Frequently Asked Questions About Italian Taxation for Foreigners

As Italian accountants in the UK we are asked questions by people who are a bit baffled by the Italian tax system. Here a few of the most common questions and Antonio’s answers.

Q.

I have a property in Italy and would like to rent it out for holiday lets. Do I have to pay tax on this income?

A.

Yes, the income from renting a property in Italy is taxed in Italy. You need to make an Italian tax return and declare these amounts.

Q.

What other complications are there in renting out my Italian property?

A.

Rental periods of longer than 30 days need to be registered with the Italian tax office. You need to pay stamp duty on the contract (which will need, where necessary, to be translated into Italian) and a registration tax of 2% of the rental. You also need to take details of the person renting your property and inform the local police.

Q.

Do I need to register for VAT or get a licence?

A.

If you carry on this rental business professionally, you need to apply for an IVA (VAT) number and make quarterly IVA returns. You also almost certainly have to get a licence from your local Comune. There are a number of factors involved in deciding what constitutes a professional business and each case needs to be considered on its merits. This is where an Italian accountant can help.

Q.

What is ICI and when do I pay it?

A.

ICI is a local property tax and stands for the Imposta Comunale sugli Immobili. It is due on Italian properties owned by non-residents and you pay it in June and December each year to the local Comune. The amount payable is based on the cadastral value of the property and differs from Comune to Comune. Your accountant can calculate the amount you owe and even organise the payment for you.

Q.

Do I need a Codice Fiscale?

A.

A codice fiscale is your own personal tax code. You need one for day-to-day tasks such as opening a bank account, buying a property, connecting utilities etc. You can apply for one at any Italian tax office or ask your commercialista (Italian accountant) to do it for you.