Taxes in Italy

Last updated: November 20, 2019

Anyone wishing to emigrate to Italy must also pay taxes there. There are various other taxes in addition to income tax, such as, for example, the basic income tax or social contributions. In order to be well informed before emigration, you can read the most important points on taxes in Italy from Sirelo.

Tax Liability in Italy

As in many other European countries, you will be taxed in Italy if your permanent principal residence is in Italy or for a stay of more than 183 days in a 12 month period. If you live in Italy for less than 183 days then you can only be taxed on money that is made there. In addition, you also have to pay tax in Italy if make an income there.

In order to be able to pay its taxes in Italy, the Codice Fiscale (tax number) must be requested from the tax office. This tax number is also important for other government offices and is not used when it comes to taxes. This is a legal requirement and you cannot receive a salary without it.

Taxes in Italy

Taxes in Italy: Income Tax

As previously mentioned, there are different taxes in Italy. One of the most common taxes in any country is income tax. In Italy this tax is deducted before the income is paid. Furthermore, the respective tax rate is measured at the amount of the annual income.

The percentages have risen sharply in recent years and the country’s difficult economic situation is predicted to continue to rise in the next few years. Currently the percentage of income taxed is:

IncomeTax rates
€ 0 – € 15,00023%
€ 15.001 – € 28,00027%
€ 28.001 – € 55,00038%
€ 55.001 – € 75,00041%
From € 75,00043%

If you are a resident of Italy your worldwide income is taxed in Italy. If you are not then only the tax taken from incomes from Italy will be taxed there. In addition to this there are several exceptions where foreigners are given a special tax status. More information about this can be found in the local Italian tax offices. The UK has an agreement with Italy (and many other trading partners) in order to avoid the double taxation of citizens.

Filing a tax return in Italy

You employer deducts income tax and social security contributions from your salary before it is paid into your account. If this is your sole source of income then it is not necessary to file a tax return. In the case that you need to file a tax return it must be done (online) by 30 September.

If you believe that you have been taxed the wrong amount then you can appeal to the tax office.

Taxes in Italy

Other Important taxes in Italy

Another tax, which should be considered when paying taxes in Italy, is social insurance or social contributions (INPS). The amount you have to pay varies according to your employer and profession. Usually the employer must contribute between 28% and 30% of gross wages and the employee 10% of his wage. There is also VAT in Italy. This amounts to 22% on all goods and services with exceptions from pharmaceuticals, hotels, restaurant passenger transport, event tickets and books. The value-added tax rate for these goods is somewhat to around 4%.

There is a basic purchase tax when it comes to a real estate purchase which is between 3% and 7% of the stated value.

What Next?

For more information about Italy and life there you can visit our page moving to Italy and working in Italy.