DONATION AND INHERITANCE TAX IN ITALY

Italy is largely known for its high level of general taxation; however, some tax rates are sensibly lower than those applied other OECD Countries.
Read the full article to understand the Donation and Inheritance tax in Italy!

Donation and Inheritance, what is the difference?

Donation and Inheritance share the same tax rates, albeit being two very different events.
Donation is defined as the transfer of property of asset(s) between individuals (or entities) with no compensation given to the donor.
Inheritance is defined as the transfer of property of asset(s) after the death of the proprietor to those entitled to succeed.

​Tax rates

The tax rates vary depending on the donee relationship with the donor. The table below provides a summary of the tax rates applicable.
Relationship with the donor
Tax rate
Nil band
Spouse or direct descendant
4%
 1,000,000 for each donee
Sibilings
6%
€ 100,000 for each donee
Other relatives up to the 4th degree of relationship
6%
N.A.
Other individuals or entities
8%
N.A.

How do I value the amount of a donation?

The calculation of the total amount of a donation varies depending on the goods, financial instruments, and properties transferred.
Financial instruments are easy to evaluate; in fact, they are evaluated based on the market value at the time of the donation.
Properties located in Italy, on the other hand, are evaluated based on the cadastral value multiplied by a coefficient; depending on the type of property, a different coefficient applies.
If the property is located abroad, the value is determined as follow:

  • Cadastral value (if available)
  • Purchase cost (if available)
  • Market value

Finally, other goods (such as artwork, yachts, luxury goods etc.) are evaluated at the current market value

Are there any other taxes applicable to the donation of properties?

The donation of properties requires the donee to pay the following taxes on the donation of properties:

  • Imposta Ipotecaria at a rate of 2%
  • Imposta Catastale at a rate of 1%

​The tax base value is the same as the donation tax base.
Note that these taxes only apply to the donation of properties!

Do I require a notary to perform the donation?

The notary is required to perform the donation

When taxes are paid?

Taxes are levied and paid when the donation occurs.

How can Accounting Bolla help you?

Accounting Bolla can help you through the different stage of the new tax regime:

  • Case analysis and tax estimate
  • Legal and tax implication overview
  • Assets valuation
  • Notary appointment

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