File taxes in Italy

FILE TAXES IN ITALY

6/13/2017

Just like every year, we are approaching the tax season in Italy; filing taxes and assessing any tax liability (or refund) might be confusing and nerve wracking.
I hope to clear some doubts about filing taxes in Italy.

Who has to file taxes?

Not everybody has the obligation to file taxes. Some individuals are exempt from filing taxes:

Exempt income
Individual receiving employment income from a single employer
Individual receiving income(s) already taxed at source (i.e. dividends)
Individual receiving employment income below € 8,000
Individual receiving retirement income below € 7,500

Of course, if an individual has deductible items to claim there is no obligation to file taxes, however he/she cannot receive any tax refund.

I am an Italian resident, should I file taxes?

Italian residents are taxed on the WORLD WIDE INCOME regardless of their citizenship, while non residents are ONLY taxed on INCOME MADE IN ITALY.

It does not matter where your income is made or what citizenship you have, if you are resident you have to pay taxes on any income made anywhere in the world

Which tax module should I file?

Individuals in Italy can pay taxes using two forms:

Mod. 730
Mod. Redditi

Mod. 730 can be filed if the Individual is employed when taxes are filed, while everyone can file taxes using the Mod. Redditi.

Which are the deadlines?

Mod. 730 requires taxes to be filed before July 23rd.
Mod. UNICO requires taxes to be file before October 31st.

How long is the Italian financial year?

The Italian financial year starts January 1st and ends December 31st; therefore, in 2017 we file taxes on 2016 income.

Which deductible items can I claim?

The Italian tax code allows individuals to recover deductible items paid during the fiscal year. The following list focuses on the most common deductible expenses:

Family members deduction
Health expenses
Loan interest paid on main residency
Kindergarten fees
College tuition and fees
Rent paid
Family member sport expenses
National Insurance Contribution paid
Expenses for building renovation & recovery
Forniture renovation expenses
Expenses for building energy efficiency improvements

What about foreign assets?

Italy requires its residents you to declare some financial instruments and properties held outside Italy. The following items have to be declared:

Residential and commercial properties
Foreign bank accounts
Shares owned in private or public companies
Financial investments
Boats, yachts, and airplanes
Precious metals
Artwork
Life insurance and stock options

If any taxes is paid in the foreign jurisdiction, you can use it as a TAX CREDIT to avoid double taxation!

How can Accounting Bolla help you?

Accounting Bolla is a chartered tax accountant in Italy. We can help you out in sorting your tax position as well as filing taxes, keeping your tax affairs in order.

12 Comments

Author

After moving back to Italy from the United States in 2013, I realized how much an accounting and tax firm was needed to help expats living in Italy to comply with the local tax regulations.

My idea seeded when I had to go through the complicated Italian tax system myself, and that’s when I started Accounting Bolla. Its mission is very simple, yet utopian: to make Italian taxes easy and manageable.

At Accounting Bolla we aim to help our clients with straightforward solutions.

Since 2017 we can proudly claim to have helped thousands of clients in optimizing their taxes and in safely investing in Italy.

We help EU based ecommerce business selling in Italy. If you are confused about Italian VAT we'll handle that.

David Granito

9/29/2018 07:23:48 am

I am a dual citizen with US and Italy. I established residency here in late November 2017. My retirement income is from the US and is taxed there accordingly. When do I start filing taxes here in Italy? My understanding is that the is an agreement between the US and Italy in that I would not pay taxes on US income to Italy? Also, I would start filing taxes here in 2019 for 2018.

Nicolò Bolla

9/29/2018 12:12:29 pm

Dear David,

As an Italian resident you are required to disclose and pay taxes on your worldwide income; it may be possible that your pension income is exempt based on the Tax Treaty between Italy and the USA.

Since you moved to Italy in late 2017, you are not required to file your taxes this year; you have such obligation next year (2019) to do so.

If you need any help in filing your taxes, feel free to reach out.

9/29/2018 12:24:06 pm

Thank you for the information. I will definitely be reaching out to you next year. We are outside Florence. Is that a problem?

9/29/2018 12:25:32 pm

I provide a full tax service online, so being outside Florence is not a problem at all.

Joseph

10/3/2018 03:59:37 pm

Nicole,

I found your blogpost on taxes from Damien OFarrell on the Ultimate Italt FB group. I have a question: I am dual-citizenship (USA/Italy). I am planning to relocate to It'll (possibly Firenze) in Feb-March 2019. For work I will be working remotely from home (computer in apartment in Italy) for an American company based in Texas. They will pay me directly into my American bank account, already taxed. My question is, since I am a citizen and will be a resident, will I be taxed AGAIN on my already-taxed American income? Or do I get a waiver or something? Thanks in advance!

Nicolo Bolla

10/3/2018 04:04:31 pm

Dear Joseph,

The question you raised is very interesting. Normally, you are not taxed twice on the same source of income, yet some exceptions apply.
Could you please reach me at my email n.bolla(at)accountingbolla.com?
I

Hugh holland

1/21/2019 12:16:35 pm

Hi my wife is an Italian citizen and I moved here and got a soggiorno di famiglia in Aug 2018. I am retired U.S. military and that is my only income.

I recently inquired at the comune about obtaining an Italian carta d'identita. I was told I would have to fill out a cambia di residenza and change my residence to Italy. I thought I was already a resident with the soggiorno, so I am confused.

I don't want to make my tax situation more complicated. If I only have the soggiorno and no Italian income, do I need to file a tax return? If I follow through on the cambia di residenza and get a carta d'identita, will I have to file a tax return?

We are married in comunione. Thanks- Hugh

1/21/2019 08:41:17 pm

Dear Hugh,

A permesso di soggiorno is a visa allowing you to stay in the Country, whereas a residenza is the declaration of being settled in a Comune.
Regardless of the residenza, if you stay in Italy for most of your time you should file taxes here; however, there are some mitigating cases in which you should not file your taxes.

In any case, you are not required to file taxes for FY 2018, yet you might be required to file for FY 2019.

Virginia Hamilton

3/17/2019 08:29:03 am

I am a resident of the US who lives in Florence. My only income is Social Security and two retirement pensions, plus whatever interest I earn. I have no financial holdings in Italy. Am I required to file an Italian tax return? Thank you for your help.

3/17/2019 11:24:47 am

Dear Virginia,

In order to ascertain if you have to file your taxes in Italy you must know if your retirement pensions are public or private. You can contact us using our form in the home page.

Kind regards

3/18/2019 11:09:13 am

Thank you for your prompt response to my first email. My pension income is 58 percent retirement from a government agency, 33 percent Social Security, and 9 percent from a private entity.

3/18/2019 12:38:50 pm

You should then report the Social Security and the Private pension fund.
Contact us and we can provide you a quote for the return

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