730 Tax Form in Italy: what it is and how to fill it properly
This income tax return form is the result of the tax agency trying to simplify paying taxes so as to encourage citizens to pay them in full and on time. It is becoming increasingly popular due to its efficiency and this past year, a record number of people made use of it.
Of course it is not obligatory to use this form. Taxpayers are welcome to file using the Modello Redditi which is the old standard, but many find the 730 easier and more straightforward. Like many other things there are exceptions: if you made a large purchase, such as a home, then you are obliged to use the 730. This might seem like a hassle if you are used to filing in another way, but the 730 form is not set in stone.
While the tax agency tries to simplify the process as much as possible (going so far as to provide Italian tax information in English), it is still recommended that you find an accountant when filing any official tax form. Let’s dive in!
What’s different with respect to the Modello Redditi?
The 730 is a simplified form. It comes already filled in with your details courtesy of the Agenzia delle Entrate , which is the Italian Tax authority. So, when compared to the modello redditi, this form requires much less work on the part of the taxpayer. The details they provide can be changed, or not, which has its pros and cons. We’ll look into this later.
If the applicant has a tax credit they have the ability to get their refund directly into their bank account. Because the document itself is provided by the tax authorities, this process is much faster than the traditional method.
If there is a balance on which the taxpayer must make a payment, however, it is the intermediary’s responsibility to provide the Modello F24 with the amounts to be paid to the taxpayer.
Additionally, there are many factors which can be assessed regarding deductible expenses. To name a few examples: a large family and dependent children, medical expenses (including goods from the pharmacy), any mortgage costs, insurance premiums, tuition, public transportation fares, nursery school fees, and so on. A good accountant will be able to help with this.
What are the tax deadlines in Italy?
The main tax return deadline is November 30th 2020. The earlier deadline of September 30th applies to Mod. 730 only. This information is also covered in our other article: Filing Taxes in Italy.
What tax reimbursement methods are used in Italy?
When using module 730, tax credits are received faster, especially if you submit an unaltered form of the document. The Revenue Agency is then able to add the funds directly to your bank account.
Pros and Cons of Changing the 730
As mentioned before, the 730 comes with the information about each individual’s taxes already filled in. That does not mean that the information can not be changed before the document is sent off. Now changing a tax document does come with some risks, the primary one being that you become exposed to error which in turn means paying a penalty fee. As of 2020, approximately 1 out of every 5 taxpayers accept the data that is input by the Revenue Agency without making any alterations.
The biggest benefit, perhaps, of not changing any information in the form is that you will not be subject to further tax checks, i.e. an audit. Taxpayers will not be formally audited concerning the documents relating to the expenses in the tax returns including things like: doctors or health centers, pharmacies, universities, banks, insurance companies and other items.
Now, you can also choose to change some of the information. The 730 is considered changed if your alterations are related to the expenses that you have. When doing this it is recommended that you consult with an accountant to be sure of the conditions of a particular expense and not risk exposing yourself to a penalty fee. It is always possible that you will have some tax deductible expenses that occur after the form is compiled by the Revenue Agency which will need to be added to the form.
Is salary earned from working abroad taxed in Italy?
In short, yes. Italy taxes its citizens based on their worldwide income. All income tax must be declared in the forms. Non-residents have the advantage in this case, as their taxable income is that which is made only in Italy.
Where can I find the 730 form?
In order to view your personal Module 730 it is necessary to visit the link through the Agenzia delle Entrate website, which is only available (for now) in Italian, German or Slovak. There are three different ways to gain access: SPID (public digital identity system), INPS PIN, and with a National Service Card. Using the information provided by INPS is the easiest option as it should always be on hand.
If you need further information, read our article about how to file your tax returns in Italy (including exemptions).
Check also our video about how to pay taxes in Italy.
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.