If you are resident in Italy do you need to submit a tax return? Many ex-pats resident in Italy often thinks that they do not need to register with the tax authorities or to submit annual tax returns. In many cases, they are mistaken and run the risk of having to pay heavy fines and interest on unpaid tax. Even if you are an employee and your employer deducts tax from your salary you may still need to submit a return if you have other income. Dottore Raffaele Marino, Studio di Consulenza Marino, outlines the types of income that may need to be declared below.
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|
Type of income |
(Total) Income limit |
Conditions under which income does not have to be declared |
|
Land and/or buildings (including main dwelling and its relevance |
500 € |
|
|
Dependent or similar work + other types of income (*) |
8.000 |
|
|
Pension + other types of income (*) |
8.000 |
|
|
Pension + land + main dwelling and its relevance |
7,500(pension) 185.92 (land) |
|
|
Pension + other types of income (*) |
8.000 |
Pension period not less than 365 days. Deductions for spouses and dependent family members are allowed and no additional regional and municipal taxes are not due. If tax has been withheld by, or paid to, a foreign tax authority, the taxpayer can offset the tax credit, up to the maximum of the tax due on the same income in Italy, by submitting the declaration. |
|
Periodic allowance paid by spouse + other types of income |
8.000 |
|
|
Income treated in the same way as compensation of employees and other income for which the expected deduction is not related to the period of employment |
4.800 |
|
|
Compensation from amateur sports activities |
30.658,28 |
|
| (*) The total income must be calculated without taking into account the income from the main dwelling. | ||
- Tax penalties
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Tax penalties are defined by Legislative Decree 471/1997
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In the event that no taxes are due, the penalty for failure to make a declaration ranges from € 250.00 to € 1,000.00
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If the declaration is submitted within the deadline for submitting the declaration relating to the following tax period, provided that no investigations have taken place, the applicable penalty is from € 150.00 to €500.00;
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In the event that taxes are due, the penalty ranges from 120 to 240 per cent of the taxes due, with a minimum of 250€
Through the institute of active repentance, it is possible, in case of submission of the declaration after the deadline, provided that no control and verification activities have begun, that reduced penalties may be applied. The reduction of the penalty is proportional to the speed of repentance. So the longer it takes since the submission of the omitted declaration expires, the lower the discounts in terms of applicable penalties.
The penalties applicable may be reduced:
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1/9 of the minimum if regularisation takes place within 90 days of the deadline for the submission of the declaration;
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1/8 of the minimum, if the regularisation takes place within the deadline for the submission of the declaration of the year in which the infringement was committed;
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1/7 of the minimum, if the regularisation takes place within the time limit of the submission of the declaration relating to the year following the year in which the declaration was omitted;
-
1/6 of the minimum if the regularisation takes place beyond the deadline for the submission of the declaration relating to the year following that in which the infringement of the declaration was committed;
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1/5 of the minimum, if the regularization takes place after the terms indicated above.
In tax matters we can distinguish two types of obligations:
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Formal: concerning the declaration: this must be submitted even if you do not have a tax debt;
-
Substantial: concerning the payment of taxes;
Therefore: the fact that there is no tax debt does not mean that the declaration should not be submitted;
In addition, the declaration should be submitted whenever there are potentially income-productive activities abroad, through the completion of the RW section of the tax declaration. The RW section should also be presented if you do not have income in Italy, as it has an independent value compared to the Italian tax return.
The consulting firm Marino provides specialized advice on international taxation. To learn more about the services offered by the Marine Consulting Firm you can:
visit www.consulenzamarino.it Send an email to marino@consulenzamarino.it
If you are in receipt of pension income you may be entitled to a tax credit deduction depending on your total income. Any tax credit due is calculated automatically and deducted from the tax payment when you complete the Italian tax return. There are a number of online calculators that can help you work out what that tax credit may be. This is just one of them https://www.dossier.net/irpef/detrazioni-pensione.htm