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Taxation in Italy

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Taxation in Italy

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Taxation in Italy

Income Tax

The new rates for personal income tax are listed below.

Taxation of an individual's income in Italy is progressive; the higher the income, the higher the rate of tax payable.

An individual is liable for tax on his income as an employee and as a self-employed person. Tax will be payable on income earned in and overseas by an individual who meets the test of a permanent citizen of . A foreign resident who is employed in pays tax only on income earned in .

One of two tests must be passed to be considered an Italian resident: a life centred in Italy, or being registered in the Population Registry as living more than 183-days-a-year there. It is essential to point out, in regards to taxable income from outside , that a 'tax credit' is granted for tax deducted outside. In the case of income from a salary, the employer is obligated to deduct the amount of tax payable on a monthly basis. A self-employed person must pre-pay income tax that will be offset on the filing of an annual return. The advance payment is decided on the basis of the return made for the previous year. In the event of a new business, the advance will be calculated on the basis of estimates made by you, or the head of the company.

 

Up to 15,000 23%
15,001 – 28,000 27%
28,001 – 55,000 38%
55,001 – 75,000 41%
Over 75,000 43%

Corporate Tax

The corporate tax rate in Italy is 24%.

VAT

VAT is invariably 21%. There are reduced rates of VAT of 4% and 10% on basic products. VAT is charged on assets and services in Italy as well as on imports into Italy. VAT returns are made monthly. In certain cases, it is possible to make a return once a quarter. An annual VAT return must be filed once every year on March 15th.

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