EXPLAINED: The rules and deadlines for filing Italian taxes in 2022
As the first deadline approaches for some, here's a reminder of the key dates and what you need to know about filing your Italian taxes this year.
Who has to file a tax return in Italy in 2022?
Whether you are a resident or non-resident in Italy, you'll need to file taxes in Italy.
That is unless you either receive employment income from a single employer in Italy, make an income taxed at source (such as money gained from dividends), earn an income of €8,000 or less from employment, or receive a retirement income of €7,500 or less. In these cases, you are not required to fill out a tax return.
For everyone who does need to file taxes, the rules differ slightly depending on your circumstances.
Those who are resident in Italy - which includes people who live in Italy more than 183 days per year, making it their primary residence – are taxed on worldwide income.
READ ALSO: What’s the difference between Italian residency and citizenship?
This is true regardless of where the income is generated from and you must take your earnings from everywhere into account. Therefore, if your primary residence is in Italy and you make money from the US, Canada or the UK for instance, you must pay taxes on that income to Italy.
Your citizenship doesn't change this requirement.
Non-residents on the other hand, such as those who have a second home in Italy, only pay taxes on income made in Italy.
If you are a second-home owner in Italy however there are taxes you need to pay on the property. See here for details.
When are the deadlines for filing this year?
The final deadline for filing taxes is November 30th 2022, but there are other instalments to be aware of, depending on your personal circumstances.
Some tax deadlines were extended under reforms made under Italy's Fiscal Decree for 2022, with a view to aiding economic recovery following the impacts of the pandemic.
Originally, the deadline for paying tax bills from September 1st to December 31st 2021 was November 30th 2021. An extension was initially retrospectively granted for 60 days, but has now been further extended to up to 180 days.
The new tax deadlines you need to know for 2022. Photo: Nick Morrison on Unsplash
Looking ahead, the Italian tax year is the same as the calendar year, running from January 1st to December 31st. For the 2022 tax season, the tax return regards income and expenses incurred during 2021.
You must file your tax form online via the dedicated website of Italy’s tax office (Agenzia delle Entrate). An accountant can do this for you if you’d prefer a professional to take care of it.
You’ll need some form of electronic ID credentials such as your SPID or CIE.
For a calendar of all the tax deadlines by month, see Italy's tax office schedule here.
Which Italian tax form should I use?
There are two different tax forms – one is known as the 730 and the other is the ‘Redditi PF‘ (revenue) and which one you use depends on the type of income.
Everyone can file taxes using the latter within the final 30th November deadline.
The more simplified 730 form can only be used by those employed by a company (and therefore not self-employed) – it’s generally processed faster but has an earlier deadline of 30th September.
READ ALSO:
- How to use your Italian ID card to access official services online
- What is a SPID and how do you get one?
- What taxes do you need to pay if you own a second home in Italy?
Employees and retirees who have income from work, a pension and other sources may submit form 730. Spouses may submit form 730 jointly, according to Italy's tax office guidelines.
Anyone else and taxpayers who are not resident in Italy for tax purposes during the tax year and/or during the year of filing of the tax return must submit the Redditi PF form.
This tax form is split into sections, based on the type of income earned, including a part to declare foreign assets, which would incur a type of tax called ‘wealth tax’.
Remember to check you're using the correct forms and submit by the relevant deadline. Photo: Van Tay Media on Unsplash
If you have any assets or income that can’t be included in the shorter 730 form, you must complete the Redditi to adhere to Italy’s income reporting requirements.
For more advice on these forms, Italy's Inland Revenue has published instructions in English here.
What taxes can I expect to pay?
You'll need to pay three main types of taxes on income in Italy.
Everyone is subject to personal income tax (Irpef), which starts at 23 percent of earnings for the lowest income bracket and rises cumulatively to 43 percent as a wage increases.
Italy recently approved a drop to its income tax bands from five to four and reduced tax rates for those on lower incomes.
Now, you'll pay 23 percent tax on earnings up to €15,000 (as before), while for salaries of between €15,000 and €28,000, the tax will be reduced from 27 percent to 25 percent.
For salaries between €28,000 and €50,000, the applicable tax rate will be 35 percent.
The 41 percent tax band for earnings between €55,000 and €75,000 will be abolished altogether, with all income over €50,000 now set to be taxed at the top rate of 43 percent.
READ ALSO: Working remotely from Italy: What are the rules for foreigners?
There are also regional taxes which vary from under 1 percent to over 3 percent and you’ll also need to pay municipal income tax rates, which varies according to where your fiscal residence is.
Social security contributions (INPS) will also make up a sizeable part of your tax bill.
For this year, employees with incomes up to €35,000 per year (or up to €2,692 gross per month) will get a 0.8 percent discount for the pay periods from January 1st to December 31st 2022.
Self-employed workers face higher social security contributions than employees (who pay around 9 percent and the rest is paid by the employer), at around 25 – 29 percent of gross income.
However, if you are eligible for Italy’s flat tax rate or ‘regime forfettario’ for new freelancers, you could pay much lower income tax rates of between five and 15 percent. Find out more about this here.
What happens if I miss the deadline?
The best approach to Italian tax deadlines is obviously not to miss them, as there are fines and sanctions in place for those who do.
You may be required to pay between €250 to over €1000 for not filing taxes on time. If you end up in a tax liability, you could be issued with a further fine ranging from 120 percent to 240 percent of each tax liability.
There are further penalties if you have foreign assets and were late with your tax return.
You will face a fine of between 3 and 15 percent of the asset value - double it if your asset is held in a black-listed country or jurisdiction, such as the Cayman islands, Oman or the Seychelles.
Do your sums to avoid fines. Photo by Towfiqu barbhuiya on Unsplash
Tax breaks for new residents to Italy
If you move to Italy and make it your primary residence, you could be eligible for some considerable tax breaks.
There’s a discount on taxes for new residents for a period of up to five years. To be eligible, you need to be either employed or self-employed in Italy and not have had residence in Italy in the previous two years.
READ ALSO:
- How new freelancers in Italy can slash their tax bills to as little as five percent
- EXPLAINED: How to get an Italian work visa
The potential savings are substantial as you can take advantage of a 70 percent tax exemption on your income. Therefore, only 30 percent of what you earn is taxable.
And it's even more attractive if you move to the south of Italy, with the exemption increased to 90 percent.
When do self-employed workers pay their taxes?
Self-employed workers are subject to the same income tax brackets as the employed, but - aside from having to file their own taxes - they can pay them slightly differently.
Compared to those employed by a company who pay income tax at source, the self-employed can pay their taxes in June or spread them out over six months in instalments.
READ ALSO:
- ‘Smart working’? Here’s what you need to know about going self-employed in Italy
- Freelance or employee: Which is the best way to work in Italy?
June 30th is the first deadline for paying their income tax and November 30th is the second and final one.
If you pay VAT (IVA), you'll need to pay the VAT balance for the year 2021 by March 16th 2022.
What about income earned from outside Italy?
It's best to check any double taxation treaties in place between Italy and the country you’re generating income from.
Regardless of where income is generated, however, you can deduct any extra tax paid abroad from the limits set in Italy.
If the tax paid is higher in the other country, you don’t have to pay anything in Italy. If it’s the contrary, you’ll have to pay the difference in accordance with Italy’s tax rates.
Even if the balance shows you don’t have to pay any extra taxes to Italy, you still have to file a tax return and disclose your foreign income.
Are there any tax deductible items I can claim for?
In Italy, you may be able to claim back the cost of many different expenses to offset against your income tax: from medical bills to kindergarten fees and various building and renovation bonuses.
This means you'll need to keep any receipts related to these expenses somewhere safe until it comes to the time to submit your tax return.
As well as everyday expenses, the Italian government is currently offering dozens of tax incentives in the form of 'bonuses', some which can be claimed as a reduction in your tax bill, or as a discount at the time of purchase. See a list of the current tax bonuses available here.
You may not be able to claim back expenses in some circumstances, for example if you're on the flat tax rate. Speak to a professional to find out more about what you can deduct.
For further information and guidance, contact your accountant (commercialista) or your local Italian tax office (Agenzia delle Entrate).
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See Also
Who has to file a tax return in Italy in 2022?
Whether you are a resident or non-resident in Italy, you'll need to file taxes in Italy.
That is unless you either receive employment income from a single employer in Italy, make an income taxed at source (such as money gained from dividends), earn an income of €8,000 or less from employment, or receive a retirement income of €7,500 or less. In these cases, you are not required to fill out a tax return.
For everyone who does need to file taxes, the rules differ slightly depending on your circumstances.
Those who are resident in Italy - which includes people who live in Italy more than 183 days per year, making it their primary residence – are taxed on worldwide income.
READ ALSO: What’s the difference between Italian residency and citizenship?
This is true regardless of where the income is generated from and you must take your earnings from everywhere into account. Therefore, if your primary residence is in Italy and you make money from the US, Canada or the UK for instance, you must pay taxes on that income to Italy.
Your citizenship doesn't change this requirement.
Non-residents on the other hand, such as those who have a second home in Italy, only pay taxes on income made in Italy.
If you are a second-home owner in Italy however there are taxes you need to pay on the property. See here for details.
When are the deadlines for filing this year?
The final deadline for filing taxes is November 30th 2022, but there are other instalments to be aware of, depending on your personal circumstances.
Some tax deadlines were extended under reforms made under Italy's Fiscal Decree for 2022, with a view to aiding economic recovery following the impacts of the pandemic.
Originally, the deadline for paying tax bills from September 1st to December 31st 2021 was November 30th 2021. An extension was initially retrospectively granted for 60 days, but has now been further extended to up to 180 days.
Looking ahead, the Italian tax year is the same as the calendar year, running from January 1st to December 31st. For the 2022 tax season, the tax return regards income and expenses incurred during 2021.
You must file your tax form online via the dedicated website of Italy’s tax office (Agenzia delle Entrate). An accountant can do this for you if you’d prefer a professional to take care of it.
You’ll need some form of electronic ID credentials such as your SPID or CIE.
For a calendar of all the tax deadlines by month, see Italy's tax office schedule here.
Which Italian tax form should I use?
There are two different tax forms – one is known as the 730 and the other is the ‘Redditi PF‘ (revenue) and which one you use depends on the type of income.
Everyone can file taxes using the latter within the final 30th November deadline.
The more simplified 730 form can only be used by those employed by a company (and therefore not self-employed) – it’s generally processed faster but has an earlier deadline of 30th September.
READ ALSO:
- How to use your Italian ID card to access official services online
- What is a SPID and how do you get one?
- What taxes do you need to pay if you own a second home in Italy?
Employees and retirees who have income from work, a pension and other sources may submit form 730. Spouses may submit form 730 jointly, according to Italy's tax office guidelines.
Anyone else and taxpayers who are not resident in Italy for tax purposes during the tax year and/or during the year of filing of the tax return must submit the Redditi PF form.
This tax form is split into sections, based on the type of income earned, including a part to declare foreign assets, which would incur a type of tax called ‘wealth tax’.
If you have any assets or income that can’t be included in the shorter 730 form, you must complete the Redditi to adhere to Italy’s income reporting requirements.
For more advice on these forms, Italy's Inland Revenue has published instructions in English here.
What taxes can I expect to pay?
You'll need to pay three main types of taxes on income in Italy.
Everyone is subject to personal income tax (Irpef), which starts at 23 percent of earnings for the lowest income bracket and rises cumulatively to 43 percent as a wage increases.
Italy recently approved a drop to its income tax bands from five to four and reduced tax rates for those on lower incomes.
Now, you'll pay 23 percent tax on earnings up to €15,000 (as before), while for salaries of between €15,000 and €28,000, the tax will be reduced from 27 percent to 25 percent.
For salaries between €28,000 and €50,000, the applicable tax rate will be 35 percent.
The 41 percent tax band for earnings between €55,000 and €75,000 will be abolished altogether, with all income over €50,000 now set to be taxed at the top rate of 43 percent.
READ ALSO: Working remotely from Italy: What are the rules for foreigners?
There are also regional taxes which vary from under 1 percent to over 3 percent and you’ll also need to pay municipal income tax rates, which varies according to where your fiscal residence is.
Social security contributions (INPS) will also make up a sizeable part of your tax bill.
For this year, employees with incomes up to €35,000 per year (or up to €2,692 gross per month) will get a 0.8 percent discount for the pay periods from January 1st to December 31st 2022.
Self-employed workers face higher social security contributions than employees (who pay around 9 percent and the rest is paid by the employer), at around 25 – 29 percent of gross income.
However, if you are eligible for Italy’s flat tax rate or ‘regime forfettario’ for new freelancers, you could pay much lower income tax rates of between five and 15 percent. Find out more about this here.
What happens if I miss the deadline?
The best approach to Italian tax deadlines is obviously not to miss them, as there are fines and sanctions in place for those who do.
You may be required to pay between €250 to over €1000 for not filing taxes on time. If you end up in a tax liability, you could be issued with a further fine ranging from 120 percent to 240 percent of each tax liability.
There are further penalties if you have foreign assets and were late with your tax return.
You will face a fine of between 3 and 15 percent of the asset value - double it if your asset is held in a black-listed country or jurisdiction, such as the Cayman islands, Oman or the Seychelles.
Tax breaks for new residents to Italy
If you move to Italy and make it your primary residence, you could be eligible for some considerable tax breaks.
There’s a discount on taxes for new residents for a period of up to five years. To be eligible, you need to be either employed or self-employed in Italy and not have had residence in Italy in the previous two years.
READ ALSO:
- How new freelancers in Italy can slash their tax bills to as little as five percent
- EXPLAINED: How to get an Italian work visa
The potential savings are substantial as you can take advantage of a 70 percent tax exemption on your income. Therefore, only 30 percent of what you earn is taxable.
And it's even more attractive if you move to the south of Italy, with the exemption increased to 90 percent.
When do self-employed workers pay their taxes?
Self-employed workers are subject to the same income tax brackets as the employed, but - aside from having to file their own taxes - they can pay them slightly differently.
Compared to those employed by a company who pay income tax at source, the self-employed can pay their taxes in June or spread them out over six months in instalments.
READ ALSO:
- ‘Smart working’? Here’s what you need to know about going self-employed in Italy
- Freelance or employee: Which is the best way to work in Italy?
June 30th is the first deadline for paying their income tax and November 30th is the second and final one.
If you pay VAT (IVA), you'll need to pay the VAT balance for the year 2021 by March 16th 2022.
What about income earned from outside Italy?
It's best to check any double taxation treaties in place between Italy and the country you’re generating income from.
Regardless of where income is generated, however, you can deduct any extra tax paid abroad from the limits set in Italy.
If the tax paid is higher in the other country, you don’t have to pay anything in Italy. If it’s the contrary, you’ll have to pay the difference in accordance with Italy’s tax rates.
Even if the balance shows you don’t have to pay any extra taxes to Italy, you still have to file a tax return and disclose your foreign income.
Are there any tax deductible items I can claim for?
In Italy, you may be able to claim back the cost of many different expenses to offset against your income tax: from medical bills to kindergarten fees and various building and renovation bonuses.
This means you'll need to keep any receipts related to these expenses somewhere safe until it comes to the time to submit your tax return.
As well as everyday expenses, the Italian government is currently offering dozens of tax incentives in the form of 'bonuses', some which can be claimed as a reduction in your tax bill, or as a discount at the time of purchase. See a list of the current tax bonuses available here.
You may not be able to claim back expenses in some circumstances, for example if you're on the flat tax rate. Speak to a professional to find out more about what you can deduct.
For further information and guidance, contact your accountant (commercialista) or your local Italian tax office (Agenzia delle Entrate).
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