Tax returns in Italy have always been complicated, especially if you are not Italian.
They come with a multitude of regulations and tricky exceptions, which can have a major impact on your wallet.
The first step is to understand and weave your way between the rules, the names of different taxes that change depending on your status, Regional taxes or taxes from your place of residence, exemptions, supplements, medical expenses, CU (Certificazione Unica), Irpef …
While it’s true that there are many complications, the date for submitting your tax declaration is now open so you can’t afford to linger.
It’s time to talk about Form 730.
That’s the Income Tax return form for Employees and Retired Workers. While this list isn’t exhaustive, here are some of the revenue sources that might put you into that category:
- income from employment or income similar to being employed such as contracts for project work contracts.
- income from land and buildings
- capital gains for buildings or land sold
- income from self-employment for which VAT is not required (self-employment services not exercised habitually)
- miscellaneous income (for example, income from land and buildings located abroad)
- some of the income is subject to separate taxation (for example, professional income)
- pension income
Although Form 730 has recently been changed to make it more accessible, it’s still extremely complex because of the many, many different variables that you need to take into consideration.
The new form does have certain advantages. For example, it allows you to obtain a tax refund directly into your payslip (from July) or into your pension (from August / September). Alternatively, if payments are due, these are deducted directly from your salary (from July) or from your pension (from August/September).
What happens if you are an employee of a foreign company or have assets abroad?
You need to understand the implications of your personal working situation when it comes to paying tax in Italy. If you are working for a foreign company, you will have to provide the equivalent of the Italian CU as well as the amount of income received abroad and taxes already withheld or paid in that country. This avoids double taxation and means you don’t pay more than the correct amount.
In principle, you need to have been resident in Italy for at least 183 days to be liable for tax here, but your individual circumstances might play an important part in that evaluation.
In short, Italian tax returns are not for the fainthearted. Here at Italian Connections HCB, we partner with an established firm of professional accounts to make sure your tax return is submitted correctly and on time.
If you have questions or would like to talk to us about handling your Italian tax return for you, just book an initial 15 minute free conversation with our friendly team by clicking on the button below.