Figuring out the tax system in Italy can be daunting. Find out what taxes you need to pay in Italy as an expat and when to file them.
If you’ve moved to Italy and are planning to earn an income, no matter how small, you’ll need to pay taxes in Italy on your worldwide income and assets. Fortunately, there’re some great tax incentives for expats who’re about to move to Italy.
Through this article, we will help you navigate the Italian tax system by getting you up to speed about the income tax rates, available tax credits, and how to pay your taxes in Italy.
Yes, you’ve to pay taxes if you earn an income or own assets in Italy. Italian tax residents are taxed on the income from their activities in Italy and abroad, whereas non-resident taxpayers only need to pay tax on their Italian income.
You’re considered a tax resident in Italy if you meet any of the following criteria for more than 183 days per year:
You don’t have to be living in Italy to be considered a resident taxpayer. Simply having economic or social interests in Italy for more than 183 days makes you a resident taxpayer.
Italy taxes citizens living abroad if they’ve got an income source in Italy. In this case, you’ll be considered a non-resident taxpayer if you meet any of the following criteria:
If you live in Italy for less than 183 days in a calendar year and you don’t earn any income in Italy, such as from pension, rent, interests, etc., you won’t need to pay tax in Italy.
There’re 3 types of personal income taxes that you’ll have to pay in Italy regardless of tax resident status:
The National Income Tax (NIT) is calculated on the basis of a progressive tax rate that applies to both residents and non-residents.
Taxable Income | Income Tax Rate in Italy for 2024 |
---|---|
0 – €28,000 | 23% |
€28,001 – €55,000 | 35% |
Above €55,001 | 43% |
For example, if you earn €35,000 a year, you'll pay 23% for the first €28,000. On the remaining €7,000, you'll pay 35% tax.
The regional income tax ranges from 1.23% to 3.33% depending on the region you’re reregistered in. It’s the same for resident and non-resident taxpayers.
The municipal income tax in Italy varies based on the municipality you’re registered in. The tax amounts range from 0% to 0.8% and are identical for both resident and non-resident taxpayers in Italy.
You'll need to file your tax return by 30 September of the following year if you're a resident tax payer in Italy. For example, if you want to file taxes for the financial year 2023, you would need to do it by 30th September 2024.
If you're self-employed, you'll need to make estimated payments throughout the year, with a final balancing payment due by 15 October of the following year.
For non-resident tax payers, the deadline is 15 October or by 30 November of the following year, if filing via registered post.
Once you've applied for your Italian tax identification number, also known as Codice Fiscale, you can file your taxes online.
Are you a non-resident or need a Codice Fiscale before your arrival? You can request one at the local Italian embassy.
If you're employed in Italy, your employer will deduct taxes and social security contributions from your salary each month and pay them directly to the relevant authorities.
All you need to do is file your tax return with the Modello 730. Retirees can also use this form and spouses can submit this form jointly.
Luckily, filing taxes in Italy is easy as the form is pre-filled by the Agenzia delle Entrate, including any deductions you're eligible for. You can access the pre-completed form by logging in via SPID, CIE, or CNS. After that, follow the steps online to view, edit, or submit the tax return.
Don’t forget that you need to file taxes even if you’ve not earned any income as Italy has no tax-free amounts.
As a self-employed taxpayer, you’ll have to file the Modello Redditi PF form by the October 15 of the year following the tax year.
To file your taxes, you’ll need to have both a Codice Fiscale and a VAT number for your company.
Here’re the steps to paying tax as a freelancer in Italy:
The Italian government offers various types of concessions on tax. Some of the most common tax deductions are:
To take advantage of tax breaks for having dependents, there're some requirements. You'll need to be based in Italy and pay tax for at least 2 years, with an employment contract lasting at least another 6 months. You'll also need to have Italian or European citizenship or residence.
In 2024, the maximum annual tax credit for dependents in Italy are: €800 for spouse, €750 for other dependents or €950 for children over the age of 21.
There's a monthly allowance available for parents with children below the age of 21 provided the child is:
The amount received for the allowance depends on how many children you’ve below the age of 21, and your financial status. The amount you may receive will be:
Number of Children | Range of the allowance |
---|---|
1 | €54.10 - €189.20 |
2 | €108.20 - €378.40 |
3 | €178.50 - €659.50 |
4+ | €398.80 - €1,090.60 |
There're some additional allowances given to young parents and parents of disabled children.
You might be able to get a tax credit on your rental fees depending on your age, income level and employment status. The amount you receive will depend on the rent you pay.
The maximum tax credits for rental fees are outlined below;
Type of Tenant | Maximum tax credit per year |
---|---|
Annual income less than €15,493.71 | €300 |
Annual income is between €15,493.71 and €30,987.41 | €150 |
Young tenants (20-30 years-old) with annual income less than €15,493.71 ^ | 20% of the rental cost, not exceeding €2,000 |
Seconded workers ^^ with annual income less than €15,493.71 | €991.60 |
Seconded workers ^^ with annual income between €15,493.71 and €30,987.41 | €495.80 |
^ This is only applicable for the first 4 years of the rental contract.
^^ A seconded worker is someone who is coming back to Italy under new employment conditions that is substantially different from their current employment.
The tax credit for medical expenses is 19% of the amount you’ve paid above €129.11 throughout the fiscal year. You'll need to provide receipts for these expenses.
You can request tax credits for any expenses charged by educational institutions.
Level of Education | Annual amount |
---|---|
Public university fees | Full tuition fees |
Nursery, elementary, secondary and high school fees | 19% of the fees, up to €800 per child |
School registration fees for children up to 3 years old | 19% of the fees, up to €632 |
One of the tax breaks for residents in Italy includes the temporary tax relief scheme for new or returning workers in Italy.
Employed and self-employed workers moving to Italy during the 2024 tax year and earning less than €600,000 a year will be taxed on 50% of their income. Those with a minor child will be taxed on 40% of their income. This temporary tax relief applies from the tax year the residence was moved to Italy and the next 4 subsequent tax years.
Conditions required to meet this __temporary tax benefit include:
There's also a tax benefit for new residents moving to Italy. This is specifically geared towards high-net individuals who have not been a tax resident in Italy for the last 9 years before moving to Italy.
Since Italian tax residents are taxed on their worldwide income, it’s certainly handy that Italy has dual tax arrangements with most of the countries in the world. This way, you won’t be double taxed.
Here’re the countries that have such an agreement with Italy:
Italy’s tax system uses many Italian terms. This is not very expat-friendly as you may not be fluent in Italian. So here’re the most important Italian tax related terms and their meaning:
This article is for informational purposes only.
Please reach out to content @housinganywhere.com if you have any suggestions or questions about the content on this page. For legal advice or help with specific situations, we recommend you contact the appropriate authorities.
In this article
Do I need to pay taxes in Italy as an expat?
Italy income tax
When to pay taxes in Italy
How do you file taxes in Italy?
Is there a way to reduce your personal income tax liabilities in Italy?
Tax breaks for new tax residents in Italy
Does Italy have dual tax arrangements?
Important tax terms in Italian
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