Tax In Italy

A Contractor's Guide to Taxes : 

One of the most consistently challenging aspects of contracting in Italy is complying with the country’s tax system. As well as paying tax in Italy, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income: 

If you’re working in Italy under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Italy for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Italy, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Italy through PAYE is left with the prospect doing everything themselves.

Do you know much about Italian Tax Law? Does Italy have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Italy can range from 23 to 43 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator: 

If you are a contractor and want a calculation on your tax and net retention in Italy, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax : 

Contractors in Italy are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. An Italian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Italian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Italian tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax: 

We work with numerous umbrella companies in Italy, many of whom are experts in tax and immigration laws. If you have any questions about tax in Italy, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Italian work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Italy but without the overhead of directly dealing with the Italian tax authorities. Get in touch with us today for some reliable advice on tax in Italy!

When Do You Need to Lodge Your Tax Return?: 
30 June
Tax Filing Deadline : 
7 July
Can you file it online? : 
Yes, http://www.agenziaentrate.gov.it/wps/content/nsilib/nsi/servizi/servizitrasversali/altri/desktoptelematico/indice+desktop+telematico
Currency: 
Euro (EUR)
Tax-free Threshold in: 
None
Grossed Income: 
0-15,000
Tax Rate: 
23%
Grossed Income: 
>15,000-28,000
Tax Rate: 
27%
Grossed Income: 
>28,000-55,000
Tax Rate: 
38%
Grossed Income: 
>55,000-75,000
Tax Rate: 
41%
Grossed Income: 
>75,000
Tax Rate: 
43%
How long does it take to set up: 
6 days
How much does it cost: 
Fixed: EUR905.87 (if capital < EUR516,456.90) – EUR1,112.46 (if capital > EUR516,456.90); Variable: 0.6%-1.4% of start-up capital (notary fees) + EUR16 per 100 pages (stamp fee) and EUR25 per book (registration fee)
Is it easy? : 
Starting a Business Rank: 66/190 (Source: World Bank)
How to File Taxes in: 

Step 1: Obtain a PIN Online

Request a PIN here to access Fisconline. You will receive the first part (4 digits) of the PIN online. The second part of the PIN (6 digits) will be sent to you by post within 15 days.

You will be required to enter the following data:

  • Fiscal code (as shown on your Codice Fiscale or Italian tax code card)
  • Type of declaration e.g. 730
  • How to intend to file taxes e.g. Telematic Services (online), Revenue Office, or Post Office
  • Total income declared (in Euros, without decimal points)

Step 2: Access Fisconline

After obtaining a PIN, you can access Fisconline here. To log in, you need your Username (fiscal code), Password and PIN.

Step 3: Download the ‘Telematic Desktop’

The ‘Telematic Desktop’ is an application that allows you to view documents, enter data, and file taxes. You can download it from the Agenzia Entrate website here.

Step 4: File Taxes via the ‘Telematic Desktop’

Use the ‘Prepara file’ function under ‘Documenti’, to prepare data on your tax obligations. Comprehensive instructions can be found on the Agenzia Entrate website here.

It is recommended that you consult an Italian translator as the instructions and software are in Italian.

Notes: 

Regional and Municipal Taxes

  • Regional tax is due on the same taxable income. Rates depend on the region in which the individual is domiciled at 1 January, and are usually between 0.7 and 3.33%.
  • Municipal tax is due on the same taxable income. Rates depend on the municipality in which the individual is domiciled at 1 January, and are usually between 0 and 0.9%.
Does the 183 day rule apply in: 

Yes

When do you become a tax resident in: 

You become a tax resident in Italy when:

  • You are registered in the Office of Records of the Resident Population for 183 days or more;
  • You stay in the territory of the state for 183 days or more; or
  • You have your centre of business or economic interests in Italy for 183 days or more.
Am I taxed on my global income in: 

Residents are taxed on their worldwide income.

Non-residents are taxed on Italy-sourced income only.

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