Frequently Asked Questions About Italian Taxation for Foreigners

As Italian accountants in the UK we are asked questions by people who are a bit baffled by the Italian tax system. Here a few of the most common questions and Antonio’s answers.

Q.

I have a property in Italy and would like to rent it out for holiday lets. Do I have to pay tax on this income?

A.

Yes, the income from renting a property in Italy is taxed in Italy. You need to make an Italian tax return and declare these amounts.

Q.

What other complications are there in renting out my Italian property?

A.

Rental periods of longer than 30 days need to be registered with the Italian tax office. You need to pay stamp duty on the contract (which will need, where necessary, to be translated into Italian) and a registration tax of 2% of the rental. You also need to take details of the person renting your property and inform the local police.

Q.

Do I need to register for VAT or get a licence?

A.

This is a very complex area. If you are considered to be carrying on a rental business then you need to apply for an IVA (VAT) number and register for social security (INPS). You should also inform your local Comune as to what you are doing.  There are a number of factors involved in deciding what constitutes a professional business and each case needs to be considered on its merits. This is where an Italian accountant can help.

Q.

What is IMU and Tasi and when do I pay them?

A.

IMU is a local property tax and Tasi a service tax. They are due on Italian properties owned by non-residents and are collected in June and December each year by the local Comune. These taxes are also due on luxury properties, even where they are owned by Italian residents. The amount payable is based on the cadastral value of the property and differs from Comune to Comune. Some Comune now have online calculators to help you arrange payment by yourself – if not we can always calculate the amount you owe and organise the payment for you.

Q.

What is a Codice Fiscale and do I need one?

A.

A codice fiscale is your own personal tax code. You need one for day-to-day tasks such as opening a bank account, buying a property, connecting utilities etc. You can apply for one at any Italian tax office or ask your commercialista (Italian accountant) to do it for you.