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Vehicle choice, Agenzia delle Entrate registration, and the IMU cost most Brazilian investors miss
Can a Brazilian company own property in Italy?
Yes — and sooner than most Brazilian investors expect. Italy imposes no nationality or residency restriction on foreign corporate ownership of real estate. A Brazilian Sociedade Ltda or Sociedade Anônima may appear directly on a notarial deed of sale (rogito) as buyer. No prior authorisation from the Italian government is required. Reciprocity between Italy and Brazil — confirmed under general principles of Italian private international law (Law No. 218 of 31 May 1995) — means the transaction is legally straightforward to complete / execute.
The practical question is not whether your company can buy. It is which structure you should use, and what that structure will cost you every year once the purchase is complete.
Three structures are in common use. Each carries a different cost and risk profile.
Direct ownership by the Brazilian entity. The Brazilian company appears on the notarial deed of sale (rogito notarile), the formal notarised contract that transfers Italian real estate title. The company must obtain an Italian tax code (codice fiscale) from the Agenzia delle Entrate before signing. It will also need to register the deed at the competent Revenue Office (Ufficio delle Entrate). This is the simplest structure from a corporate-compliance standpoint. The risk is that owning and managing Italian property — collecting rent, paying contractors, making decisions locally — may be enough for the Agenzia delle Entrate to characterise the activity as a permanent establishment (stabile organizzazione) of the Brazilian parent. A permanent establishment is taxed in Italy on the income attributable to it.
An Italian branch (sede secondaria). Formally registering a branch in Italy provides a clear tax presence. It simplifies compliance but does not eliminate PE risk — it defines it. The branch files Italian corporate income tax (IRES, currently 24%) and regional production tax (IRAP, currently 3.9% on the net production value) on Italian-source income. For a hotel operation generating Italian revenue, a branch is often the most transparent approach. For a dormant rural estate generating no income, it creates compliance overhead with no compensating benefit.
An Italian limited liability company (Società a Responsabilità Limitata, Srl). A dedicated Italian Srl holds the property. The Brazilian parent owns the Srl's shares. Minimum share capital is €10,000. Formation requires a notarial deed and registration with the Italian Companies Register (Registro delle Imprese), which takes approximately two to four weeks. The Srl obtains its own Italian VAT number (partita IVA) and tax code. This is the vehicle most Brazilian investors choose — and the one most likely to be misused.
The answer the short answer is is: it depends on the nature of the asset and how it will be used. Here is what the comparison actually looks like in numbers.
For a personal purchase of a rural estate from a private seller, transfer tax (imposta di registro) is 9% of the cadastral value declared in the deed, plus €50 for mortgage tax and €50 for cadastral tax — a total of around 9% of declared value, which for a €2 million rural property purchased at market price may represent €80,000–€150,000 depending on the rendita catastale (the annual rateable value assigned by the land registry). Buying from a developer or a VAT-registered seller changes the picture entirely: VAT (IVA) at 10% applies for residential property and 22% for commercial property including hotels.
For a corporate purchase through an Srl, the same 9% imposta di registro applies when buying from a private seller. The Srl itself is subject to IRES at 24% on any net income, and IRAP at 3.9% on the net production value. If the property sits idle — no rental income, no hotel turnover — the Srl still pays annual property taxes (see below). The Srl also adds an annual layer of corporate accounting, auditing (if turnover thresholds are met), and compliance cost.
The decisive factor is the IMU trap, which very few Brazilian investors factor into their decision.
Imposta Municipale Unica (IMU) is the Italian municipal property tax. It is assessed annually on the cadastral revalued value of the property. The rate is set by each Comune (municipality) within the statutory band. For properties not used as a primary residence — which includes all properties owned by a company — the standard rate is 0.86%, and municipalities may raise it to a maximum of 1.06%.
On a hotel or rural estate with a revalued cadastral value of, say, €1,500,000, IMU at 1.06% is €15,900 per year. That figure does not depend on whether the property generates income. It is due whether the hotel is open, closed, under renovation or sitting empty. Unlike income taxes, there is no deduction for costs. It is a pure asset tax.
Unlike in most common-law countries — where an empty commercial property may attract a rates reduction, an exemption during redevelopment, or a grace period before local taxes begin — Italian IMU accrues from the first year of ownership with no vacancy relief, no start-up grace period and no reduction for a company that has not yet commenced trading. The municipality collects it regardless. Brazilian investors familiar with Brazil's IPTU (Imposto Predial e Territorial Urbano) will recognise the concept, but the Italian base rate tends to be higher, and the revalued cadastral value used for IMU is recalculated by multiplying the rendita catastale by a statutory coefficient of 60 for commercial property (category D), or 160 for most residential properties (categories A/C). A hotel registered as category D1 therefore carries a higher IMU base than its cadastral income figure alone suggests.
In addition to IMU, the company owes TARI (the waste-collection levy), whose annual amount varies by municipality and floor area.
This is the question Legislative Decree No. 148 of 7 August 2026 has made urgent.
The PE definition in Italian domestic law follows Article 162 of the Italian Consolidated Income Tax Act (Testo Unico delle Imposte sui Redditi, TUIR). The Italy-Brazil Double Taxation Convention of 3 October 1978 (ratified by Italy with Law No. 844 of 29 November 1980) defines a permanent establishment at Article 5, using language closely modelled on the 1977 OECD Model. A fixed place of business through which a company carries on its business — including a building site, a place of management, or a branch — may constitute a PE.
Article 152 TUIR, as amended by Decree 148/2026 (in force from 12 August 2026, with the new filing obligations applying from the tax period ending 31 December 2026), now requires Italian permanent establishments of non-resident companies to timestamp their financial reports and file a dedicated schedule within the annual Italian corporate tax return. The purpose is to confirm that the financial position of the Italian PE is separately documented and that income attributable to the PE has been correctly ring-fenced from the parent's overall accounts.
The risk for Brazilian companies holding property through a thin Italian Srl — one with no genuine staff, no local decision-making, and no operational substance — is requalification. If the Agenzia delle Entrate determines that the Srl is not genuinely independent, but merely a conduit through which the Brazilian parent conducts its Italian business, the Srl may be disregarded, and the Brazilian company treated as directly operating an Italian PE. The consequence is IRES on Italian-source profits plus IRAP, plus interest and penalties under Legislative Decree No. 472 of 18 December 1997 (D.Lgs. 472/1997).
The PE risk is highest where: the Srl has no employees; the Brazilian parent's directors make all decisions regarding the Italian property; the Srl has no bank account with operational activity; and the Srl files zero-income returns for several consecutive years despite the property having a market or rental value.
Nemo auditur propriam turpitudinem allegans — no one may rely on their own legal irregularity as a defence. An Srl deliberately hollowed out to avoid Italian tax registration will not shield the parent on audit.
The Italian Court of Cassation, Third Civil Division, in judgment no. 26496 of 24 October 2024 (Cass. civ., Sez. III, sent. 24 ottobre 2024 n. 26496), confirmed that the substance-over-form principle applies to the tax treatment of Italian property-holding entities and that an Italian entity may be disregarded if it lacks genuine autonomy from its foreign parent. This is the legal anchor the Agenzia delle Entrate will use.
Whether you proceed via direct ownership or an Srl, the registration sequence is fixed.
Before the notarial deed of sale can be signed, the Brazilian entity (or its Italian Srl) must hold a valid Italian tax code. For a foreign company, this is obtained from the Agenzia delle Entrate using Form AA7, together with a certified copy of the company's constituent documents apostilled under the Hague Convention (Brazil has been a Hague Apostille Convention member since 14 August 2016, with apostilles issued by the Conselho Nacional de Justiça, the CNJ). Allow five to ten working days for the codice fiscale to be issued.
If a new Italian Srl is the vehicle, the notarial deed of incorporation must be filed with the local Chamber of Commerce (Camera di Commercio) for registration in the Registro delle Imprese. The Srl's partita IVA is activated simultaneously. The total formation cost — notary fees, registration duties and the initial contribution — runs from approximately €2,500 to €5,000 depending on the notary and the complexity of the corporate structure.
The deed of sale itself is registered at the Ufficio delle Entrate within 30 days of signing. Registration of the deed and payment of the imposta di registro are the buyer's responsibility unless the contract provides otherwise. The notary typically handles the registration directly.
Once the property is registered in the company's name, the company must file its first IMU return (if the Comune requires one) and arrange payment of IMU by the statutory deadlines: the first instalment by 16 June and the balance by 16 December of each calendar year.
From the tax period ending 31 December 2026, if the structure includes an Italian PE of a non-resident company, the new Article 152 TUIR schedule must accompany the annual corporate tax return. Your Italian tax adviser and your Brazilian lawyer will need to co-ordinate the documentation to ensure the financial reports of the Italian entity are separately timestamped and filed.
Setting aside income taxes (which depend on whether the property generates revenue), a Brazilian company holding a €2 million Italian hotel or rural estate should budget annually for the following recurring costs:
IMU ranges from 0.86% to 1.06% of the revalued cadastral base. For a category D1 hotel, the revalued base is the rendita catastale multiplied by 65 (the coefficient for category D properties acquired before 2012, or 60 for properties re-assessed since then) and then by 1.05. The result is often materially lower than market value, but the tax is still substantial. On a property with a rendita catastale of €20,000, the revalued base is approximately €1,260,000, and IMU at 1.06% is approximately €13,356 per year. TARI is levied separately and varies widely by municipality and surface area; budget an additional €2,000–€8,000 for a mid-size rural property.
If the Srl generates no income and has no employees, it still owes the annual Registro delle Imprese fee (approximately €200–€500 per year depending on the Comune) and corporate accounting costs.
If it generates hotel income, IRES at 24% applies to net taxable profit, and IRAP at 3.9% applies to the net production value — which excludes labour costs under the standard method but includes interest and some overhead.
In our files, the most common mistake is forming an Italian Srl for the property purchase, filing the company's first-year corporate return showing zero income, and never revisiting the structure. Three years later, when the property is sold or refinanced, the client discovers that the Srl's dormancy — combined with the Brazilian parent's visible control of the asset — has attracted an Agenzia delle Entrate audit notice questioning PE characterisation. By that point, undeclared interest income (if the parent lent money to the Srl at zero rate) and unpaid IMU instalments have accrued penalties under Decree 472/1997 that often exceed the original compliance cost. The structural review should happen before the deed is signed, not after the audit letter arrives.
As the economist Albert Hirschman observed in his work on institutional inertia, organisations — and tax structures — tend to persist not because they were optimal when created, but because the cost of change is deferred until it becomes unavoidable. Do not let a registration convenience become a tax liability.
Does a Brazilian company need an Italian tax code before buying property in Italy?
Yes. Any foreign entity that signs a notarial deed of sale in Italy must hold an Italian tax code issued by the Agenzia delle Entrate before the deed is executed. The notary will require it. Obtain it in advance — the process takes five to ten working days and requires apostilled corporate documents from Brazil's CNJ.
Is IMU payable even if the Italian property is empty and not generating income?
Yes. IMU is a property tax levied on the cadastral revalued value of the asset, not on income. A company-owned property that is vacant, under renovation or not yet operational still owes IMU by the 16 June and 16 December deadlines each year. There is no vacancy relief or start-up exemption under Italian law.
What changed under Decree 148/2026 for Brazilian companies with Italian property?
From the tax period ending 31 December 2026, Italian permanent establishments of non-resident companies — including thin Italian Srls that may be requalified as PEs — must timestamp their financial reports and file a dedicated schedule with the Italian corporate tax return. A Brazilian company that has not confirmed whether its Italian structure constitutes a genuine subsidiary or a PE must carry out that review before filing its 2026 Italian return.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
