ritenute

Ritenute is a term used in Italian tax and accounting to denote amounts that are withheld at the source from payments made to recipients. These withholdings are collected by the paying entity and remitted to the tax authority as an advance payment of the recipient’s tax liability, with the withheld amount later credited against the recipient’s annual tax return.

Ritenute may apply to various types of income, including compensation for work (salaries and professional fees), income from capital (interest and dividends), rents and royalties, and other taxable payments. The specific withholding rate and rules depend on the category and applicable law, and may be an “acconto” (withholding as an advance payment on income tax) or a withholding at source of the tax due on the payment. In the case of employment income, the employer withholds the IRPEF at source and provides the employee with a certificate showing the amounts withheld; for professional services, the payer withholds a ritenuta d’acconto and the recipient can claim a credit in the annual return.

Ritenute are administrative obligations for the payer; the payer must apply the correct rate, issue the necessary attestations, and file payment with the tax authority through the appropriate forms. The recipient uses the withheld amounts as a credit to reduce their final tax liability. If the withholding exceeds the tax due, the excess is refunded or carried forward according to the rules.

Etymology: the term derives from ritenere, meaning to withhold. In law, ritenute play a central role in tax collection by ensuring revenue at the source.