Scorpy

Hiya guys! I'm an Irish resident with the possibility of a job offer in northern Italy and I'm finding it hard to decide whether the move is financially viable. As far as I can make it out, the first 7500 euros of income are tax exempt, but I'm not too certain of that. I have a family (one child) who will remain living in Ireland if I go. Can anyone help me out with the allowances so I can calculate my net monthly based on the information I already have? Any and all information is appreciated. So far, all I can make out is that I'll be nearly 500 euros a month worse off based on my current salary, and I have to put in a bid on what I need to earn to break even! This is obviously not a runner, so clarification would be great!

chris120

I don't know what irish tax levels are but for the same salary an Italian tax bill will be (more or less) the same as in the UK, the minor difference would be insignificant compared to the other costs you would incur in Italy. If you leave your family in Ireland then your costs there will, presumably, remain more or less as they are now so to break even your employer would have to cover all your Italian living costs so:- Car, rent, utilities and about EU20K of un receipted cash allowances a year (a daily cash allowance). In order to make it financially worth while you need a small profit on top of that. You should also negotiate in a number of trips back home a year and your relocation costs out and back including temporary hotel and agents fees, cost of furnishing etc. Most expatriate packages are made up like this although more and more companies are going to local recruitment or transfer to local terms. To be more precise you need to let us know if this is a permanent or temporary transfer, if any promotion or salary rise might result etc

Scorpy

It's 12 months of a contract initially, but there is a lot of travelling involved, so I would hope that much of my living expenses on trips would be taken care of. They are offering around 2G a month accommodation and expenses while in Italy. This probably wouldn't be too bad around Sesto Calende, but I have to clarify if this is just associated with Italy or if this is to cover all accommodation including trips abroad. If just Italy, fine, if everywhere, probably not so good. It is a bloody nice place though!

chris120

People will tell you that many are living on less than EU2K a month and whilst that may be true it’s because they are Italian and have no option or are desperate to live in Italy for personal reasons and so willing to forgo a better standard of living. From what you say neither of these reasons applies to you. You are doing it for career or financial reasons.
If your employer picks up all your incidental travel costs and you are away a lot then 2k month would cover an apartment, utilities etc What about a car? That can cost quite a bit and be difficult to manage. What happens after 12 months? Can you go back to your old job? Is that guaranteed? Will they help you find accommodation in Italy? From what you say after you’ve looked around a bit you would be asking for less than 12 months of rental which is not so easy. You will also incur significant agent’s fees etc.
Don’t forget all allowances given to you (rent, cars, fuel, utilities etc) are treated as taxable income just as they are in the UK and if you are in Italy for more than 183 days in a year you will have to file an Italian tax return on your world wide income.
Sesto Calende looks OK in the spring and summer but not so good in autumn and winter, there are some expats around, mostly working in the Agusta factories.

lindaf

If your annual worldwide income is less than the personal tax allowance in both countries, therefore no tax is actually paid from earnings, what happens then?

chris120

Lindaf,
Scorpy's WW income clearly won't be less than the tax free allowance, in any case i did say "file a tax return" the amount of tax payable then depends on the total amount of income less any allowance.

lindaf

Sorry Chris - I shouldn't have interrupted the thread with a different question. What I meant was would a different person, under 65, earning a total of £1,500 pa in the UK have to file a tax return in Italy when they are under the tax allowance for both countries?