Personal taxes in Italy

There are three prinicipal income taxes which have to be paid as well as contributions to the State pension and social security scheme (INPS). Taxes can be paid on your behalf by your employer, deducting from your salary. If you are self employed then you have to make the tax payments yourself. 

CUD

The CUD is an annual declaration of taxes witheld from your payslips by your employer. An employer must issue the CUD on or before the 28th of February every year. The CUD is used to detemine the taxes already witheld in a fiscal year.

Tax Returns

Tax returns can be filed in May and June and there are two methods of making your return: 730 & UNICO

730: This option is only available to people who are employed by companies and who do not have secondary sources of income*. The 730 can be self compiled or compiled by an authorised entity. In both cases the form is electronically submitted to the tax authorities via the authorised entity (this service is free if self compiled). The tax payable or receivable is then added to or deducted from the payslip of the next July and/or November.

UNICO: This tax declaration can be made by all tax payers. The main difference from the 730 is that any taxes to be paid have to be done so directly by the tax payer, or, in the case of a credit, the tax payer must make a claim to the authorities. 

Italian Taxes

There are three prinicpal taxes to be paid on income in Italy. IRPEF is the National income tax and then there are regional taxes and municipal taxes which can vary and depend on where you are fiscally resident. 

For 2014 the rates of IRPEF are:

  • 0 - €15,0000  23%
  • 15,001 - 28,000  €3450 + 27% of the excess of 15,000
  • 28,001 - 55,000 - €6950 + 38% of the excess of 28,000
  • 55,001 - 75,000 - €17220 + 41% of the excess of 55,000
  • over 75,000 - €25420+ 43% of the excess of 75,000

There are various credits available for "dipendenti" (employees), as well as people with children  or supported people (non working spouse). The credit depends on the level of salary and decreases, the higher the salary. 

 

As of May 2014 there will be extra credits for employees, in particular those who have incomes in the 25-30,000 range. 

 

Regional and Municipal taxes vary on the location of residence. For a comprehensive list of taxes please click the following links (in Italian)  for Regional and Municipal

INPS

Social security contributions are taken off at source by employers and are about 9% of salary. Employers also contribute a further 28-30%. For self employed workers the rate of INPS ivaries from 25-29%.

How and when do I pay?

As mentioned above taxes payable are deducted from pay-slips and paid by employers.

Balances/credit are paid/reimbursed from July pay-slips (and in some cases November). For self employed workers, taxes can be paid in June, or spread over 5/6 months from June/July to November. The same goes for INPS. Taxes and INPS are payable in advance, therefore the payment usually involves the calculation of any residual debt/credit from the previous year and then the advance payment of the current year.