Insurance in Italy: Withholding tax obligation on commissions for intermediation services

The Italian Revenue Agency, in Ruling No. 269/2024, has clarified the withholding tax obligations on commission paid by insurance companies to insurance agents and brokers.  

Article 25-bis of Presidential Decree 600/1973 imposes withholding tax obligations (withholding tax at 23% rate – ritenuta di acconto – on 50% of the amount of the commissions) on commission for services relating to intermediary services. The fifth paragraph provides an exemption on commission paid to “insurance agents for services rendered directly to insurance companies” and “insurance brokers for their relations with insurance companies and with general agents of public insurance companies or their subsidiaries that provide services directly to insurance companies on a reciprocal exclusive basis.” This exemption was repealed on 1 April 2024 by Article 1, paragraphs 89 and 90, of Law 213/2023.

A French insurance company operating in Italy requested the ruling. It wanted guidance on whether the withholding tax applies to commissions paid to intermediaries involved in selling travel insurance and home insurance policies. The company asked whether commissions paid to travel agencies and utility companies – which distribute these policies as part of their service – should be subject to withholding tax. It especially asked about cases where the intermediaries don’t have to register in the Insurance Intermediaries Register (Registro Unico Intermediari – RUI) according to art. 107, par. 4, of the Private Insurance Code, since they carry our intermediary activities on an occasional and ancillary basis.

In its ruling, the Italian Tax Authorities clarified that, following the amendment introduced by the Italian Budget Law 2024, the exemption from withholding tax for commissions paid to insurance agents and brokers ceased to apply as of April 1, 2024. The tax authorities emphasized that the withholding tax obligations apply to all commission related to insurance intermediation services even if performed as a secondary and ancillary activity and the intermediaries aren’t registered in the RUI – ie travel agencies and utility companies – if they offer insurance intermediation services.

According to this interpretation, the withholding tax obligation applies to all the entities that provide insurance intermediation services, regardless of their registration status, to ensure equal treatment among the operators providing services of the same nature.

So insurance companies should pay the withholding taxes to the Treasury by the 16th day of the month following the one in which the withholding taxes were applied.