Article 165 of the Italian Consolidated Income Tax Act (TUIR) governs the foreign tax credit for income taxes paid abroad, applicable to IRPEF and IRES taxpayers.

This fiscal tool aims to prevent international double taxation, provided that specific legal requirements are met.

Key Aspects:

• Foreign taxes must be effectively due and paid.
• The credit cannot exceed the theoretical Italian tax due.
• Any excess can only be recovered under specific provisions.

This regulation ensures a balance between national and international taxation, preventing double taxation on the same income and encouraging foreign investments within a framework of legal certainty.