Taxation Issues

It is not easy to understand or decipher the Italian taxation system. There are a myriad of taxes that have to be paid and they can vary from year to year. Deadlines change frequently and it is also hard to know, especially for foreigners, what taxes have to be paid.

In order to try and simplfy the process we have divided this area into three distinct sections which are listed below. We hope that you can find the information that you are looking for here but, if there are any other tax issues that you may have, then please feel free to contact us by clicking here or calling us using the number listed below.

Personal Taxes

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. 

Corporate Tax

There are two corporate taxes to be paid in Italy. IRES, which is set at 27,50% and IRAP which is set on a regional basis and varies between 3,9% and 8,5% (depends on region and type of company).

 

Both taxes are payable as follows:

Any balance from the previous year and 40% of the current year's total is payable in mid-June. This can be delayed until mid-July with an added sanction of 0,40%. The remaining 60% balance is payable in November. In recent years, however, the tax authorities have increased this amount, so that companies end up paying over 100% of their expected taxes during the year. 

 

IRAP is calculated on the activity of the company. As a rule of thumb, therefore, it is the total income minus direct productivity expenses (excluding payroll costs). 

US taxes

We have linked with a partner who has over 20 years experience in U.S. International Taxation for U.S. Expatriates and Foreign Nationals. They will prepare your U.S. Income Tax Returns and ensure you are filing accurate & complete U.S. Tax Returns and taking full advantage of the special deductions available to U.S. Persons living abroad, such as the Foreign Earned Income Exclusion, Foreign Housing Exclusion, and Foreign Tax Credits. They will also prepare & file your Foreign Bank Account Report (FBAR) Form FinCEN 114 (if applicable), which if not filed results in a minimum $10,000 non-filing penalty imposed by the U.S. Treasury Department.

They can also assist you with International Tax Planning for U.S. Persons to help you lower your U.S. Tax burden.

Contact Us to set up an appointment with them.