ACE”)455.5.Tax credit for research and development 455.6.Capital Goods “Nuova Sabatini financing”tool 476Italy Singapore VietnamTable of Contents5.7.Patent box 475.8.Ecobonus and Sisma bonus 485.9.Guarantee fund for SMEs access to credit 495.10.European Funds 495.11.Other incen
11、tives and concessions 496.A number of customs issues:“origin”and free trade agreements 506.1.Preferential and non-preferential origin 516.2.Free trade agreements 53SINGAPORES ECONOMIC SYSTEM 551.Country presentation 571.1.The political system 571.2.The legal system 581.3.The economic system 591.4.Th
12、e banking system 601.5.The flag and the currency 601.6.Singapore in ASEAN 611.7.Economic relations with Italy 611.8.The protection of intellectual property 632.Starting a business in Singapore 642.1.Private companies limited by shares 642.2.Branch 652.3.Representative offices 672.4.Variable Capital
13、Companies 683.The taxation system 703.1.Corporate income tax 703.2.Individual income tax 723.3.Goods and services tax(GST)733.4.Withholding and other taxes 743.5.Audit and fulfilments 757Italy Singapore VietnamTable of Contents4.The labour market 794.1.Employment Law 794.2.Employment contracts 814.3
14、.Visas and work permits 834.4.Termination of the employment contract 845.Forms of incentives and support for investors and enterprises 865.1.Government Agencies and the reference sectors 865.2.Progressive Wage Credit Scheme(PWCS)875.3.Start-up tax exemption(SUTE)885.4.Partial Tax Exemption (PTE)885.
15、5.Loans for enterprises the Financing Scheme-Trade loan,the Financing Scheme-Project loan and the Temporary Bridging loan 885.6.Loans for SMEs:SME working capital loan and SME fixed assets loan 895.7.The Venture Debt loan and the Merger and Acquisition loan 905.8.The 100%investment allowance scheme
16、915.9.The Enterprise Development grant(EDG)915.10.The Pioneer Certificate Incentive(PC)and the Development and Expansion Incentive(DEI)925.11.Further incentives:digital transformation and post COVID-19 926.Free trade agreements and Singapores strategy 946.1.The free trade agreement between the EU an
17、d Singapore 976.2.Rules of origin 996.3.Proof of origin 100VIETNAMS ECONOMIC SYSTEM 1011.Country presentation 1031.1.Political framework 1031.2.The legal system 1041.3.Language,currency and religion 1051.4.Dati economici e finanziari 1061.5.The banking system 1091.6.Industrial production 1098Italy S
18、ingapore VietnamTable of Contents2.Starting a business activity in Vietnam 1122.1.The representative office 1122.2.The branch 1122.3.La societ 1132.4.Joint ventures 1132.5.International cooperation agreements(Public Private Partnerships PPP)1142.6.The main requirements for setting up a company 1143.
19、The taxation system 1173.1.Vietnams principal taxes 1173.2.Accounting and the keeping of accounting records 1193.3.The Road Map to the IFRS 1233.4.The IFRS in Vietnam 1254.The labour market 1264.1.How to hire staff?1264.2.Types of visas 1274.3.Employment contracts in Vietnam 1304.4.Tax obligations f
20、or company employees 1325.Forms of incentive and support for investors and enterprises 1365.1.Concessions for sectors 1365.2.Concessions for location 1365.3.Concessions for projects 1376.Free trade agreements and Vietnams strategy 1386.1.The free trade agreement between the EU and Vietnam 1406.2.Rul
21、es of origin 1426.3.Proof of origin 1439Italy Singapore VietnamPresentationPresentationDear Colleagues,The ongoing transformation of world trade,as well as the delicate international rela-tions that underpin it,are before our eyes,and not just as from today.As parties involved in this change,we,as a
22、ccountants,cannot choose to ignore the causes and consequenc-es.The role that we have,in providing daily and multidisciplinary support to our numer-ous business clients,obliges us to be experts also with regards to international dynamics.Just considering what has happened in the last four years,and
23、in the last two in par-ticular,should be sufficient to realise how many complex changes there have been,and still are in progress,especially for smaller,less structured enterprises less expert in rela-tions with foreign countries:first the“tariffs war”,then Brexit,and immediately after that the pand
24、emic have completely rewritten the rules of trade,generating also a huge push towards e-commerce which,at times,is completely improvised and uncontrolled,and therefore terribly dangerous if not managed with awareness and competence.Subsequently,after the darkest Covid-19 period,and finally an econom
25、ic recovery,there has been an increase in prices which has seen,among things,a doubling of the cost of sea freight rates and a lengthening in average sea transport times,resulting in a first rethinking of inventory management and of the“just in time”model that has long dominated business strategies.
26、Finally,the recent war and occupation of a number of Ukrainian territories by Russian military forces,with the consequent restrictive measures taken in various countries,in-cluding the European Union,have completely shattered those trade balances that we had been accustomed to for around a couple of
27、 decades.These introductory thoughts clearly show the close correlation between foreign trade and geopolitics,and we are operators called upon to“handle”,if not always to“guide”,the imposed change,assuming an even more delicate role than in the past.The global value chain,very often transferred to d
28、ifferent countries due to previous delocalisation strategies,is today turning towards“re-shoring”or“friend-shoring”in order to bring pro-duction phases closer together and to limit the risks of the current uncertain situation.In all of this,we are well aware of the fundamental importance of our role
29、 and it is a commitment on the“front line”.Larger,better structured companies,while not immune to the risks deriving from the above-described phenomena,are able to face difficulties with greater autonomy,while smaller businesses,by virtue of their structure,do not the same possibilities and are ofte
30、n on the lookout for help,especially with regards to the international context,also in terms of import/export operations to be carried out.Also,10Italy Singapore VietnamPresentationand perhaps especially,with regards to this situation,the support requested of us takes on a delicate and important asp
31、ect.Our national economy is based,for a third,on the value of exports and numerous Italian SME clients are appreciated at international level for their formidable transfor-mation capacity;it is increasingly clear,therefore,how the support that professionals can provide also to the growth,in terms of
32、 both structure and exported value,of these smaller firms becomes fundamental for the entire national economic system.The growth,in terms of expertise,of these small businesses occurs also with the contribution that the AICEC seeks to provide to professionals through its initiatives that aim at diss
33、eminating the culture of internationalisation in order to increase the level of knowledge necessary to deal with foreign countries,both in terms of product placement and with reference to markets for procurement.In the current geographical scenario in which the countries in the ASEAN area play a fun
34、damental role in terms of their populations and commercial opportunities,standing in first place among geographical destinations for global exports,we have chosen to concentrate our attention on Vietnam and Singapore,for the characteristics that these two territories possess and for the enormous opp
35、ortunities for growth in commercial exchanges.From exports to setting up business abroad,passing through the various intermediate phases of the complex process of internationalisation,the contribution of us account-ants,natural interlocutors operating in the internationalisation sector,today conside
36、red a particularly precious asset in the entire system,remains decisive.It is also for this reason that we sincerely thank the Embassies and the entire Italian diplomatic network system abroad that has always supported us in our initiatives,granting patronage to our missions and intervening in first
37、 person to testify to the efficiency of the Italian Economic System in supporting Italian enterprises interested in relations with foreign counterpar-ties.Obtaining this important consideration on the part of institutions supporting the in-ternationalisation of enterprises and professionals was one
38、of the initial objectives char-acterising the operation of AICEC and of the entire CNDCEC.All this has been possible thanks to the seriousness and competence with which we have worked up to now and will continue to do so in order to provide the necessary information to concretely sup-port our enterp
39、rises in their approach to foreign markets.It should also be pointed out that this has been possible also,and especially,thanks to your strong participation and initiatives,which have been,and remain,a continuous stimulus in offering training and authoritative information,as well as a challenge to s
40、eek to provide expertise which is appropriate to the changes in progress.11Italy Singapore VietnamPresentationIn wishing you profitable reading,I offer my most sincere thanks.Giovanni Gerardo ParentePresident A.I.C.E.C.Associazione Internazionalizzazione Commercialisti ed EspertiContabili(the Italia
41、n Professional Association of Chartered Accountants)The Italian Economic System15Italy Singapore VietnamItaly-1.Country presentation1.Country presentation1.1.Form of governmentThe Italian State is a parliamentary republic based on the principle of the separation of powers:legislative power is attrib
42、uted to Parliament,the representative body of the popular will,while executive power is attributed to the Government,which operates on the basis of a vote of confidence received from the legislative body,and judicial power is exercised by the Judiciary,an autonomous system independent of any other p
43、ower.Apart from,and above,the traditional powers of the state there is the President of the Republic,the highest office of the State and representative of national unity,who is elected by Parliament in a joint session of its members.The President of the Republic is a monocratic,impartial and super p
44、artes constitution-al body to whom specific and predetermined prerogatives are attributed,aimed essen-tially at guaranteeing a balance of,and separation between,the other powers of the state and of safeguarding the Constitution,which represents the fundamental and supreme law of the Italian State.Mo
45、re specifically,the Constitution,in its first twelve articles,establishes the funda-mental principles of the Italian Republic;in the first Part,it identifies the rights and duties of citizens in the context of ethical-social relations and,in the second Part,regu-lates the organization of the Republi
46、c,that is,the bodies of which it is composed,local authorities,as well as,finally,constitutional guarantees.Having stated the above,the main characteristics of the bodies to which the Constitu-tion attributes the three fundamental powers of the state are outlined below.1.2.The ParliamentParliament i
47、s a constitutional body,representing the political will of electors and is subdivided into two chambers(so-called perfect bicameralism):the Chamber of Deputies and the Senate of the Republic,which differ in the age limit required to vote and to stand,the number of members and the presence,in the Sen
48、ate,of non-elected members.The traditional and prevalent function of Parliament is legislative and is exercised by the Chambers collectively,through a law approval process that requires the perfect 16Italy Singapore VietnamItaly-1.Country presentationmatching of the will of both branches of Parliame
49、nt and,hence,approval of an identical text of law on the part of the two Chambers.All laws,after having received parliamentary approval,must be promulgated by the President of the Republic who,in his capacity as guarantor of the Constitution,can,in the event of formal or substantial flaws in the act
50、 approved by Parliament,send back the text to the Chambers with a motivated message,requesting a review;due to the principle of the separation of powers,the President,in all events,has no right of veto,since if the text of law is newly approved by the Chambers,to which,as has been said,are attribute
51、d legislative power,the President is obliged to promulgate the law.After promulgation,the law is published in the Official Gazette of the Italian Republic,which represents the official source of knowledge of the laws in force in Italy;once 15 days have elapsed from publication,(a term which,if provi
52、ded for in the same law,can be greater or lesser),the law enters into force.1.3.The GovernmentThe Government is the constitutional body that exercises executive power and is composed of the Prime Minister,appointed by the President of the Republic,and by the ministers similarly appointed by the latt
53、er,on the proposal of the Prime Minister and placed in charge of determined administrative structures which together form the Council of Ministers,the is,the Cabinet.Within ten days from its formation,every government must obtain the approval of the two Chambers,that is,a so-called vote of confidenc
54、e,which must continue for the entire duration of office;if,in fact,during the legislature,the relationship of confidence between the legislative power and the executive one is withdrawn,the Government is obliged to resign from office.The executive function is exercised by the Government through the
55、identification,im-plementation and coordination of national political,economic and financial policies;the Government,moreover,is attributed the role of representing the interests of the Italian State in the international context(so-called foreign policy),as well as in the European context,in which a
56、 representative of the Government participates in the Council of the European Union,its decision-making body.The Government is attributed the power to issue regulations which constitute a sec-ondary source of law through which it can implement and integrate legislative pro-visions,regulate the organ
57、isation of public administrations and,generally,regulate on matters that the Constitution does not reserve exclusively to Parliament.17Italy Singapore VietnamItaly-1.Country presentationThe Government can also exercise the legislative function traditionally attributed to Parliament in two cases prov
58、ided for and strictly regulated by the Constitution.The first is when Parliament itself assigns the Government the power to issue acts hav-ing the force of law,so-called legislative decrees,on the basis of a specific delegated law that establishes the guiding principles and criteria that the Governm
59、ent has to follow,the term within which the proxy has to be exercised and its specific subject matter.The second case,on the other hand,permits the Government,in extraordinary cases of necessity and urgency that require an immediate legislative intervention,to adopt provisional acts with the force o
60、f law autonomously and under its own responsibility,so-called decree laws that must be converted into law by Parliament within the following sixty days,on penalty of the loss of effectiveness right from their emanation.In any case,in the event of failed conversion,the Chambers can regulate,with a sp
61、ecif-ic law,juridical relations arising on the basis of the unconverted law decree.1.4.The JudiciaryJudicial power is attributed to the Judiciary,which is the series of bodies that exercise the judicial function in a position of impartiality with respect to the other powers of the state.Jurisdiction
62、 is either ordinary(civil and criminal)or special(administrative,accounting and military)and,subject to exceptions and particular choices of court proceedings,is based on three degrees of judgement.The instrument for implementing the judicial function is the fair trial,in relation to which the Const
63、itution identifies,as fundamental principles,the impartiality of the judge,the conduct of cross-examination between the parties in conditions of parity,as well as its reasonable duration.The jurisdictional function is exercised by ordinary magistrates appointed and regulat-ed by the rules of the jud
64、iciary.In order to ensure the impartiality and autonomy of the judiciary,the Constitution attributes to a specific body,the Consiglio superiore della magistratura(Judicial Council)exclusive power with reference to the designation of appointments,transfers,promo-tions and disciplinary measures regard
65、ing magistrates.18Italy Singapore VietnamItaly-1.Country presentation1.5.Language and currencyThe official language of the Italian Republic is Italian.On 1 January 2002 Italy and 11 other European Union member States introduced bank-notes and coins in euros to replace the respective national currenc
66、ies of each country;today the euro is the official currency of 19 of the 27 member countries of the EU which together constitute the euro area,officially referred to as the euro zone.1.6.Economic Outlook1.6.1.The economic situationAfter the downturn in 2020 following the pandemic emergency,the Itali
67、an GDP re-bounded strongly in 2021 and is expected to grow also in 2022.The post-pandemic growth trend has,however,changed during the year following the increase in interest rates de-cided by the central banks in order to mitigate inflationary pressures that had already started to appear in the USA
68、and in Europe at the end of 2021.According to the International Monetary Fund(World Economic Outlook,October 2022),in 2023 the Italian economy will return into recession and the GDP will fall by 0.2%against a growth in the euro area of 0.5%.The FMIs forecasts for Italy in 2023 contrast with those re
69、ported by the Italian government(September 2022)in the Nadef 2022(Update of the Economic and Financial Document 2021)in which a GDP growth of 0.6%is expected.19Italy Singapore VietnamItaly-1.Country presentationGraph 1.Real GDP trend(values with respect to the year of reference 2015).Years 2007-2025
70、1,5%-1,0%-5,3%1,7%0,7%-3,0%-1,8%0,0%0,8%1,3%1,7%0,9%0,5%-9,0%6,7%3,3%0,6%1,8%1,5%20072008200920000022*2023*2024*2025*Finance Ministry(Mef)forecasts(September 2022)Source:FNC analysis of Istat(National Statistics Institute)and Mef dataThe main cause of the
71、trend reversal in progress is the impact of the energy crisis com-bined with supply-side bottlenecks in relation to the growing demand for raw materials and specific intermediate inputs(such as semi-conductors)which have become essential for global production chains.The strong recovery in global tra
72、de in 2021,followed by the gradual overcoming of the pandemic emergency in the USA and Europe continued also in the first part of 2022,leading to the first serious supply bottlenecks,and a first significant energy crisis.The Russia-Ukraine war that broke out in the spring of 2022,together with the p
73、ersistence of the pandemic in Asia,led to further supply bottlenecks and an even deeper energy crisis.The inversion in the economic trend was immediately detected through business confi-dence indicators.In particular,the trend of the composite index of SME purchasing man-agers revealed a change in t
74、he economic climate already in the second half of 2021.The index,in fact,after having reached the highest level since the start of the pandemic in May 2021,began to gradually fall.The last survey of October 2022 records the lowest level of the last 20 months.In line with the growth in GDP in the fir
75、st part of 2022 and,most of all,thanks to the strong growth in 2021,employment reached very high levels,exceeding the threshold of 23 million at the end of the second quarter of 2022 and leading to an employment rate of 60.2%.At the same time,due also to the weak dynamics of the labour market,the un
76、em-ployment rate fell to 8.1%,the lowest level of the last ten years.20Italy Singapore VietnamItaly-1.Country presentationHousehold consumption,after the strong recovery in 2021,further increased in the first half of 2022.The financial situation of Italian families has remained solid.At the begin-ni
77、ng of 2022,household debt was equal to 64.2%of available income,a much lower level than the average for the euro area(97.7%).The recovery and the rise in demand are clearly visible also in the credit trend thanks to the acceleration of loans to businesses and the resilience of loans granted to famil
78、ies.The formation of an accumulation of savings for Italian families during the acute phase of the pandemic emergency in 2000 and 2021,together with the solidity of Italian house-hold finances,has led to an increase in the demand for loans for the acquisition of real estate.Investments,which also gr
79、ew in the first part of 2022,have been held up mainly by the expenditure in constructions supported by the tax concessions introduced in 2020.In the second half of 2022,the ratio of investments to GDP reached 21%.Graph 2.Fixed gross investments as a percentage of GDP.Values at current prices.Years 2
80、,7%21,3%20,1%20,0%19,7%18,3%17,2%16,7%16,9%17,2%17,5%17,8%18,0%17,9%20,0%200720082009200001920202021Source:FNC analysis of Istat dataInflation of the harmonized index of consumer prices in the euro-zone has risen grad-ually until reaching 10%in September 20
81、22 with peaks above 20%in Estonia,Latvia,Lith-uania and Hungary,while in Italy(9.4%)inflation is slightly below the EU average(9.9%).The rise in inflation is showing no signs of abatement in the USA(8.2%)despite the heavy increases in interest rates set by the American FED starting from March 2022.2
82、1Italy Singapore VietnamItaly-1.Country presentationIn line with the strong recovery in world trade,in 2021 Italys trade balance was posi-tive for 44.2 billion euros,but was down compared to 2020 and,most of all,compared to 2019.In the first half of 2022,the trade balance became negative.The cause i
83、s the energy sector,excluding which the balance would be positive.The reason is the prices of energy materials,which are generating a significant increase in the value of imports.With regards to the currency,the strong asymmetry between the USA and Europe has led to a decisive increase in the value
84、of the dollar against the euro which,in the first eight months of 2022,lost 11%of its value.1.6.2.The political situationTo face the pandemic emergency,in 2020 governments and central banks immedi-ately adopted strongly expansive economic policies aimed at supporting the incomes,consumption and liqu
85、idity of businesses.In 2021 and,especially in 2022,faced with the worsening of the energy crisis and the increase in inflation,governments introduced new policies directed at businesses and families primarily in order to mitigate the effects of inflation.During 2020,to deal with the devastating impa
86、ct of the pandemic on GDP,the Euro-pean Union launched Next Generation Eu(NGEU),an intervention of 750 billion euros intended to integrate the EUs 2021-2027 budget.To face the energy crisis caused by the Russia-Ukraine war,in 2022 the EU launched REPowerEU,an intervention of 300 billion euros.In ord
87、er to support the post-covid economic recovery,the Italian government has fo-cused its efforts on the NRRP,the National Recovery and Resilience Plan,approved in 2021,which draws most of its resources from the NGEU and which amounts overall to 235 billion euros.The main strategic lines and objectives
88、 defined in the NRRP are:digitalisation,innovation,competitiveness,culture;green revolution and ecological transition;infrastructures for sustainable mobility;education and research;inclusion and cohesion;health.Besides the financial measures aimed at fostering important economic investments,the NRR
89、P also provides for a series of reforms of significant strategic value for the imple-mentation of the plan itself.Among the most important are the reform of the public ad-ministration,the justice system,legislative and bureaucratic simplification,the plan for 22Italy Singapore VietnamItaly-1.Country
90、 presentationthe promotion of competition and a series of sectorial reforms structured within the sin-gle objectives.In addition,there are a number of accompanying reforms such as that of the tax system and for the extension and strengthening of the social safety nets system.There are,instead,three
91、strategic goals pursued by the EU through the REPowerEU:energy-savings;diversification of supplies;expansion of renewable energy sources.The plan forms part of the European Green Deal,already a cornerstone of the NGEU,and plans for the ecological transition also through the need to gradually reduce
92、energy dependence on Russia as a result of the conflict in Ukraine.RePowerEU has been conceived as an additional chapter of the single national RRPs and,following the logic of the Recovery and Resilience Facility,is broken down into single investment plans and legislative reforms of the system.1.6.3
93、.Economic outlookEven respecting all the objectives provided for in the NRRP and despite their improving impact on economic growth forecasts,the government,taking account of the inversion in the general economic trend and of the risks of recession in 2023,has revised down GDP growth for 2023,most of
94、 all as a result of the decidedly negative impact of new forecasts on the trend of a number of external variables such as exports and foreign demand,which will undergo a significant deceleration in 2023 to then rapidly recover in the 2024-2025 two-year period.Besides foreign demand,the price of petr
95、oleum and gas and the increase in interest rates in progress also have a negative effect on economic growth.In the forecasts updated in September 2022,the government expects a GDP growth of+0.6%against a previous forecast,made in April 2022,of+2.4%.The change in the new economic situation is,therefo
96、re,particularly negative and equal,overall,to-1.7 percent.The positive boost of the NRRP is,therefore,not sufficient on its own,since the effect of the variables associated with the Russia-Ukraine crisis is decidedly greater and decisive.In addition to this,as already mentioned,the International Mon
97、etary Fund has expressed a very pessimistic view with regards to Italys growth for 2023(-0,2%).23Italy Singapore VietnamItaly-1.Country presentationTable 1.International Monetary Fund growth forecasts 202120222023United States5,71,61,0Euro Area5,23,10,5Germany2,61,5-0,3France6,82,50,7Italy6,73,2-0,2
98、Spain5,14,31,2Japan1,71,71,6United Kingdom7,43,60,3Canada4,53,31,5Source:World Economic Outlook,IMF,22 October 20221.6.4.Public financesAs is well-known,in 2020,due to the pandemic emergency and the measures to sup-port household incomes and business liquidity,EU national governments,especially than
99、ks to the suspension of the Fiscal compact,implemented strongly expansive fiscal policies,thereby significantly increasing deficits and public debt.Thanks,also,to accom-modating interventions by the European Central bank,which launched an extraordinary plan for the purchase of securities and took re
100、al interest rates to a negative level,Italian public debt grew significantly in 2020,reaching 154.9%of GDP.At the end of 2021,the Italian public debt was 2,678 billion euros against 1,782 billion of GDP.Thanks to the strong recovery in 2021,with a nominal GDP growth of+7.3%and the substantial stabil
101、ity of the implicit interest rate of 2.5%,the ratio fell to 150.3%,never-theless significantly higher compared to 134.1%in 2019.Thanks to the positive GDP trend,the debt/GDP ratio is forecast to fall further to 145.4%and then to reach 139.3%in 2025.24Italy Singapore VietnamItaly-1.Country presentati
102、onGraph 3.Trend of ratio between public debt and gross domestic product.Years ,9%106,1%116,6%119,2%119,7%126,5%132,4%135,4%135,3%134,8%134,1%134,4%134,1%154,7%150,3%145,4%143,2%140,9%139,3%*Mef Estimates(September 2022)Source:FNC analysis of Bank of Italy and Mef dataThe combined effect
103、of the rebound of GDP in 2022 and the energy crisis led to an un-expected increase in tax incomes,taking the tax burden to 43,4%in 2021 with a forecast of a further jump to 43.9%in 2023 to then fall gradually in the following years until arriving at 42.5%in 2025.25Italy Singapore VietnamItaly-2.Star
104、ting a business activity in Italy2.Starting a business activity in ItalyThe choice of the manner a foreign entrepreneur can operate in Italy depends on nu-merous factors essentially linked to the organisation and objectives of their own busi-ness,as well as the particular characteristics of the Ital
105、ian market.In general,a business activity can be carried on in individual or collective form,also subscribing or acquiring capital/stakes in an already existing company.With the definitive coming into force of the Business Crisis and Insolvency Code further to the amendments introduced by Legislativ
106、e Decree no.83/2022 which implemented in Italy EU Directive 1023/2019 on preventive restructuring frameworks1,individual or col-lective entrepreneurs must adopt suitable measures or an adequate organisational,ad-ministrative or accounting structure for the nature and dimension of the enterprise,also
107、 for the purpose of the prompt detection of a state of crisis and are obliged to act without delay to adopt and implement one of the tools provided by the law for overcoming the crisis.With reference to the ways to start a business venture,various approaches are possi-ble,which are briefly described
108、 below.2.1.The representative officeThe representative office is the simplest form of market penetration;through this means,in fact,a foreign person or entity can directly promote their products or services in the Italian territory with limited obligations and costs and without acquiring any tax lia
109、bility,avoiding administrative,accounting and fiscal commitments of any significance.It is characterised by presence in the Italian territory of a company without there being any exercise of its main activities and makes it possible to easily gauge the Italian mar-ket,while promoting its own busines
110、s activity.Functions merely auxiliary or preparatory but useful for the penetration of a foreign enterprise in the Italian market are carried out through a representative office,such as promotional and advertising activities,the gathering of information and the delivery of goods.These activities can
111、 be performed in laboratories,warehouses,deposits,offices,1 This refers to Directive(EU)2019/1023 of the European Parliament and Council of 20 June 2019 on preventive restructuring frameworks,on the discharge of debt and disqualifications,and on measures to increase the effi-ciency of procedures con
112、cerning restructuring,insolvency and discharge of debt,and which amends Directive(EU)2017/1132(Directive on restructuring and insolvency).26Italy Singapore VietnamItaly-2.Starting a business activity in Italyshops and showrooms,provided an entire production or sales cycle is not carried out on a per
113、manent basis,as the condition of a(concealed)permanent establishment would easily in this case materialise,with all the consequences linked to the relative omissions.From a civil law point of view,the representative office does not have legal autonomy from the parent company,which remains the only e
114、ntity responsible for corporate ob-ligations assumed with relation to third parties.Italian legal provisions,however,apply regarding public access to official records.For tax purposes,the foreign enterprise is not subject to taxation in Italy for the pres-ence of a representative office unless,as al
115、ready mentioned,it is effectively a permanent establishment of the foreign entity,carrying out a production or commercial activity on own account.In this sense,it is necessary to pay attention to the activity performed by the repre-sentative office in order not to run the risk that said office is re
116、defined subsequently as a permanent establishment in Italy of the foreign enterprise,with consequent taxation in Italy of the income generated by the permanent establishment.2.2.The permanent establishmentA non-resident enterprise can carry on its activity in Italy through a permanent es-tablishment
117、.According to the definition provided by the OCSE2 the expression“perma-nent establishment”refers to a fixed business site by means of which a non-resident enterprise exercises,in whole or in part,its own business activity in Italy.This includes:a management site,a branch,an office,a workshop,a labo
118、ratory,a building site for con-struction,assembly or installation(provided said building site has a duration of more than three months3).A significant and continuous economic presence in the territory of the State set up so as not to have a physical presence in the same territory is also considered
119、as a perma-nent establishment.This condition was introduced in 2018 with the aim of“mitigating the link until then fundamental between the physical presence of an activity in the territory of the State and being subject to tax legislation”.2 This definition has been substantially taken from Italian
120、domestic legislation(art.162 of Presidential Decree 917/1986 bearing the Income Tax Consolidated Act the so-called Tuir),except for a number of differences.3 Art.5 of the OECD Convention Model against double taxation provides for a duration of 12 months for the purpose of considering a building site
121、 a permanent establishment.Art.162 of the Tuir provides for a duration of only three months.27Italy Singapore VietnamItaly-2.Starting a business activity in ItalyThe legislator has,moreover,defined a permanent establishment in a negative sense,listing a series of situations that do not constitute a
122、permanent establishment(a so-called negative list).In this sense,a fixed place of business is not considered a permanent establishment if it is used only for the purpose of purchasing assets or goods or for gathering information.The use of an installation for storage purposes only,the display or del
123、ivery of assets or goods belonging to the enterprise,or for the availability of assets or goods stocked only for storage purposes and for display or delivery or transformation on the part of another enterprise,are all considered as not constituting a permanent establishment.Finally,the same applies
124、to the availability of a fixed place of business used only for the purpose of the combined performance of the above-mentioned activities.In order to be considered not pertinent for the purpose of constituting a permanent establishment,the activities listed in negative list must,in essence,be of a pr
125、eparatory and auxiliary nature with respect to the main activity of the non-resident enterprise4.A permanent establishment is defined as“material”(M.P.E.)if it is established through the physical presence of a fixed place of business of the foreign enterprise5;it is defined as“personal”(P.P.E.),in t
126、he presence of non-independent agents that have the power to close contracts in the name and on behalf of the foreign company or act for their closure without substantial modifications made by the foreign enterprise(so-called commission agent)6.From a civil law point of view,also the permanent estab
127、lishment is not a legally auton-omous entity with respect to the parent company.It is essentially a mere means through which the business activity is carried on.As a result,although it is typically provided with an endowment fund,it does not need to formally establish share capital or have inde-pend
128、ent corporate bodies.4 The new paragraph 5 of art.162 of the Income Tax Consolidated Act provides for the so-called anti-fragmen-tation rule,aimed at preventing the non-resident enterprise from artificially subdividing a single activity into a number of operations,considered preparatory and auxiliar
129、y,only for the purpose of meeting one of the conditions excluding the permanent establishment definition provided for by the so-called negative list.5 The characteristics necessary for being defined as a M.P.E.include principally the fixed nature in time and space of the fixed place of business and
130、the requirement that the activity of the foreign parent company is carried out in said place.6 With regards to the P.P.E.,it should be noted that the power assigned to a person must be effectively exercised,not in an occasional manner,and must relate to the foreign parent companys business activity.
131、Conversely,the status of permanent establishment is not met when the person that operates on behalf of a non-resident enter-prise only carries on merely auxiliary and preparatory activities.When a person operates exclusively or almost exclusively on behalf of one or more enterprises with which they
132、have close ties,they cannot be considered as an independent agent.28Italy Singapore VietnamItaly-2.Starting a business activity in ItalyWith reference to aspects relating to taxation,the permanent establishment is a signif-icant entity both with regards to value added tax(VAT),and is an autonomous c
133、entre for the allocation of revenues and costs,and is taxed in the territory of the Italian State for the income generated there by the P.E.The permanent establishment is considered as an entity resident in the Italian state for tax purposes and as such is subject to the same tax regulations provide
134、d for individ-uals and entities carrying out business activities in Italy.In accounting terms,the operations carried out by the permanent establishment are recorded in separate accounts from that of the parent company and merge into the fi-nancial statement of the foreign enterprise,consolidating wi
135、th the accounting records of the parent company.The permanent establishment keeps accounts only for tax purposes in order to quanti-fy the income attributable to it according to the arms length principle.Said income is de-finitively taxed in the foreign State,and is consolidated in the parent compan
136、ys overall income.The taxes paid in Italy are deducted from the parent companys income through the tax credit system provided for by the OCSE Model and by art.165 of the Income Tax Consolidated Act(in that case for foreign branches).One advantage of the use of a permanent establishment with respect
137、to the setting up of a company arises in the event of making substantial losses.With a company,in fact,it would be necessary to resort to recapitalisation,while in the case of a branch,it is not necessary to restore the initial endowment fund or,in all events,intervene with regards to capital.In add
138、ition,distributions of the endowment fund from the branch to the parent com-pany are not subject to withholding tax in the Italian State.The OCSE Guidelines on the attribution of profits to a permanent establishment permit,under certain conditions,the allocation of funds between the parent company a
139、nd the permanent establishment.Said passive interests,together with interest payable on loans taken out directly by the permanent establishment can be deducted according to the ordinary rules of the Italian State.2.3.Incorporating a companyThe incorporation of a company is the most complete way of e
140、stablishing a presence in Italy on the part of a foreign investor.Italian law offers a wide range of company forms useable for carrying on a business activity,the choice of which depends on numerous factors relating to the entrepreneurs 29Italy Singapore VietnamItaly-2.Starting a business activity i
141、n Italyorganisational requirements,the business objects established in the memorandum of association by the members or shareholders,as well as with respect to liability and the taxation regime to which it is intended to be subject.The rules regarding types of companies are contained in the Italian C
142、ivil Code and in special laws bearing detailed provisions for companies operating in sectors subject to supervision,such as listed companies,banks and insurance companies.Limiting our analysis to companies that do not carry on their business activities in su-pervised sectors,a first classification t
143、o make,with regards to legal status,relates to the distinction between partnerships and companies.The first category including the societ semplice(s.s.)(simple partnership)the soci-et in nome collettivo(s.n.c.)(general partnership)and the societ in accomandita sem-plice(s.a.s.)(limited partnership)i
144、s characterized by:imperfect financial autonomy.The partners(all in general partnerships and in the simple partnership,in the latter case unless otherwise agreed to the contrary,ge-neral partners in limited partnerships)have unlimited and liability meaning that each partner responds with their own p
145、ersonal assets for the obligations assumed by the partnership and joint liability,that is to say,each member is liable also for debts incurred,in the name of the partnership,by the other partners,with the consequence that the partnerships creditors can refer to any of the partners to require the ful
146、filment of the entire obligation;the invalidity of agreements through which one or more partners are excluded from any participation in profits or losses;the possibility of the simultaneous status of partner and director;the transferability,between living persons or for cause of death,of the status
147、of partner,subject to the approval of all the other partners,that is,of all other sur-viving partners.Companies enterprises,that is,joint-stock companies,limited liability companies plus partnerships limited by shares are characterized by:perfect financial autonomy.The capital of the company,in fact
148、,is completely se-parate from the capital of the members and,as a result,only the company is an-swerable for corporate obligations with its own capital to the limit of the share ca-pital or the assets that the members have contributed to the company(excepting limited liability partnerships,where the
149、 unlimited and joint liability of the general partners is provided for);30Italy Singapore VietnamItaly-2.Starting a business activity in Italy the separation between the status as member and power of management,for whi-ch a member is not,as such,a director of the company and a director of the com-pa
150、ny is not necessary one of the members;the transferability,between living persons or for cause of death,of the status of partner,subject to compliance with the particular restrictions established by the law in the specific regulations for the type of company chosen by the members upon incorporation.
151、A further classification of company types can be made on the basis of the business ob-jects,making a distinction between profit-making companies,with the purpose of dividing the profits earned among the shareholders,and companies with a mutualistic purpose(co-operatives),whose object is the provisio
152、n of goods and services or the creation of jobs for the members under more advantageous conditions than what the members would obtain in the market.It should be noted that the provisions of s.p.as(join-stock companies)apply to cooperatives where compatible,that is,as regulated by the by-laws,and in
153、the case that the number of members is lower than twenty and balance sheet assets do not exceed a million euros,regulations laid down for s.r.l.s(limited liability companies).Italian law,moreover,permits the incorporation of single-member companies,incorpo-rated by a single member,upon the meeting o
154、f certain conditions and,since 2012,provides for the possibility of incorporating an s.r.l.with a minimum capital of one euro(simplified limited liability company)and which does not exceed the amount of 10,000 euros.Also starting from 2012,the Italian legislator introduced into the legal system a ne
155、w type of innovative enterprise(the so-called innovative start-up),in relation to which significant tax and contribution concessions are provided for,as well as incentives for investors.Innovative start-ups are limited companies,also in cooperative form,resident in Italy(or in another member country
156、 of the European Union,provided they have a production site or a subsidiary in Italy),which meet certain conditions7 and whose business object,ex-clusively or prevalent,consists in the development,production or marketing of innovative products or services with a high technological content.In the cat
157、egory of the aforementioned limited companies,the s.p.a.(joint-stock com-pany)and the s.r.l.(limited liability company)represent the forms most used to start a business in Italy.As a result,it is only with reference to said legal forms that the main characteristics are described below.7 Reference sh
158、ould be made to art.25 of Decree Law 18 October 2012 no.179,converted with amendments by Law 17 December 2012,no.221.31Italy Singapore VietnamItaly-2.Starting a business activity in Italy2.3.1.Societ per azioni(s.p.a.)(Joint-stock companies)The capital is represented by shares and the minimum value
159、is fixed at euro 50,000.00,of which 25%must be paid upon incorporation which must occur through a public deed drawn up by a notary.The s.p.a.is characterised by three distinct management and control systems which,together with the shareholders meeting,are responsible for the organization of the com-
160、pany.The independent audit is performed by an external person or firm specifically ap-pointed by the shareholders meeting.In the traditional management and control system(see below)a provision of the articles of association can assign the audit to the statutory board of auditors.The Shareholders Mee
161、ting is the sovereign body of the s.p.a.with exclusively deci-sion-making functions and in which the will of the members is expressed,to be then implemented by the management body.As mentioned,the management and control system of s.p.a.s can be carried out through three different governance models:t
162、he traditional system,based on a management body and a control body;a dualistic system,in which the management of the company is assigned to a Ma-nagement Board,controlled by a Supervisory Board,which appoints members of the Management Board.In this case,the independent audit is always assigned to a
163、n audit firm or to an auditor external to the company;the one-tier system,in which the management of the company is assigned to a Board of Directors which internally appoints a Management Control Committee.Again,in this case,the independent audit is always assigned to an audit firm or to an auditor
164、external to the company.In the traditional management and control model,which is the most widely used and which is applied in the absence of a different provision in the articles of association,the management of the company is,therefore,assigned to a management body,which can be composed of a number
165、 of directors,the so-called board of directors,or by a single director,the so-called sole director.The board of directors can delegate some of its powers of administration to an execu-tive committee or to a managing director.It should be noted that the setting up of suita-ble structures for the natu
166、re and dimensions of the enterprise,also for the purpose of a prompt detection of a state of crisis,is attributed exclusively to the directors.The board of statutory auditors,in the traditional system of governance,monitors compliance with the law and with the articles of association,compliance with
167、 the princi-32Italy Singapore VietnamItaly-2.Starting a business activity in Italyples of correct management and,in particular,the adequacy of the organisational,man-agement and accounting structure adopted by the company and its effective functioning.As mentioned,in some cases the board of statutor
168、y auditors can be assigned the au-dit:this applies to companies that are not obliged to draw up consolidated financial statements and with respect to which a specific provision of the articles of association attributes the audit to the board of statutory auditors.2.3.2.Societ a responsabilit limitat
169、a(s.r.l.)(Limited liability companies)The s.r.l.is a leaner and more flexible form compared to the s.p.a.and is traditionally used for business activities of smaller dimensions compared to those that an s.p.a.car-ries on and characterized by a lower level of investment.Incorporation must occur throu
170、gh a public deed drawn up by a notary;the capital is in the form of shares and the minimum value is set at 10,000 euros,without prejudice to the possibility,as already mentioned,of incorporating a simplified limited liability company with a minimum capital of 1 euro.The latter is a corporate form us
171、eable only by individuals,also by a single member,and the share capital as mentioned equal to at least 1 euro must be less than 10,000 euros,subscribed and fully paid upon incorporation.Payment must be made in money and paid to the management body.It is worth noting,moreover,the recent introduction
172、into Italian law of the category of societ a responsabilit limitata PMI(s.r.l.PMI)(SME limited liability companies)which re-duces the differences between s.r.l.and s.p.a.so that,in departing from the strict provisions regarding s.r.l.s on the basis of which shares cannot be offered to the public as
173、financial products it is permitted to place shares on the market through specific telematic portals for crowdfunding,in compliance with the legal limits provided for by the legislation8.Along the same lines,s.r.l.PMIs are able to create categories of shares.With regards to the management and control
174、 system characterising the s.r.l.,it should be pointed out that,unless otherwise provided for by the articles of association,man-agement is assigned to one or more members appointed by decision of the shareholders.As a result,s.r.l.s can be managed by a sole director or by a number of directors.When
175、 management is assigned to a number of people,they form the board of direc-tors.The memorandum of association can,however,provide that management is as-8 Pursuant to art.100-ter,para.1-bis,Leg.Dec.n.58,of 24 February 1998 of the Tuf,excepting what is provided for by art.2468,para.1 of the Italian Ci
176、vil Code,equity stakes in small and medium enterprises incorporated as societ a responsabilit limitata can be offered to the public as financial products also through portals for the raising of capital regulated in the same provision.33Italy Singapore VietnamItaly-2.Starting a business activity in I
177、talysigned to the members of the board separately or jointly.It is worth pointing out that the setting up of suitable structures for the nature and dimensions of the enterprise,also for the purpose of a prompt detection of a state of crisis(s.par.2.),is attributed exclusively to the directors.The s.
178、r.l.is characterised by a particular control system,as only upon the exceeding of certain parameters or upon the meeting of certain conditions,is the shareholders meet-ing obliged to appoint an external auditor or,alternatively,a control body composed of a number of members or a single person(the so
179、le statutory auditor).More precisely,the appointment of a control body also monocratic(sole statutory auditor)or of an external auditor(individual or firm)is obligatory if the company:is obliged to draw up consolidated financial statements;controls a company obliged to have an independent audit;has
180、exceeded,for two consecutive financial periods,at least one of the following limits:4,000,000 of assets in the balance sheet;4,000,000 of revenues from sales and services;20 employees on average during the financial period.With regards to the functions of the control body,the law provides that,also
181、in the presence of a monocratic body(sole statutory auditor),the provisions referring to the board of statutory auditors of s.p.a.s apply.Independent auditAs stated above,limited companies are obliged to appoint an independent auditor.The individuals or entities that perform the independent audit of
182、 Italian accounts(ex-ternal auditors and audit firms)must be enrolled in the Register of external auditors kept by the Ministry of the Economy and Finance and must comply with the provisions contained in Leg.Dec.no.39/2010,in its implementing provisions and in European Reg-ulation no.537/2014.In the
183、 event that,as mentioned,the independent audit of the accounts is assigned to a board of statutory auditors(or to the sole statutory auditor of an s.r.l.),all the members,or the sole statutory auditor,must be enrolled in the Register of external auditors and comply both with the rules provided for i
184、n the regulations relating to the supervisory function,and with regards to the performance of the audit in collegial form with the specific provisions of Leg.Dec.n.39/2010,including the provisions relating to independ-ence and the International Standards on Auditing(ISA Italia).34Italy Singapore Vie
185、tnamItaly-3.The taxation system3.The taxation systemThe Italian tax system is based on the taxation of income,consumption and assets,and is implemented through the application of the following main taxes:Imposta sul reddito delle societ(IRES)(Corporate income tax);Imposta regionale sulle attivit pro
186、duttive(IRAP)(Italian regional tax on pro-duction);Imposta sul valore aggiunto(IVA)(Value added tax);Imposta sul reddito delle presone fisiche(IRPEF)(Personal income tax);Imposta sulle successioni e donazioni(Inheritance and gift tax);Imposta Municipale Unica(IMU)(Municipal property tax);Imposta di
187、registro e tasse indirette su trasferimenti di propriet(Registration tax and indirect taxes on property transfers);Imposta sul valore delle attivit finanziarie estere(IVAFE)(Tax on the value of fo-reign financial assets;Imposta sul valore degli immobili esteri(IVIE)(Tax on the value of foreign real
188、estate).The main taxes of particular interest for a foreign investor are analysed below.3.1.IRESThe Imposta sul Reddito delle Societ(IRES)(Corporate income tax)is aimed at taxing the incomes produced by activities exercised by both resident and non-resident compa-nies,cooperatives and similar entiti
189、es(associations,foundations,trusts,etc.).Any source of income generated by said companies and similar entities is subject to tax on income through IRES.For resident entities taxable income includes not only the income generated in Italy,but also that generated abroad.For non-resident entities taxabl
190、e business income in Italy is only that earned through a permanent establishment in Italy.A company or legal entity is considered resident in Italy if,for the greater part of the tax period,has in Italy,alternatively,its(i)registered office,(ii)administrative office,(iii)main business object.35Italy
191、 Singapore VietnamItaly-3.The taxation systemPartnerships are not subject to either IRPEF or IRES since,with regards to the income generated,the single partners are subject to taxes on income with reference to the stake held by them and independent of its collection(so-called“transparency principle”
192、).IRES is a proportional tax,the rate of which is 24%,and is applied on taxable income(the taxable base).The tax obligation is fulfilled twice a year,with the result that,at the first deadline,the balance is due relating to the previous year and the first down payment for the current year,and at the
193、 second,the second down payment relating to the year in progress.Tax base of business income:observationsIn general,the business income of companies and commercial entities is determined by making increasing or decreasing adjustments to profit or loss,as provided for by tax legislation.In the event
194、of a negative tax base,the losses made in the first three financial periods from the start of operations are recordable in the subsequent tax periods,without time or quantity limits.Losses made from the fourth financial period are deducted from the income of subsequent tax periods up to a limit of 8
195、0%of the taxable income for each of them.Interest payable is deductible up to correspondence with interest receivable.The ex-cess is deductible within the limit of 30%of the gross operating profit shown in the income statement.Any further excess is deductible,according to the above limits,in subsequ
196、ent financial periods.Dividends paid by limited companies to non-resident shareholders are subject to with-holding tax of 26%(without prejudice to the application of any more favourable rates provided for by Conventions against double-taxation;said withholding tax is not appli-cable to profits relat
197、ing to a permanent establishment in Italy of a non-resident entity).Withholding tax is at 1.20%in the event dividends are paid to companies and entities subject to corporate income tax resident in another member State of the European Union or in States that have signed up to the European Area Agreem
198、ent and that permit an ad-equate exchange of information.Finally,exemption from“outgoing”withholding tax is provided for dividends distrib-uted to limited companies resident in another member State of the European Union that hold,uninterruptedly for at least one year,a minimum equity investment of 1
199、0%in the limited company resident in Italy(so-called“parent-subsidiary”directive).36Italy Singapore VietnamItaly-3.The taxation system3.2.IRAPThe Imposta Regionale sulle Attivit Produttive(IRAP)(Italian regional tax on produc-tion)is an“own derived tax”,that is to say,a tax established and regulated
200、 by the law of the State,the revenue from which is attributed to the regions which must,therefore,exercise their own tax autonomy within the limits established by State law.IRAP revenue goes towards funding the National Health Service.Limited companies and entities subject to IRES,as well as partner
201、ships and profes-sional associations,are subject to IRAP.The ordinary rate is 3.9%.The tax base is the net value of production,determined,as a general rule,from the dif-ference between the positive and negative components of ordinary operations(not taking account of financial income and charges).Spe
202、cific provisions for the cost of employees are also established:the cost relating to permanent employees is fully deductible,while that relating to fixed-term employees is deductible only with respect to contributions for compulsory accident insurance as well as in relation to apprentices,disabled w
203、orkers,staff hired with training and employment contracts and staff working on research and development.For entities with positive components of no greater of 400,000 in the tax period,a flat-rate deduction of 1,850 euro is provided for each fixed-term worker,up to a maximum of 5 employees.For non-r
204、esident entities,IRAP is due only if its activities are carried on through a per-manent establishment set up in Italy.3.3.IRPEFThe Imposta sul Reddito delle Persone Fisiche(IRPEF)(Personal income tax)is im-posed on all resident individuals with regards to all income however generated(in Italy or abr
205、oad),and on non-resident individuals,in relation to only income generated in Italy.All those who,for the greater part of the tax period,alternatively(i)are registered in the registries of populations resident in Italian Municipalities,(ii)have their domicile(considered as the centre of economic and
206、family interests)in Italy,(iii)have their res-idence(intended as the place where the person has their usual residence)in Italy,are considered as resident in ItalyIRPEF is a personal and progressive tax.The tax due is calculated applying to the over-all income(composed of all the categories of revenu
207、e and,therefore,also of income 37Italy Singapore VietnamItaly-3.The taxation systemdifferent from those of the business),net of deductible costs,increasing rates by income brackets.The progressive rates by income brackets are set out below:up to 15,000.00 euros,23%;over 15,000,00 euros and up to 28,
208、000.00 euros,25%;over 28.000,00 euros and up to 50,000.00 euros,35%;over 50,000,00 euros,43%.Specific deductions provided for by current tax laws will be subtracted from the result-ing gross amount.The above deductions are fully recognised also for non-resident individuals that earn in Italy not les
209、s than 75%of their overall generated income and that do not enjoy analo-gous tax benefits in the State of residence.3.4.IVA(VAT)As a rule,the sale of goods or the provision of services in the Italian territory on the part of individuals and entities that professionally carry on a business activity i
210、s subject to Imposta sul Valore Aggiunto(IVA)(VAT).It is an indirect tax on the consumption of income.The ordinary rate is 22%.Reduced rates are provided for specific goods and services:4%,for example,for foods,drinks and agricultural products;5%,for example,for certain foods;10%,among others,for th
211、e supply of electricity and gas for domestic use,hotel and catering services,medicines and renovation of the building heritage.38Italy Singapore VietnamItaly-4.Labour relations in the market4.Labour relations in the marketBusinesses demand for labour in the Italian market is met through the offer of
212、 two types of work:subordinate employment and self-employment.The Italian Civil Code defines the subordinate worker as a worker that is obliged to collaborate with the enterprise,providing their manual or intellectual services to their superiors and under the di-rection of the entrepreneur.The law e
213、stablishes that the permanent employment contract is the standard employ-ment relationship(“standard”employment).Regulation of employed work relations is contained in the Italian Civ-il Code,in spe-cial laws of the State and in collective labour agree-ments signed between trade union organizations a
214、nd representative employers associations.Permanent employment contracts can be terminated with an exit agreement or through unilateral withdrawal.The worker can withdraw from the employment contract by resign-ing,respecting the notice period provided for in the collective agreement applying to the c
215、ontract.The employer can withdraw from the employment contract inform-ing the worker with a letter of“justified”dismissal”,specifying the motives for interrupting the employment relationship.The notice of dismissal and the notice of resignation is provided for unless there is a“just cause”of withdra
216、wal or when the trust be-tween the employer and the worker is lost.With the labour laws reform of 2015(the so-called“Jobs Act”),new remedies against illegal or unjustified dismissal were introduced.In the light of the reform,the“actual”stability of the employment re-lationship,with the workers right
217、 to be reinstated in the job,re-mains only when the invalidity of the dismissal is ascertained.The dismissal is invalid when it is discriminatory,retaliatory,against the law or when notified verbally.In the other cases,the main remedies against illegal dismissal pro-vide for the right of the worker
218、to receive compensation payments.“Normal”working hours are established by the law as forty hours per week.They can be distributed over five or six days in the week.Every worker has the right to rest each day for a minimum of eleven hours;a weekly rest of a minimum of twenty-four hours;a period of ho
219、lidays of at least four weeks for each year of work.39Italy Singapore VietnamItaly-4.Labour relations in the marketThe time worked and the level of professionalism are the main pa-rameters used for calculating remuneration for work.Art.36 of the Constitution of the Italian Republic affirms that work
220、-ers have the right to a remuneration proportionate to the quantity and quality of their work and,in all events,sufficient to ensure themselves and their family a free and dignified existence.The levels of remuneration to take as a benchmark for complying with the constitu-tional provision are those
221、 established in national collective labour agreements signed by the most representative trade unions of the reference category.Italian law protects the work of women and minors.According to the general principle,children that have not reached fifteen years of age cannot work.Adolescents,that is,mino
222、rs aged between fifteen and eighteen years old,cannot enter the labour market before they are 16 and only having completed their com-pul-sory education.The parity of female workers with respect to male workers is given fundamental im-portance in the Italian legislation.Discrimination,al-so of a remu
223、nerative nature,against female workers,is prohibited.Discrimination of females in any professional orientation and training initiative is also prohibited.The law attributes the employer executive power,disciplinary power and supervisory power for the management of their employed staff.The employee h
224、as the duty to obey the directives given by the em-ployer and is obliged to perform their work with diligence.In addi-tion,during the employment relationship,employees have the obli-gation of loyalty with respect to their employer.This means that the law prohibits the worker from carrying out activi
225、ties in competition with their employer.Italian law has established also forms of“flexible”work.Regulation of“non-standard”types of employment contracts is con-tained in Leg.Dec.no.81/2015.The main ones are the fixed-term contract and the part-time em-ployment contract.The fixed-term contract can be
226、 freely entered into for the first time with any worker if it has a duration of no greater than twelve months.No worker can have fixed-term con-tracts with the same em-ployer that have an overall duration of greater than twenty-four months.Upon the agreed expiry of employment,the contract is termina
227、ted automatically.All workers can be hired with a part-time employment contract pro-vided that the con-tract specifies the working hours.The employee must be able to have free time outside the working hours estab-lished by the contract.As a general rule,all employment contracts must be established t
228、hrough the signing of a written employment contract.40Italy Singapore VietnamItaly-4.Labour relations in the marketThe law prescribes essential information to be contained in the em-ployment contract:a.a.the identity of the parties;b.b.the place of work;c.c.the site or domicile of the employer;d.d.t
229、he position,level and qualification attributed to the worker or,alternatively,a brief description of the job;e.e.the date of the start of the employment contract;f.f.the type of employment,specifying in the event of fixed-term contracts,its in-tended duration;g.g.in the case of employees of an emplo
230、yment agency,the identity of the user en-terprise when,and as soon as,known;h.h.the duration of the trial period,if provided for;i.i.the right to receive training organised by the employer,if pro-vided for;j.j.the duration of holiday leave,as well as other paid leave the worker is entitled to or,if
231、this cannot be indicated in the con-tract,the methods for determining their enjoyment;k.k.the procedure,the form and the terms of notice in the event of withdrawal of the employer or worker;l.l.the initial amount of remuneration and the method of payment;m.m.the normal working hours;n.n.the collecti
232、ve agreement,also corporate agreements,applied to the employ-ment contract,with indication of the parties that have signed it;o.o.the entities and institutes that receive the social security and insurance contri-butions due by the employer and any form of protection regarding social security provide
233、d by the employer.Italian law provides for a general and absolute prohibition of inter-mediation and in-tervention in the employment relationship.That is,the supply of labour hired by an“in-tervening”hirer(the so-called provision of other peoples work)and employed under the direction of an interposi
234、ng entrepreneur,is prohibited.This implies that there must be a direct relationship between the employer and the worker.As a general rule,the employer cannot provide or supply their own employee to other employers.41Italy Singapore VietnamItaly-5.Forms of incentives and support to investors and ente
235、rprises5.Forms of incentives and support to investors and enterprises5.1.Innovative start-ups and SMEs(Leg.Dec.179/2012 Decree Law no.3/2015 Decree Law 34/2020)Regulations have been established in the corporate,fiscal and employment law fields for enterprises that operate in Italy in the area of tec
236、hnological innovation,so called“in-novative start-ups”and“innovative SMEs”.Objective:the measures are aimed at fostering new business initiatives,sustainable growth,technological innovation and employment(particularly youth employment).Beneficiaries:SMEs incorporated as limited companies that meet c
237、ertain requirements in terms of research and development costs,the employment of highly-qualified staff or the use of registered patents/software.Concessions:reduction of bureaucratic costs during the incorporation phase;exemptions from certain provisions regarding corporate law;flexible work rules;
238、possibility of raising capital through equity crowdfunding;possibility of return on investment through equity participation instruments;support in access to credit through a Guarantee Fund;subsidised dedicated loans(the Smart&start Italia programme,for example);possibility of access to other forms o
239、f dedicated funding;tax incentives for investors.Tax incentives Investment incentive,organised as follows:for individuals,an IRPEF deduction of 30%from the amount invested,up to a maximum investment of 1 million euros;alternatively,for individuals there is an IRPEF deduction of 50%from the amount in
240、vested in the risk capital of innovative start-ups or innovative SMEs.The concessions are granted according to the“de minimis”Rule.For investmen-ts made in innovative start-ups,the subsidised investment amounts to a maxi-42Italy Singapore VietnamItaly-5.Forms of incentives and support to investors a
241、nd enterprisesmum of 100,000 euros for each tax period(300,000 euros for SMEs).Pursuant to the“de minimis”Rule,the company receiving the investment cannot obtain“de minimis”aid for more than 200,000 euro over three financial periods.for legal entities,a deduction from the IRES taxable amount equal t
242、o 30%of the invested amount,up to a maximum investment of 1.8 million euros.lower costs for the offsetting of VAT credits;tax exemption from capital gains deriving from the sale of equity investments in innovative start-ups.5.2.Tax credit for investments in capital goods(art.1,paragraphs 184 to 197,
243、Law 160/2019 as amended.)The Budget Law for 2020 introduced new types of incentives for the acquisition of tan-gible and intangible assets instrumental to the exercise of the business activity,with par-ticular reference to those supporting the development of the“industry 4.0”programme.With regards t
244、o tangible goods pertaining to the“industry 4.0”model,the credit is remodelled as follows:2022 tax period:40%of the cost for invested amounts up to 2.5 million;20%of the cost for invested amounts over 2.5 million and up to the limit of admissible costs of 10 million;10%of the costs for invested amou
245、nts between 10 million and up to the admis-sible limit of costs of 20 million;tax periods between 2023 and 2025 inclusive:20%of the cost for invested amounts up to 2.5 million;10%of the cost for invested amounts over 2.5 million and up to the limit of admissible costs of 10 million;5%of the costs fo
246、r invested amounts between 10 million and up to the admis-sible limit of costs of 20 million;43Italy Singapore VietnamItaly-5.Forms of incentives and support to investors and enterprisesWith regards to technically advanced intangible capital assets pertinent to the 4.0 transformation process,the lev
247、el of the tax credit(to be calculated on a maximum amount of 1 million),can be summarized as follows:50%in 20229;20%in 2023;15%in 2024;10%in 2025.With regards to ordinary assets(not 4.0),there is a lower level of aid,equal to 6%,within the maximum limit of admissible costs of 2 million euros.5.3.Tax
248、 credit for investments in the South of Italy and Special Economic Zones(“ZES”)(art.1,paragraphs from 98 to 108,Law 208/2015 as amended.)The 2016 Stability Law established a tax credit for the acquisition of capital goods intended for production sites located in the Southern regions of Italy(Campani
249、a,Puglia,Basilicata,Calabria,Sicily,Molise,Sardinia and Abruzzo).Investments are eligible for con-cessions which are made in machinery,pant and various equipment(also through finance leasing)relating to:the creation of a new factory;the extension of an existing factorys capacity;diversification of t
250、he production of a factory to obtain products not previously manufactured;a fundamental change in the overall production process of an existing factory.Art.4 of Decree Law 91/201710,for the purpose of promoting the creation of favourable conditions for development,in certain areas of the country,of
251、enterprises already op-erating,as well as the establishment of new enterprises,provided for the possibility of 9 That is,by 30.06.2023,provided that by 31.12.2022 the seller has acquired the relative order and that down payments have been made for at least 20%of the purchase cost.10 Decree Law 20 Ju
252、ne 2017,no.91,“Disposizioni urgenti per la crescita economica del Mezzogiorno”(Urgent provisions for economic growth the South of Italy).44Italy Singapore VietnamItaly-5.Forms of incentives and support to investors and enterprisessetting up so-called ZES(Special Economic Zones),inside of which it is
253、 possible to benefit from tax concessions and the simplification of administrative procedures.Specifically,a tax credit has been established corresponding to the overall cost of the capital goods within the maximum limit,for each investment project,of 100 million euros.The ZES tax credit has been re
254、cently extended,including also the purchase of land and the acquisi-tion,development or extension of real estate instrumental to the investments.The Southern Italy tax credit is proportionate to the overall cost of the assets11,within the maximum limit,for each investment project,of:3 million euros
255、for small enterprises;10 million euros for medium enterprises;15 million euros for large enterprises.The determination of the maximum thresholds currently in force has superseded the previous legislation,according to which,the limits in question referred to the cost of the assets net of depreciation
256、 provisions made in the tax period,with relation to the same categories of asset belonging to the production site in which the new investment is made.The tax credit for areas in Southern Italy,on the basis of the region of reference and the dimension of the enterprise,is calculated according to the
257、rates shown in the table below:RegionsSmallMediumLargeBasilicata,Calabria,Campania,Molise,Puglia,Sardinia,Sicily45%35%25%Abruzzo30%20%10%The above rates are applied also to the tax credit relating to Special Economic Zones.11 For investments made through finance leasing contracts,the cost incurred b
258、y the lessor for the acquisition of the assets is referred to;this cost does not include maintenance costs.45Italy Singapore VietnamItaly-5.Forms of incentives and support to investors and enterprises5.4.Aid for Economic Growth(so-called“ACE”)(Art.1,Decree Law 201/2011 art.19,Decree Law 73/2021)Aid
259、for economic growth,better known in Italy with the“ACE”acronym,is a conces-sion intended to foster the capitalisation of enterprises and is directed towards limited companies,partnerships and individual entrepreneurs in the ordinary accounting regime and other entities resident in Italy,as well as t
260、he same non-residential individuals and entities with respect to permanent establishments in Italy.The concession consists in a deduction from overall income of a percentage return on capital introduced or increased in the Italian enterprise,equal to 1.3%,permitting a reduction of IRES and of IRPEF,
261、besides of the relative surcharges.The concession has no impact on IRAP.The increase in equity for ACE purposes,on which to calculate the aforementioned return percentage,is determined,generally,considering as increases cash contributions and provisions of available profits and reserves and as decre
262、ases reductions in share-holders equity attributable to shareholders(or to the entrepreneur)for any reason.5.5.Tax credit for research and development(Law 190/2014)The 2015 Stability Law introduced a tax credit in favour of all enterprises,regardless of their legal form,of the economic sector and of
263、 the tax regime adopted.The tax credit is quantified on the amount of costs incurred in each subsidised tax period,exceeding the average of the same investments made in the three previous tax periods.The level of aid,the maximum amounts and the concessions provided for vary on the basis of the activ
264、ities in question:1.Fundamental research,industrial research and experimental development in a scientific or technological field12.12 The criteria for the correct application of said definition are set out in detail by art.2 of Ministry of Economic Deveopment(MISE)Decree 26 May 2020 which distinguis
265、hes them taking account of the general principles and criteria contained in the Frascati Manual 2015-Guidelines for collecting and reporting data on research and expe-rimental development(https:/www.oecd.org/sti/inno/frascati-manual.htm).46Italy Singapore VietnamItaly-5.Forms of incentives and suppo
266、rt to investors and enterprises2.Technological innovation aimed at the development of new or substantially impro-ved product or production processes.3.4.0 and green technological innovation,aimed at the development of new or sub-stantially improved products or production processes for the achievemen
267、t of an ecological transition or 4.0 digital innovation objective13.4.Design and aesthetic conception activities aimed at significantly innovating the products of The different rates subdivided on the basis of the type of activity,are summarised in the table below.202220-2031Research
268、and development Rate20%10%10%10%Amount limit4 million5 million5 million5 millionTechnological innovationRate10%10%5%-Amount limit2 million2 million2 million-4,0/green inno-vationRate15%10%5%-Amount limit2 million2 million4 million-DesignRate10%10%5%-Amount limit2 million2 million2 million-13 The cri
269、teria for the correct application of said definitions are indicated in arts.3 and 5 of the aforementio-ned Ministerial Decree,taking account of the general principles contained in the Oslo Manual 2018-Guidelines for Collecting,Reporting and Using Data on Innovation,4th Edition.(https:/www.oecd.org/s
270、cience/oslo-manual-604-en.htm).47Italy Singapore VietnamItaly-5.Forms of incentives and support to investors and enterprises5.6.Capital Goods “Nuova Sabatini financing”tool (art.2 Decree Law 69/2013,no.69)Objective:support investments for the acquisition,also in leasing,of machinery,e
271、quipment,plant,capital goods for production use,as well as of hardware,software and digital technologies.Beneficiaries:SMEs operating in all production sectors,including agriculture and fish-ing.Concession:the contribution covers part of the interests on bank loans and is deter-mined to an extent eq
272、ual to the value of the interest calculated,in a conventional way,on a loan of a duration of five years and of an amount equal to the investment,at an annual interest rate of:2.75%for ordinary investments;3.575%for investments in so-called“Industry 4.0”technologies.The contribution is related to a b
273、ank loan(or leasing agreement),of between 20,000 euros to 4 million euros,of a maximum duration of 5 years,which can be assisted up to 80%from the Guarantee Fund.5.7.Patent box(art.1,paragraphs 37-43 Law 190/2014 Decree Law 3/2015 Mise(Ministry of Economic Development)/MEF(Ministry of Economy and Fi
274、nance)Ministerial Decree 30 July 2015 Mise Ministerial Decree 26 May 2020 art.6 Decree Law 146/2021)Objective:make the Italian market more attractive for long-term national and for-eign investors,incentivising the location in Italy of intangible fixed assets currently held abroad,the maintenance of
275、intangible fixed assets in Italy and favouring investment in research and development activities.Beneficiaries:all companies and entities with business income.Concession:the new regulations permit the increase by 100%,for IRES and IRAP pur-poses,of expenses incurred in the carrying out of research a
276、nd development activities aimed at the maintenance,reinforcement,protection and increase in the value of soft-ware protected by copyright,of industrial patents and of legally protected designs and 48Italy Singapore VietnamItaly-5.Forms of incentives and support to investors and enterprisesmodels.The
277、 activities pertinent for the purpose of the concession are classified as fol-lows:industrial research and experimental development pursuant to art.2 of Mise De-cree 26 May 2020;technological innovation pursuant to art.3 of Mise Decree 26 May 2020;design and aesthetic conception pursuant to art.4 of
278、 Mise Decree 26 May 2020;legal protection of rights on intangible assets.For the purposes of the facility,expenses relate to:staff directly involved in the performance of the pertinent activities;amortisation provisions,the capital part of leasing fees and other costs relating to the capital goods a
279、nd intangible assets used in the performance of the pertinent activities;consultancy services and equivalent relating exclusively to the pertinent activities;materials,supplies and other analogous products used in the pertinent activities;maintenance of rights on subsidised intangible assets,their r
280、enewal upon expiry,their protection,also in associated form,and relating to the prevention of coun-terfeiting and to the management of disputes aimed at protecting the same rights.5.8.Ecobonus and Sisma bonusA tax deduction varying from 50%to 85%of the cost incurred-for work on common parts of multi
281、-occupancy buildings is recognised for redevelopment work and for the reduction of seismic risk carried out on capital properties,goods or assets,with variable ceilings on subsidized spending for each intervention,up to a maximum of 136,000.00 euro,to be spread over 5 or 10 years,depending on the ty
282、pe of intervention.49Italy Singapore VietnamItaly-5.Forms of incentives and support to investors and enterprises5.9.Guarantee fund for SMEs access to credit(art.2,paragraph 100,letter a,Law 662/1996)Its objective is to facilitate access to sources of finance for small and medium en-terprises through
283、 the granting of a public guarantee that flanks and often replaces the collateral brought by the enterprises.Thanks to the Fund,an enterprise has the real possibility of obtaining funds without additional guarantees(and therefore without the costs of surety or insurance premiums)on the amounts guara
284、nteed by the Fund,generally equal to 80%of the loan.5.10.European FundsIt should be noted that Italy,as a member State of the European Union,has access to a wide range of European Funds,distributed with Regional competence.For more informa-tion reference can be made to the website:http:/europa.eu/eu
285、ropean-union/about-eu/funding-grants_it.5.11.Other incentives and concessionsFor a complete and updated review of incentives in favour of Enterprises and Investors,reference can be made to the website:https:/www.mise.gov.it/it/incentivi-mise.50Italy Singapore VietnamItaly-6.A number of customs issue
286、s:“origin”and free trade agreements 6.A number of customs issues:“origin”and free trade agreementsIn international trade,companies have understood the importance of being informed about customs law which,with specific procedures and obligations,often regulates deli-cate aspects which could be of sig
287、nificant importance for each single operator.For enterprises that operate in Italy,and in general for those established in the ter-ritory of the European Union,it is worth knowing the customs regulations deriving from the application of the Union Customs Code14(UCC)and the associated delegation and
288、execution regulations15 in order to be in a position,in the“pre”phase,to plan trade with foreign countries in the best way and to be ready to manage,in the“post”phase,any problems linked to intrinsic aspects that may occur,often also linked to non-tax profiles.The management of“Trade compliance”is a
289、 delicate task from the point of view of company management,in its dealings with the customs process and in determining the relative debt deriving from the customs procedure16 through which the goods have to pass.Reliance is often placed externally,abandoning the planning phase,and the man-agement o
290、f customs aspects is assigned to third parties(shipping companies,customs brokers)which,thanks to their specific experience in trade with foreign countries are needed to fulfil customs procedures and formalities on behalf company so that the third country product can enter the EU or vice-versa.This“
291、delegation”mechanism can cause inefficiencies inside the enterprise and sometimes a misalignment between internal data,normally used in the accounting records,with respect to customs data.14 The legal framework in force in the customs field is based on a complex structure of European and national re
292、-gulations,which have stratified and succeeded each other over the years as a result of the progressive evolution of the European integration process.The European Unions customs union is a unique example.Inside the Community Customs Union,the 27 member states adopt a uniform system for the managemen
293、t of goods which are imported,exported and in transit,and implement a shared series of customs regulations,called the Union Customs Code(UCC).The code came into force on 10 May 2016,even though a number of transitory provisions are still applied.A uniform system of customs duties applies to the impo
294、rtation from third countries,while there are no customs duties at the borders between member States.See EUR-Lex-customs union-EN-EUR-Lex(europa.eu)15 Regulation(EU)no.952/2013 of the European Parliament and Council,of 9 October 2013,which establishes the Union Customs Code(recast directive)(Official
295、 Gazette(OG)Law 269 of 10.10.2013);Delegated Regulation(EU)no.2015/2446(DR);Execution Regulation(EU)no.2015/2447(ER);Transitional Delegated Regulation(TDR)no.2016/341.16 In the UCC,exportation and release for free circulation are“ordinary”regimes,while transit(type T1 or T2),Deposit(including tax-fr
296、ee zones),particular Use and Inward/Outward Processing Relief are“special”regimes.51Italy Singapore VietnamItaly-6.A number of customs issues:“origin”and free trade agreements An effective way of overcoming these inefficiencies and of limiting responsibility pro-files,is to integrate the work of cus
297、toms brokers with increased communication and bet-ter knowledge on the part of the company itself,and of the accountant assisting it,with regards to the prescribed customs obligations,setting up,where possible,specific inter-nal controls.A suitable“Trade Compliance”control consists,among other thing
298、s,in:the issue of certifications of preferential origin and the use of non-preferential origin certifications;the collection of internal and external documentation with respect to the company(for compliance with the rules of origin);periodic monitoring of international agreements,directives,European
299、 regulations and laws and national trade legislation(including embargos and concessions);the identification of necessary licenses for importation into foreign countries;the creation of check-lists and procedures that must be adopted by intermediate operators in the supply chain,brokers and suppliers
300、,in compliance with the stan-dards adopted by the exporting company for the acquisition of specific qualifica-tions(such as,for example,AEO);risk prevention and mitigation measures deriving from possible violations of the different regulations(with the adoption of Model 231,extended to the crime of
301、smuggling).Specifically,economic operators familiarity with the origin concept(together with cus-toms concepts regarding classification and value)of a particular item and,above all,the rules that identify the country from which the item can be considered as originating from,can lead to significant c
302、ompetitive advantages for operators both with regards to commercial and marketing aspects,with a clear reference to the question of the so-called“non-preferential”or“made in”origin,and with regards to a real saving of cost(in terms of customs concessions)by virtue of the numerous trade agreements fr
303、ee trade agreements-entered into by the European Union with third countries with relation to the“preferential”origin concept.6.1.Preferential and non-preferential originA clear distinction,well-established also by the UCC,on the issue of the origin of goods concerns,therefore,preferential origin and
304、 non-preferential origin.Every time a com-52Italy Singapore VietnamItaly-6.A number of customs issues:“origin”and free trade agreements mercial relationship implies a transfer of goods between different countries17,there is the requirement upon the passage through the border customs to establish the
305、 origin of the products involved in the transaction.In this way,the identification of the place of origin(production of the item)makes it possible to use and,make recognisable,an indi-cation of origin universally associated with the“made in”term.This applies when the in-tention is to reveal that a p
306、roduct has undergone in the country reported on the label the last“substantial processing”18.Goods classified as such respond to the non-preferential“rule of origin19”which,in the Union context,represent the general rule defined so as to apply to all products,regardless of the country of final desti
307、nation.The impact of such an indication is substantially commercial,without concessions on import customs taxation.The certificate of non-preferential origin is issued,in Italy,by the competent Chamber of Commerce for the territory20 under the companys direct responsibility.When,instead,an internati
308、onal transaction has as counterparties two enterprises re-spectively resident in countries that have signed up to a bilateral preferential agreement,the origin of the product,with respect to the precise rules set out in the agreement,has a significant impact on import customs taxation.The exporter,i
309、n fact,is able to certify that its products have undergone“sufficient processing21”to attribute the preferential origin of the country of transformation;it will be able to obtain for its customer an importa-tion concession through a reduction or elimination of payable duties.In all events,in an inte
310、rnational relationship,it is not possible to disregard the determination of origin for each individual product.Such indication,therefore,together with classification and val-17 The movement of goods between member States of the European Union does not involve a passage through border customs.18 To e
311、stablish if the operations carried out in a given country on non-original materials are more or less suffi-cient to confer origin to that country,criteria have been established for each category of products;for example,a change of customs heading or a maximum percentage,in value,of non-original semi
312、-finished products,compo-nents and/or raw materials that can be used,or a specific production process that must be carried out,or also a combination of these criteria.19 Specific rules on the theme of non-preferential origin are also contained in annex 22-01 UCC-DR.20 An electronic request for certi
313、ficate of origin can be forwarded to the Chamber of Commerce of the province of the registered office of the exporting entity,of the province of one of its operating units or of the province in which the goods to be exported are situated,subject to authorisation of the Chamber of Commerce of the pro
314、vince in which the exporter has its registered office.Printing of the certificate in the company is possible if the requesting entity is the holder of an“AEO”(Authorised Economic Operator)certification or if it has the status of“Authorised Exporter”or is registered with the“REX”system(System of regi
315、stered Exporters).21 Sufficient processing is considered as a work process that permits a change in the customs heading or com-pliance with one of the other rules provided for in preferential agreements.53Italy Singapore VietnamItaly-6.A number of customs issues:“origin”and free trade agreements ue,
316、represents one of the elements the determination of which is essential for achieving a correct application of customs taxation.Preferential origin,by virtue of the duty benefits granted in customs matters,is cer-tified through documentation issued by the customs authorities22.In the determination of
317、 the preferential origin of goods intended for sale it could be necessary to involve the suppliers,asking them to issue a suitable declaration23 certifying the preferential origin of the sold goods.The European Community regulations on the origin of goods are contained in arts.59 to 68 of the UCC an
318、d in arts.57-126 of ER and 31-70 of the DR.6.2.Free trade agreementsStarting from the second half of the 1980s,there has been a proliferation of formal economic integration agreements entered into between partner countries in order to liberalise trade with reciprocal benefits for the signatories.At
319、international level,three types of agreements can be identified:a.cooperation and partnership agreements that regulate economic relations betwe-en two countries;b.free trade agreements that generate areas of free trade between the signatory countries with the reduction or elimination of customs tari
320、ffs for goods that can be defined as“originating”in one or other of the countries or area that has signed up to the agreement;c.customs unions.The above-described international agreements are of fundamental importance as much for exporters as for importers,since they arise from the aim of supporting
321、 trade between the partner countries and define the ways that related benefits can be obtained.The free trade agreements entered into by the European Union24 provide,in specific or-igin protocols,for reciprocal duty concessions and the relative conditions for application:22 For countries linked to t
322、he Union by bilateral agreements,this refers to Model EUR 1 which is issued by the customs authorities of the exporting country further to the exporters written request;Eur 2 for determined goods types and imports;declaration on the invoice for exports of a value of no greater than Euro 6,000.00;Atr
323、 in the case of exchanges between the EU and Turkey;finally,Form A for developing countries.23 Supplier declaration and long-term declaration(Arts.61 and 62(EU)Reg.2447/2015).24 Companies established in Italy are also fully entitled to benefit.54Italy Singapore VietnamItaly-6.A number of customs iss
324、ues:“origin”and free trade agreements tariff concessions are provided for on a reciprocal basis so that exemptions or reductions regard both products of Union origin exported to partner countries and products origi-nating in said countries intended to be exported to the European Union:the regulatory
325、 sources on the question of preferential origin are therefore the protocols themselves and,alternatively,the rules contained in the UCC.More recent commercial and free trade agreements entered into by the European Un-ion include:Agreement on trade and cooperation between the EU and the United Kingdo
326、m;EU-Vietnam free trade agreement;EU-Singapore free trade agreement;EU-Japan EPA(Economic Partnership Agreement);EU-Canada CETA(Comprehensive Economic and Trade Agreement);EU-Peru Colombia Ecuador Multi-party agreement;EU-Central American Countries Association Agreement;EU-South Korea Free Trade Agr
327、eement.In the following chapters we will outline the main characteristics of the agreements entered into with Vietnam and Singapore.Singapores Economic System57Italy Singapore VietnamSistema Singapore-1.Presentazione del Paese1.Country presentationSingapore is a City-State which extends for 710 sq.k
328、m,situated on the extreme south coast of the Malay peninsula and extends over an archipelago with 58 islands,with the metropolis developed on the largest one.Singapore has 5.45 million inhabitants with a long story of immigration that has led to the presence of various ethnicities with a prevalence
329、of Chinese,Malaysian and Indians,for which in Singapore,besides Malaysian,which is the national language,English,Chinese and Tamil are also spoken.Buddhism is the dominant religion in Singapore with a 33%percentage prevalence,fol-lowed by Christianity at 18%and Islam at 15%.The quality of life in th
330、is City-State is very high,not only because its population has one the highest pro-capita incomes in the world and a widespread high level of education,but also for its particular attention towards environmental protection and sustainability,as a result of careful measures and state-of-the-art polic
331、ies.For this,Singapore is often called the“city garden”.1.1.The political systemSingapore,after abandoning the Federation of Malaya in 1965,became a parliamentary republic within the scope of the British Commonwealth governed according to the West-minster system.The Singaporean Constitution(Perlemba
332、gaan Republik Singapura)of 9 August 1965 established a representative democracy as the adopted political system.The parliament is the single-chamber legislative body and its members are elected in constituencies.The President,who is the leader of the state,is elected by popular suffrage and has powe
333、r of veto for certain decisions such as the use of national reserves and the appoint-ment of judges,but has,above all,representative functions,while executive power is assigned to the Prime Minister and to his/her government.Singapores political system is characterised by high stability,which contributes to creating a secure framework for economic activities in the country,also with a long-term pe