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Italian Tax Man

Italian Tax Man

Old Apr 3rd 2018, 8:59 am
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Default Italian Tax Man

Good Morning everyone,

Firstly great site. My wife and I have recently bought a property in Citta Della Pieve. We have some bookings for holiday rentals already. My question is do I need to pay income tax in Italy? We both have Codice Fiscal numbers but we are not residents.

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Dean.
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Old Apr 3rd 2018, 9:30 am
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Default Re: Italian Tax Man

Yes. Your house is in Italy and therefore the income from renting it is taxable in Italy. You can opt for a cedolare secca which is a flat rate at 21%. You will need a commercialista to file your tax return which is due by 16 June - so any booking for this year will fall under your 2019 tax return. Also be aware you may have a local tassa di soggiorno for your comune. Some booking portals online will now deduct your tax and in some cases tassa di soggiorno at point of booking.

Last edited by modicasa; Apr 3rd 2018 at 9:34 am.
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Old Apr 3rd 2018, 10:41 am
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Default Re: Italian Tax Man

Thanks for your reply Modicasa. So any rentals received after the 16th of June will be part of 2020 tax return? Is it much the same as the uk where I just give the commercialista a file of outgoings and a file of income?

Kind Regards Dean
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Old Apr 3rd 2018, 11:51 am
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Default Re: Italian Tax Man

We are in the same position as you. modicasa as usual gives the correct advice. Unfortunately, however, outgoings don’t count. You pay ‘cedolare secca’ on your gross rental income. No deductions unlike the UK I’m afraid. I do actually think that it does simplify things compared to the previous regime with less scope for your return to be challenged. The Italian Tax system is quite different from the UK and if I could give any advice as someone who has rented out for almost 20 years it would be to forget about thinking in UK terms. Taxation in Italy is pretty steep and always has been. Dodging the taxman is a national sport but if you get caught the penalties are severe. That said, on a positive note as a UK resident any Italian Tax paid on your rental income should be offsetable under the double taxation treaty against your UK tax liability.

Good luck.

CB.

Last edited by Capo Boi; Apr 3rd 2018 at 11:53 am.
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Old Apr 3rd 2018, 12:02 pm
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Default Re: Italian Tax Man

Thanks CB that’s great advice too. Do you use a commercialista In Italy? Also if I have no rentals before the 16 th of June do I still need to submit a return?

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Dean Kidd
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Old Apr 3rd 2018, 12:03 pm
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If you are looking for an accountant based in Umbria send me a pm.
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Old Apr 3rd 2018, 12:35 pm
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Default Re: Italian Tax Man

Hello Deano. Yes I have always used a commercialista. Up until maybe ten years ago I was resident in Italy so it came from there and I just carry on with the same person. I pay €250 per year and they look after my local rubbish taxes, IMU etc. as well. I am not sure on the actual official timing of when tax payments on rental income are due in Italy but I have a feeling that under ‘cedolare secca’ (if you go down this route) they are due pretty sharply. I paid in September 2017 for my July and August 2017 rentals. I will be able to reclaim in the UK on my 2018-19 tax return.

Last edited by Capo Boi; Apr 3rd 2018 at 12:37 pm.
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Old Apr 3rd 2018, 2:46 pm
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Default Re: Italian Tax Man

My income tax as a freelancer is based on calendar years (anno solare), so in June 2018 I will submit my return for the Jan-Dec 2017 tax year. I *think* this is what modicasa was getting at in his/her initial reply but I can't be certain.
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Old Apr 4th 2018, 5:20 am
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Default Re: Italian Tax Man

[QUOTE=Deanokidd;12475003 So any rentals received after the 16th of June will be part of 2020 tax return? Is it much the same as the uk where I just give the commercialista a file of outgoings and a file of income?

[/QUOTE]

Italy runs on the solar year. So any income in 2018 is declared in the 2018 tax return submitted by June 2019, and payable in 2019 (Hope thats clearer)

If you opt for cedolare secco there is no outgoings box to fill in. If you opt to pay tax at your normal tax band - (fine if its 23% less fine if its 40%+), then you can offset certain outgoings against your income.

Last edited by modicasa; Apr 4th 2018 at 5:25 am.
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Old Apr 4th 2018, 5:53 am
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Default Re: Italian Tax Man

Capo Boi is right. If you opt for cedolare secca you pay 'on account' 95% of the tax due intwo tranches - June and November, with the balance payable in the following June. (I think that for the first year of operation you dont pay like this, but I may be wrong).
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Old Apr 4th 2018, 10:29 am
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Default Re: Italian Tax Man

Thanks for all the help Guys � ����
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