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Italian Tax Overview

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It is extremely important that you get your tax and other financial affairs in order before you move to Italy (again with the advice of a commercialista/tax advisor). You may find that going offshore with your bank accounts or mortgages yields huge benefits, and moving to a foreign country and assuming expat status could be the perfect time to do this. With the help of a professional you can put your financial affairs in order and discover the most beneficial way of paying tax. This may take time but could save you a lot of money in the long run.

Countries such as the UK and US have double taxation treaties with Italy to avoid the unfairness of you getting taxed in two countries on the same assets. UK residents should inform the Inspector of Taxes who will then send out a form for you to fill in (form P85). They will require proof that you are leaving UK jurisdiction before they remove your UK tax liabilities; evidence of having both sold a UK house and bought or rented Italian property should be adequate. If you are planning to work in Italy then the P45 form which you will have received from your last employer in the UK, along with proof of employment from an Italian employer should suffice. For Americans it is a different the rules are a little different. The IRS (American tax authorities) expects you to keep filing tax returns (and paying taxes) each year unless you elect to become a permanent resident of Italy. America, like Britain, has a double taxation arrangement with Italy.

There are numerous types of Italian taxation levied on a local, regional and national level from income tax and property tax to rubbish tax.

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