Withholding tax, known in Italy as 'Ritenuta d’acconto', is a tax mechanism where a client withholds a portion of a payment due to a service provider or freelancer and pays it directly to the tax authorities on their behalf. This system ensures that taxes are collected at the source of income, reducing the risk of tax evasion. The withheld amount is considered an advance on the provider’s annual tax liability, and the provider can offset it against their total tax due when filing their tax return. Withholding tax is commonly applied to freelance work, consultancy, and other professional services. The exact percentage and rules may vary based on local tax regulations.