Country Report

Italy upstream fiscal summary

04 July 2018

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04 July 2018

Italy upstream fiscal summary

Report summary

Italy follows an open-door licensing policy, where companies can apply for available acreage at any time. Upstream licences are awarded under concession terms which are fixed by legislation. Royalty rates range from 7% to 10%, depending on permit location and hydrocarbon type. An initial amount of oil and gas production is exempt from royalty every year (varies by location, 400 to 1,000 b/d of oil and 2.42 to 7.74 mmcfd of gas). Corporate income tax is levied at 24%. A regional income tax of 3.9% is also levied for onshore operations. There is no state participation in upstream licences.

Executive summary
Current licence, equity and fiscal terms
- Basis
- Licence terms
- Government equity participation
- Fiscal terms
  - Ring fencing
  - Bonuses, rentals and fees
  - Royalty
  - Indirect taxes
  - Corporate income tax
    - Income tax
  - Fiscal treatment of decommissioning
  - Product pricing
  - Summary of modelled terms
    - Italy Concession Terms
Fiscal stability
- Recent history of fiscal changes
- Stability provisions
Economic analysis
- Split of the barrel and share of profit
- Effective royalty rate and maximum government share
- Progressivity
- Fiscal deterrence