Tucked away in the corners of last year’s budget lies a very generous incentive to incoming workers. It comes in the form of an extension to a scheme which originally aimed to encourage graduates to live and work in Italy. The scheme was then broadened to cover anyone working in specialist or highly qualified positions and finally has now been extended to cover any persons coming to work in Italy, including those registering as self-employed. Under the scheme, qualifying workers are granted a 50% reduction in their chargeable income. Further, where INPS (social security) is calculated on the basis of chargeable income this will also effectively be reduced by 50%. – not a bad offer in a high-tax environment. The incentives last for a period of 5 years. The qualifying requirements are that the worker is registered as resident in the local Comune, and that the work they do is carried out principally in Italy. Workers are expected to remain resident for a minimum of 2 years. The taxman is entitled to recover the value of the underpaid tax if you move away before the end of the two-year period. You need to be quick, though – if you want to qualify you have to show that you started work, whether as employed or self-employed, within 3 months of making your permanent move to Italy. If you want more details of this, or any of the other anti brain-drain schemes, please contact us.

The consequences of the new law on tourist rentals (D.L. 50/2017) are still far from clear…but help is at hand. One of the many problems of operating in this field has been the lack of guidance as to what makes an activity a business (which requires registration for IVA) and what counts as a non-business activity. In the absence of clear legislation on the point, professionals and clients have been left making a “best guess” at what a non-business rental might look like. This has included consideration of various factors such as overall turnover, number of guests, length of season, services offered, method of marketing etc. In the past a definitive finding has only emerged when the Agenzia has investigated and reached its own conclusions – a little late for those hoping for clarity beforehand. Now, we are told, the cavalry is on its way. It comes (or will come) in the form of a ministerial regulation to be issued by 19th September 2017. We are told the regulation will set out the criteria on the basis of which a tourist rental activity would be presumed to be exercised as a business. With the hope, of course, that by avoiding these criteria, the rest of us can sleep more easily, secure in the knowledge that the rental activity we run does not require registration for IVA. We await the publication of the regulation and will report back.  

Further updates about the important changes to the treatment of rental income in Italy mentioned below – the new Airbnb law. Recent legislation (D.L. 50/2017) introduces new rules on tourist rentals, which are defined as those of under 30 days. As of 1st June 2017 there will be an option to have the gross rental income taxed at a fixed rate of 21% under what is known as the “cedolare secca”. No costs are allowed against this income. We should make clear that for those who rent out their property directly, without using online portals or other intermediaries, this is only an option, so there is nothing to prevent you continuing to declare the rentals as you have to date.