Returning to Italy? Advice needed (residence, retirement, INPS, tax)

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Sep 6th 2020, 10:10 am

#31

Geordieborn

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Re: Returning to Italy? Advice needed (residence, retirement, INPS, tax)

Quote:

Originally Posted by 657

Going back to the issue of income tax on UK-based rental income.

In the UK, I am currently being taxed at a rate of 20% on an annual income of roughly £29K GBP (32K Euro).

Taking into account my tax-free allowance of £12,500 this equates to £3,320 per annum.

How would Italian income tax (IRPEF) be calculated on this?

The current rates are:

0-15,000 Euro = 23%
15,001-28,000 Euro = 28%
28,001 - 55,000 Euro = 38%

Would I be expected to pay 38% tax on all of my income?

Or, would the tax rates be applied successively i.e 38% only on what I earn between 28K-32K Euro?

Also, should I bite the bullet and return to Italy is there an initial tax-free allowance? (Would the UK's tax-free allowance be recognized?)

Thanks again for any advice.

To put it simple, as I understand it Italy would take into account any double tax, but that would be a case of calculating tax under their system, deducting any UK paid and hitting you with the difference. The UK allowance would be the sting in the tail as it makes your UK tax so little. I'm sure there was something recently about a retirement flat tax of 7% in Italy for "x" amount of years? But who knows as things change there on a daily basis. Currently, 3 months in Italy, then you should be applying for residency. This may change, in your favour in some ways, after Brexit.

Sep 7th 2020, 5:00 am

#32

modicasa

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Re: Returning to Italy? Advice needed (residence, retirement, INPS, tax)

Thanks Geordieborn. Good to know. Ive always fancied a day out it Strasbourg! If INPS ever allow face to face appointments again, Ill ask them!

Sep 7th 2020, 8:57 am

#33

Geordieborn

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Location: Ex Teramo, Abruzzo

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Re: Returning to Italy? Advice needed (residence, retirement, INPS, tax)

Chuckle.... ! We used to deal with cases and then put them away to await a reply with a date 1-2 months forward. For the southern Italian offices like Palermo it was 3-4 months - upwards of 6 months in summer! Good luck Modicasa!

Sep 28th 2020, 9:12 pm

#34

Bernieboo

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Re: Returning to Italy? Advice needed (residence, retirement, INPS, tax)

Hi there, italy have made a new law that expats moving to the south of Italy, Sardinia or Sicily will pay only 7%tax on pensions and investments if they move to a town with less than 20,000 inhabitants. There are also tax benefits for non retirees. Check it out.