Samsonite

Hi all,

This is really a number of questions based around the same thing.

I will be moving to Milan later this year because my girlfriend is starting a job there.

For me personally, I haven't decided exactly what to do jobs-wise, but have some options which I am considering and wondered which one would be the best in terms of living in Italy.

Here are the options:

1. Stay with my current employer (if they agree to let me live in Milan and work for them). This is currently a 50/50 option in terms of likelyhood. I travel quite a bit for work and it would generally work out cheaper to fly from Milan to various places than catch UK trains (and obviously going abroad is pretty much the same). I can also do some of the work from home anyway.

2. Do freelance web development or provide IT services on a freelance basis to either UK or Italian clients. Never done freelancing, so this would be a harder to get started even if I was not moving to Milan!

3. Find a job with an Italian company and essentially be part of the Italian workforce. Sounds nice at first, but apparently working conditions, pay and benefits are much worse compared to working for a UK company...

Big question(s) time:

May main question about all this is how I would be treated as an Italian resident based on the circumstances. The constant factor is that my girlfriend will be working in a Milan office (but for a global company) and paid in Euros.

Are there any bad points about working for a global company and getting paid in GBP (like is it harder to become a "proper" resident)? Does it make any difference if my girlfriend works in Milan?

And generally, which option would make life easier in Milan/Italy? Is it frowned upon to earn GBP and pay UK taxes or is this not an issue?

If anyone has got to the end of this post and is still awake, I would love to hear anyone's thoughts!

Thanks,
S

chris120

If you are resident in Italy (ie you live in Italy for more than 183 days a year) you have to pay taxes in Italy irrespective of where your salary is paid, there are a few exceptions to this such as unearned income paid in another country or salaries of crown employees. Your girlfriend's situation is irrelevant.

lindaf

Hi Chris

How is the fact that someone is working outside of Italy but living in Italy for more than 183 days a year actually checked?

Does the system work solely on self-certification or do the various countries swop information?

Lorna at Vicenza

Lorna

chris120

Italy has a world wide income, self assessment system very similar to the UK. The onus is on the individual to file a tax declaration each year. They do check up, without formal residence you will find that you are unable to do certain things or find them much more difficult, bank accounts, mortgages, buying vehicles, etc.

Mr Posh

I am confused In what chris has said:

I own a small company in the uk and I do not pay tax in Italy as all my money goes into a uk bank and i do not earn anything here

The EU states: If you are employed in one country only, then the employment earnings would be liable to income tax in that same country

My accountant told me that you can not pay taxes in two countries as we are in the EU.

I spoke to my bank here in Cesena and they said as long as they have the propper documentation and proof of earnings from my accountant in the uk there is no reason why i could not get a mortgage here.

Lorna at Vicenza

I don't know much about taxes at all (except that they have to be paid )
but some of the rules did change this year in April and here is a link to the new official blurb from HMRC.

Chapter 8 is for people leaving the UK or not living in the UK.

It might help somebody.
http://www.hmrc.gov.uk/cnr/hmrc6.pdf

Samsonite

Thanks for the replies.

It does seem quite complicated. Apparently I will still be a UK resident if I go back to the UK for an average of 91 days or more (quite likely with my current job).

I think I may just have to play it by ear as the laws seem to be set up for uncertainty anyway!

Thanks,
S

Mr Posh

I do not earn a peny here all my income is in the uK and i go back every 2-3 weks for a week. that is why the accountant said what he said (I think) looks like i will have to have another word with him

Mitzyboy

It doesnt matter where you earn your money. Its about where you are tax resident and coming back to the UK for a week every 2 - 3 weeks wont make a difference. Your worldwide income will be taxed in your country of tax residence (in your case Italy) and you have to apply to the UK Govt (Form FD9 for Spain) to have your tax "zero rated" in the UK. You wont be taxed twice (in the long term) as there is a double taxation treaty in force, but in theory the Italians could come to you demanding money with menaces

There are certain exceptions, such as Civil Service Government Pensions

Lorna at Vicenza

Mr Posh, this is for you - taken from the UK / Italy double taxation agreement.

ARTICLE 7
Business profits
(1) The profits of an enterprise of a Contracting State shall be taxable only in that State
unless the enterprise carries on business in the other Contracting State through a
permanent establishment situated therein. If the enterprise carries on business as
aforesaid, the profits of the enterprise may be taxed in the other State but only so much of
them as is attributable to that permanent establishment.







http://www.hmrc.gov.uk/international/italy-dtc.pdf

Samsonite

"Nothing in life is certain, except death and taxes" :P

lindaf

What happens with someone working in the UK, earning less than £6,500 a year but living in Italy? The £6,500 is the current UK personal tax allowance limit and so earnings under this amount wouldn't normally be taxed in the UK.

Lorna at Vicenza

Linda ..... I don't know but I do know that in Italy one can earn up to 5.000 tax free euro per tax year without having to do any kind of tax forms.

chris120

I am no expert but the situation as i understand it is that if you are an employee of an Italian company (UK equivalent of PAYE) and you have no other income then you need not file an individual tax return as your employer will do all that. However if you have any other income such as a second job, investments or foreign income or, for that matter, any unusual allowances (uni or medical fees etc) then you would need to file an Italian tax return. Your £6,500 (Say EU7,500) is probably declarable wether you would have a tax bill depends on the other details of your individual situation.