FAQs

The law on residency changed slightly at the beginning of 2024 so that now if you are physically present in Italy for over half the year (183 days in a normal year, 184 in a leap year) then this on its own is enough for you to be considered tax resident in Italy. Part days count as whole days, so you also need to account for any days flying in or out. A further change is that registration on the Anagrafe of your Comune is now considered only as an indicator of residency, and is no longer considered conclusive. This may be of help if you are actually resident elsewhere, but for various reasons find it convenient to be registered on the Anagrafe. These are not the only grounds for residency however and as this whole area has always been, and remains, complex, if you are in any doubt please contact us for help.

If you are tax resident in Italy then you are under an obligation to declare all your income worldwide and all the assets you hold outside Italy in an Italian tax return. This includes any income you may already have declared elsewhere, although you may be entitled to some form of tax relief under the relevant Double Tax Treaty.

There are two wealth taxes in Italy, one is the tax on overseas property, called IVIE and the other is a tax on financial assets you hold overseas, known as IVAFE. The category is very broad and applies to investments, bonds, stocks and shares, financial products, precious metals, even valuable vehicles such as luxury cars or yachts. Pension funds, including both private pensions and occupational pensions, are not subject to tax, but the end of year value of the pension needs to be declared.

In general IVIE is levied at 1.06% on the purchase price of the property while IVAFE is levied at 0.2% of the value of the asset at the end of the year. Where financial assets are held in countries on the Black List, the IVAFE is doubled to 0.40%. In the case of bank accounts IVAFE is charged at a fixed rate of €34, regardless of the balance in the account. Bank accounts with an average balance of less than €5k throughout the year, do not pay IVAFE.

This will depend on what you are paying tax on. In general once you are tax resident in Italy you shouldn’t need to pay tax or have tax withheld on your income overseas – you will need to inform your home country of your new tax status. However there are exceptions, the most common being for rental income. If you receive rental income from a property outside Italy, you will first need to declare it in the country where the property is situated. And then, as it still forms part of your worldwide income, you will need to declare it again in your Italian tax return. You should receive credit for the overseas tax paid under the terms of the relevant Double Tax treaty.

If you work as an employee, then your employer will take care of the tax withholdings from your pay as happens in many countries, and each year you will receive a CU which summarises this. You will still need to file an Italian tax return if you have more than one employment, or if you have any other income or any assets overseas to declare.

If you wish to set up as self-employed, then you will need to register for IVA (known as taking out a partita iva) and with INPS, the social security institute. You will also need to issue electronic invoices, which means inputting the information from each invoice you issue through the centralised Italian system.