ITALIAN TAX COMPLIANCE
Basis: Residents are taxed on worldwide income, nonresidents are taxed only in Italian-source income.
Residence: For income tax purposes, an individual is deemed to be a resident if he/she is registered at the civil registry or is domiciled in Italy for more than 183 days.
Taxable income: Individual income tax is imposed on employment income, self-employed income, income from capital, business income, income from immovable property and other miscellaneous income. A special tax regime is available for inbound employees under certain circumstances (50% of taxes) and researchers and highly skilled employees (90% of taxes).
Capital gains: No capital gains tax on the sale of immovable property held more than 5 years.
Deductions and allowances: Available for dependents, employment income, social security, family charges, medical expenses, etc.
Rates: The personal income tax is progressive, rising to a top rate of 23-43%. Additional regional taxes may apply. Under certain circumstances, a flat tax of 10% may apply. Interest and dividends are taxed at a flat rate of 26%. Qualified participations are taxed at the ordinary income tax rat on 58.14% of the dividends and capital gains received.
Real property tax: Primary residence is not taxed. All other property is taxed: IMU (wealth tax) 0.76%-1.06% of the value of the property; TASI (tax for services) 0%-3.3% depending on the municipality. TARI (garbage tax) depending on the municipality
Inheritance tax: 4%-8% of assets and rights inherited, depending on the relationship between the deceased and the beneficiaries. Exemptions apply to close relatives.
Net worth tax: Financial assets held abroad by a resident (i.e. bank accounts, participation, etc.) are taxed at 0.2% of the market value. Immovable property outside Italy is taxed at 0.76% of original cost or market value.
Social security: See tax treaty and totalization agreement.
Other taxes: An additional 10% tax is levied on bonuses, stock options, and variable payments paid to directors operating in the financial sector.
Tax year: Calendar year.
Filing and payment of taxes: 23 July of the calendar year following the tax year. Extension possible until 31 October.
Penalties: Penalties and interest apply for late filing, failure to file and tax avoidance and evasion.
Value-added tax (IVA): 4%-22% applies to most purchases and transactions depending on transaction or purchase.