I hope to clear some doubts about filing taxes in Italy.
Who has to file taxes?
Not everybody has the obligation to file taxes. Some individuals are exempt from filing taxes:
- Exempt income
- Individual receiving employment income from a single employer
- Individual receiving income(s) already taxed at source (i.e. dividends)
- Individual receiving employment income below € 8,000
- Individual receiving retirement income below € 7,500
Of course, if an individual has deductible items to claim there is no obligation to file taxes, however he/she cannot receive any tax refund.
I am an Italian resident, should I file taxes?
Italian residents are taxed on the WORLD WIDE INCOME regardless of their citizenship, while non residents are ONLY taxed on INCOME MADE IN ITALY.
It does not matter where your income is made or what citizenship you have, if you are resident you have to pay taxes on any income made anywhere in the world
Which tax module should I file?
Individuals in Italy can pay taxes using two forms:
- Mod. 730
- Mod. Redditi
Mod. 730 can be filed if the Individual is employed when taxes are filed, while everyone can file taxes using the Mod. Redditi.
Which are the deadlines?
Mod. UNICO requires taxes to be file before October 31st.
How long is the Italian financial year?
Which deductible items can I claim?
The Italian tax code allows individuals to recover deductible items paid during the fiscal year. The following list focuses on the most common deductible expenses:
- Family members deduction
- Health expenses
- Loan interest paid on main residency
- Kindergarten fees
- College tuition and fees
- Rent paid
- Family member sport expenses
- National Insurance Contribution paid
- Expenses for building renovation & recovery
- Forniture renovation expenses
- Expenses for building energy efficiency improvements
What about foreign assets?
Italy requires its residents you to declare some financial instruments and properties held outside Italy. The following items have to be declared:
- Residential and commercial properties
- Foreign bank accounts
- Shares owned in private or public companies
- Financial investments
- Boats, yachts, and airplanes
- Precious metals
- Life insurance and stock options
If any taxes is paid in the foreign jurisdiction, you can use it as a TAX CREDIT to avoid double taxation!