Ok., so we finally are finished our consultation with an Italian Accountant. To be honest we didn’t learn anything that we couldn’t find on the internet already, but what’s very important we were able to confirm the information we found and discuss it in more detail. So, below you can find what we found so far. I think is quite complete guide for buying a House in Italy.
At the end of the post I will also write few words about the costs of living in Italy.
Purchase guide and Ownership taxes
During the research I found amazing purchase property guide made by Studio Legale Metta for 2018. It is in english (not so common when it comes to Italian companies) and is written in a simple and easy to understand language.
You can find there all you need to know about the proces of purchasing a property in Italy and about the taxes and fees related with this process. You can also find there information about ownership taxes and fees.
You can download full guide here.
Because we want to move to Italy with our businesses we are curently building here in Poland we wanted to know how the tax system looks like in Italy when it comes to self-employment.
Below you can find information we gathered (remember that it is March 2020 and this numbers may change in time):
VAT is 22%.
The Income Tax
Income tax in Italy is progressive and has the following thresholds:
|€ 0 to € 15,000||23%|
|€ 15,001 to € 28,000||27%|
|€ 28,001 to € 55,000||38%|
|€ 55,001 to € 75,000||41%|
|Over € 75,000||43%|
The INPS (social security)
This is quite a big tax, so be aware and remember that this one will consume a lot of your income.
Standard equasion for INPS is: (Total Income – deductible costs)*27-28 %
But INPS has an annual minimum contribution of about 3 500 EU (for partner in marriage company) and 3 800 EU one person company. So minimum of 7 000 EU for 2 people company (marriage type).
Of course, the exact numbers depend on the amount of work the accountant will have to do, which is related to the number of documents and invoices you will produce monthly. But we can assume that the costs would be between 2 500 – 3 000 EU annually.
Abroad income, properties and assets
If you own a house or other property you will have to pay 0,76% on the market value annually.
If you have financial assets including bank account you will have to pay 0,2% with a minimum of 34 euros for each current account.
If you have income including rentals or interests from financial assets or any income, you will have to pay taxes on it at the regular tax rate (progressive from 23% to 43%) but you may be able to deduct from the amount payable the taxes you have paid already in you country. It depends on whether specific income abroad is regulated by a double taxation agreement.
In some cases you can take advantage of the preferential taxes that the Italian government has prepared as an incentive to attract human capital to Italy. You can download this guide below:
Local differences in taxes
Please note that in Italy each region and often each municipality or even city or village may have their very own rules and taxes. So, it is crucial to check this before you decide to buy a property. With that issue I would recommend you to contact Italian accountant.
This issue is very crucial for us. It’s because we live in Poland and here, we have Polish Zloty (PLN), which is more that 4 times weaker currency than Euro (1 Euro = 4,25 PLN). We have to calcutale everything very carefully, so when we take our businesses to Italy they will withstand currency change and much higher taxes.
I will certainly write a dedicated post about the cost of living, but for now I can say that we have estimated that we need around 4,000 EU per month.