FILE YOUR TAXES IN ITALY IN 2024

Just like every year, the Italian tax season is approaching fast, and we are facing new updates and changes from past years.
Filing taxes and assessing your tax liability (or refund) might be confusing and nerve wracking, however, this article sheds some light on the matter.

Not everyone is required to file taxes. The following individuals are exempt from filing taxes:

• Individuals receiving only exempt income
• Individuals receiving employment income from a single employer
• Individuals receiving income taxed at source (i.e. dividends)
• Individuals receiving employment income of € 8,000 or less
• Individuals receiving retirement income of € 7,500 or less

If you want to claim any deductible item, you should file your return and claim your tax refund.

Italian residents are taxed on the WORLDWIDE INCOME regardless of their citizenship, while non residents are ONLY taxed on the INCOME MADE IN ITALY.It does not matter where your income is made or what citizenship you have, if you are a tax resident of Italy, you MUST pay taxes on any income made anywhere in the world.

Individuals in Italy can pay taxes using these forms:

• Mod. 730
• Mod. Redditi

The Mod. 730 can be filed by employed individuals, while everyone can file taxes using the Mod. Redditi.

The Mod. 730 process tax refunds FASTER than the Mod. Redditi.

The Italian tax year is the same as the calendar year, running from January 1st to December 31st; the 2020 tax season is about income and expenses incurred during 2019.The main tax return deadline is November 30th 2020, however, the earlier deadline of September 30th applies only to Mod. 730.

If you miss the November 30th deadline, you can still file your taxes within 90 days paying a late fine of € 25.00.
​
Check also the video below for more informations about this.

Unfortunately Italy has no mitigating factors, nor amnesty program in place. If you miss the deadline you face FULL FINES and PENALTIES.First of all, you will receive a general fine ranging from € 250.00 to € 1,024.00 for not filing taxes on time, and if your return ends up in a tax liability, a further fine ranging from 120% to 240% of each tax liability is applied.

Finally, if you were required to disclose any foreign asset, you will face a fine of 3% up to 15% of the asset value (doubled if your asset is held in a black listed country/jurisdiction).

Be aware that each fine applies to EVERY missed tax return.

Check also this video about tax controls in Italy or our video about tax overdue in Italy.

The Italian tax code allows individuals to recover deductible items paid during the fiscal year. Among the most common deductible expenses there are:

• 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
• Innovative startup investment
• Seismic Bonus

​
You can then offset those items against your tax bill to reduce your tax expenditure and possibly claim a tax refund in Italy.
If you are going on holiday in Italy, check also our article about Italian tax refund.

The first thing you have to check is the Double Tax Treaty in place between the foreign country and Italy; if there is any provision to avoid taxation of foreign income in Italy.In any case, you can ALWAYS deduct any tax paid abroad against the liability calculated in Italy; therefore, if the Italian tax payable is higher than the foreign country one, you are required to pay the difference. On the contrary, you do not have to pay anything.

In few words, foreign taxes do not add up, you subtract one from the other.

Regardless of the fact that your tax return ends in a liability or not, you are required to disclose your Foreign Income.
Check out article about the flat tax for foreigners living in Italy or our article about tax credit for foreigners coming back in Italy.

​Only Italian residents are required to disclose foreign held assets. The following items held abroad must be declared:

• Residential and commercial properties
• Bank accounts
• Deposit accounts
• Shares owned in private or public companies
• Investment portfolio
• Boats, yachts, and airplanes
• Precious metals
• Artwork
• Life insurance and stock options
• Private pension funds
• Cryptocurrency

If you paid any tax in the foreign jurisdiction, you can use the TAX CREDIT to avoid double taxation!

Accounting Bolla is the leading chartered tax accountant in Italy for expats. We can help you out in sorting your tax position as well as filing taxes, keeping your tax affairs in order.Want to read more? Check also our guide about freelancing in Italy, or retiring in Italy.