28.05.2026 -
The concept of a permanent establishment is a fundamental principle of both international and domestic tax law. It defines the economic presence of a foreign company in a country other than the one in which its headquarters are located. The existence of a permanent establishment may subject the foreign company to specific tax, accounting and social security obligations in the country where it operates.
In particular, for foreign employers with employees working in Italy, the existence of a permanent establishment may trigger the same social security obligations that apply to Italian employers. Conversely, where no permanent establishment exists, the foreign employer may be required to appoint a social security representative or establish a representative office.
The legal framework governing permanent establishments is based on various sources, including Article 162 of the Italian Income Tax Code, Presidential Decree No. 633/72 for VAT purposes and EU Regulation No. 282/2011.
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