DISCLOSING FOREIGN HELD ASSETS WHEN LIVING IN ITALY

12 Comments / Blog, Immigration, Residency And Citizenship In Italy / By Nicolò Bolla

Everyone living in Italy, including foreigners, can be fined € 10,000 or more each year if they fail to report ownership of foreign bank accounts and foreign corporations. Foreign pension funds and foreign properties also must be reported.

Accounting Bolla has years of experience helping individuals protect their assets.

Table of Contents

Which assets must be disclosed?

According to the Italian legislation the ownership of the following assets must be disclosed:

Bank accounts.
Pension funds.
Equity investments in foreign companies.
Investments in government and corporate bonds.
Stock options.
Foreign currency contracts.
Derivative contracts.
Unit trusts, funds and certain types of with-profit insurance contracts.
Land and properties.
Precious metals.
Artwork.
Registered yachts and boats.

How much are the fines for not disclosing?

Failure to disclose the foreign held activities will expose the taxpayer to the following fines:

A general fine ranging from € 258 to € 1,000 for not disclosing.
3% – 15% of the value of the asset at the year end if held in a white-listed country.
6% – 30% of the value of the asset at the year end if held in a black-listed country.
120% – 240% of any tax due.

These fines apply to every tax year, on top of any tax due.

Example of how it works.

Let’s say you have a UK pension fund worth € 300,000

Failing to disclose it will expose you to a minimum fine of € 9,258 (€ 258 + 3% of the value of the asset) for each year your failed to disclose the fund.

On top of that fine, failure to disclose foreign assets can be considered a felony in some circumstances.

How can we help?

Accounting Bolla is a certified tax preparer in Italy with expertise in national and international tax issues.

You can count on our experienced and dedicated English speaking tax professionals to help you avoid unnecessary fines and tax payments. We will take care of your foreign asset disclosure as well as filing your Italian tax return.
Fill our questionnaire about tax return to get a quote.
Or watch our video with essential tips and suggestion regarding the payment of tax in Italy.

12 thoughts on “DISCLOSING FOREIGN HELD ASSETS WHEN LIVING IN ITALY”

William Morrow
March 9, 2022 at 4:23 am

I have had a private pension fund in the U.S. for many years. Since moving to Italy in 1995, I have not been able to control the account nor have I made any payments into the account nor received any revenue. Last year, I retired and took my first distribution from the fund. This will be reported as income on my 2021 Reddito and tax will be paid. Do I need to be concerned about not reporting this fund in previous years when I had no control and could not conduct any transactions?

Reply
1. Nicolò Bolla
  March 9, 2022 at 10:56 pm
  
  unfortunately there is not much you can do for the past years. My advice is to start reporting your private pension funds from now onwards
  
  Reply
Dipanjan Bhattacharya
March 16, 2022 at 10:16 pm

I started working in Italy since 2018. I worked in Singapore for 10 years and have a savings account there. I have not earned any money from Singapore and have no property, investment, source of income outside Italy since I came here. I recently received a letter that I have not declared the foreign bank account. It was found as I transferred money to Italy and bought a house in Milan. I was not told that I need to declare. This was not intentional. Do I have to pay a fine?

Reply
1. Nicolò Bolla
  March 18, 2022 at 10:49 pm
  
  You may have to disclose your foreign held assets, can you please get in touch with us?
  
  Reply
Molly M Last
May 14, 2022 at 9:00 pm

Hi Nicole
I’m in the process of gathering documents for the ERV visa. I am a member of Smart Moves Italy. I have USs pension income from my work as a public school teacher and I know this pension is not taxed in Italy. I just started receiving monthly lifetime. income from an annuity from this employment and am unsure how this income is taxed if I choose to live outside the 7% tax zone ( ie: Firenze). Is this annuity taxed as regular income and at what %?
Thank you for helping me clarify this!
Sincerely,

Reply
1. Nicolò Bolla
  May 17, 2022 at 9:53 am
  
  it is taxable at regular IRPEF brackets (23%+)
  
  Reply
  1. Gijé Halsey
    October 3, 2023 at 8:47 pm
    
    What’s the deadline for declaring foreign assets?
    
    Reply
    1. Nicolò Bolla
      December 5, 2023 at 5:57 pm
      
      November 30th 2023, however you can file up to 90 days after with a € 25 fine
      
      Reply
Steve Davis
May 25, 2022 at 9:24 pm

Hi,

I recently moved to Italy from abroad. My home in UK has been rented out for several years. I declare the income in UK as a non-resident landlord. I would like to clarify how much I need to pay each year related to this. I understand I need to pay 0.76 % of the purchase price as IVIE. I also need to pay tax on the rental income – is this the net income as calculated on my UK tax return? Or do I need to report gross income? What about deductions such as mortgage interest payments, maintenance, rental fees etc, which are deductible in UK? What documents do I need to support this? For the IVIE I understand I need proof of the purchase price. What about rental income – is my UK rental income statement issued each year by the UK tax office sufficient, or do I need to provide receipts for payments and proof of income received, etc. Thank you for your help.

Reply
1. Nicolò Bolla
  May 29, 2022 at 9:49 pm
  
  you need to disclose your purchase price as IVIE, and you need to disclose the same value you disclose in the UK regarding the rentals to be paid in Italy
  
  Reply
  1. Philip
    March 22, 2023 at 11:34 am
    
    Hi, Does this mean that Italy will respect all deductable costs that the UK allow?
    
    In the UK if you let your house as a furnished holiday rental, then all your costs offset against the income, including maintenance and energy bills and mortgage interest etc. So you could let your house for 50k per year and perhaps only make 10k of profit. In the UK you pay tax on the 10k profit.
    
    Would Italy simply want to to tax that 10k number? Or would they not agree that all the expenses are deductable from an italian perspective?
    
    Thanks
    
    Reply
    1. Nicolò Bolla
      March 23, 2023 at 2:12 pm
      
      they tax the same figure as in the uk
      
      Reply