Geofract

Hi,

Currently I'm a UK resident, considering a move to Italy. I'm busy learning to the language, and have friends in Milan, who are helping me find out various bits of info.

But I am a little unclear about Self Employment VAT rules, specifically the VAT registration threshold in Italy, mainly because there's an assortment of conflicting info online. Could someone who is self employed, please tell me the VAT registration threshold for a Sole Trader?

Also, from what I understand, there is no tax allowance whatsoever in Italy?

Thank you

modicasa

no ta allowance and no VAT trheshold. Once you are registered for VAT at the CCIAA, you pay INPS and VAT - its a different set up completely from the UK. You pay, on time and regularly. If you ever need a refund you will wait for 10 years, maybe more. The self employedin Italy are treated appallingly - they are the backbone of the country and are shafted completely.

Caprihana

We've been self employed for 18 months after also being the same in the UK, and as modicasa says it's very different!

You'll need to speak to a commercailista. A sort of accountant, who will help you through the minefield of start up, paying tax/INIPS and when.

When we started there was the option of 2 'schemes', one 5 % tax for 5 years and then on to the standard rate which I think is 23% up to 15,000 then 27% and upwards on a scale (I'm sure someone will put that right if I'm wrong) and INIPS (National insurance type contributions) which for us are 27%. There was another scheme which was a fixed rate where you pay according to 'sector'. That was a fixed rate of say 67%. You didn't have to account for any of your outgoings you just pay tax and INIPS on 33% of your earnings.

I think what you have to get over is that it will cost you more, it isn't easy like the UK and you have to get used to not knowing exactly where you stand as things are always changing.

Good luck!

Efes123

Both the missus and me have been self-employed for almost 2 years. There are several schemes for 'new starters' called minime (sp). The one we both have is a 5-year agreement where we pay 10% tax on 67% of our income and 14% INPS. We are limited to earning a maximum of 20k each on this scheme, but we can earn outside of it at different tax rates.

What you pay very much depends on what type of work you do, there are literally dozens of schemes, all with different rates.

As above, you will have to have a commercialista - there is no option of doing your own books unless you have a qualification in Bureaucracy.

Geofract

Thank you all for the replies, they're very helpful! And apologies for my slow reply too!

This is positive news, in that, in theory I may be able to find a scheme where I pay a lower personal tax rate for a few years. It may not be an allowance like the UK has, but it would be helpful none the less.

Can I ask, do you as self employed also charge/account for VAT on top at 22%, and post returns qtrly, or are your VAT liabilities included within the scheme? In the UK you can turnover £83k before registering for VAT - is there anything similar in Italy, or just simply no allowance!?

Thank you again

Efes123

We don't have to register for VAT - I'd hate to even consider the bureaucracy involved in that

Geofract

Aha, ok, that is very good news! So in a sense, there is a VAT allowance/threshold, at least for the self employed, probably depending on the 'scheme' you are part of.

I was told by various people that I would need to start accounting for VAT when my sales exceeded 5k euros. That would be a disaster for me! I will try and consult a commercialista and find out more.

Thank you!

Efes123

Not too sure how it works with selling stuff - I sell services (proofreading). Deffo best to check with a good commercialista

modicasa

Any dispensations are usually age related - a yong person can get a few years leeway. Its not a threshold though, its an 'agevolazione' which can be stopped at any time.