ARTICLE · 28 OCTOBER 1998
1998 Tax Developments: Regional Tax on Productive Activities (IRAP)
ItalyLitigation, Mediation & Arbitration
Ernst & Young - correspondent to Ernst & Young
1998 Tax Developments: Regional Tax on Productive Activities (IRAP) for Manufacturing Enterprises, Professionals, Non-Residents and Other Entities
The Regional Tax on Productive Activities (IRAP) was introduced by Legislative Decree No. 446 of December 15, 1997 as an implementation of the delegation provided for by the 1997 Financial Act.
The purpose of this tax is to simplify the tax system by reducing the number of taxes applicable and to start the process of regional tax autonomy.
1. Features
IRAP is a regional tax on net production deriving from the activity carried out on the territory of a Region.
If the activity is carried out in the territory of several Regions, the net production value must be proportionally split among the regions where the activity is carried out, by considering, as a general rule, the amount of compensation due to all personnel. To this regard, some specific rules apply for banks, financial
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