All posts by Judith Ruddock

By 9th November 2018

Good news in the current Finance Act (legge finanziaria) for those on the Forfettario scheme. This is the simplified scheme for small businesses which offers a discounted flat rate of tax, which historically has been 15%, or 5% for genuine start-ups. One of the criteria for qualifying for the scheme is that the business has a limited turnover: to date, the limit has depended on the type of business. Businesses classed as professional  –  English teaching, say or website design – would have a turnover limit of €30k, while an activity offering accommodation would be restricted to a turnover of no more than €50k. Unnecessarily complicated, we all thought, and for once the powers that be are in agreement. As of next year, the proposal is that the limit of turnover be raised to €65000 for all activities. For those already on the scheme, it is not yet clear whether the new turnover limit will also apply to 2018 earnings: we await clarification from the Agenzia. If so, it could be a busy couple of months in the run up to Christmas!


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By 9th October 2017

A bulletin from the front line of short term tourist rental contracts. Keen readers will recall the new law introduced earlier this year, requiring agents and intermediaries to deduct 21% from rental sums received in relation to short-term bookings of properties in Italy. The sums were to be paid directly to the Agenzia as a payment on account of the tax due from the owner – where the owner used the cedolare secca system the early payment would represent all the tax due; where the income was to be taxed under the marginal rates there would be a difference to be settled. As reported, Airbnb was not impressed by the idea of being required to act as unpaid tax collector on behalf of the Italian State and launched two major actions: the first was an appeal to the regional tax tribunal (TAR). More recently they have also launched an action on the basis of Anti Trust, claiming that the law is anti-competitive. Both actions refer to the law as a violation of the right to provide services and claim that  Airbnb is unfairly penalised in comparison to other sector operators. This last on the basis that Airbnb’s biggest rival, Booking. com, is unaffected as they do not collect monies on behalf of the owners. Both decisions are expected on 15th October, the day before the first round of the 21% tax withholdings is due: we will keep you informed.


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By 6th October 2017

Tucked away in the corners of last year’s budget lies a very generous incentive to incoming workers. It comes in the form of an extension to a scheme which originally aimed to encourage graduates to live and work in Italy. The scheme was then broadened to cover anyone working in specialist or highly qualified positions and finally has now been extended to cover any persons coming to work in Italy, including those registering as self-employed. Under the scheme, qualifying workers are granted a 50% reduction in their chargeable income. Further, where INPS (social security) is calculated on the basis of chargeable income this will also effectively be reduced by 50%. – not a bad offer in a high-tax environment. The incentives last for a period of 5 years. The qualifying requirements are that the worker is registered as resident in the local Comune, and that the work they do is carried out principally in Italy. Workers are expected to remain resident for a minimum of 2 years. The taxman is entitled to recover the value of the underpaid tax if you move away before the end of the two-year period. You need to be quick, though – if you want to qualify you have to show that you started work, whether as employed or self-employed, within 3 months of making your permanent move to Italy. If you want more details of this, or any of the other anti brain-drain schemes, please contact us.


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By 28th July 2017

The consequences of the new law on tourist rentals (D.L. 50/2017) are still far from clear…but help is at hand. One of the many problems of operating in this field has been the lack of guidance as to what makes an activity a business (which requires registration for IVA) and what counts as a non-business activity. In the absence of clear legislation on the point, professionals and clients have been left making a “best guess” at what a non-business rental might look like. This has included consideration of various factors such as overall turnover, number of guests, length of season, services offered, method of marketing etc. In the past a definitive finding has only emerged when the Agenzia has investigated and reached its own conclusions – a little late for those hoping for clarity beforehand. Now, we are told, the cavalry is on its way. It comes (or will come) in the form of a ministerial regulation to be issued by 19th September 2017. We are told the regulation will set out the criteria on the basis of which a tourist rental activity would be presumed to be exercised as a business. With the hope, of course, that by avoiding these criteria, the rest of us can sleep more easily, secure in the knowledge that the rental activity we run does not require registration for IVA. We await the publication of the regulation and will report back.  


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By 12th May 2017

Further updates about the important changes to the treatment of rental income in Italy mentioned below – the new Airbnb law. Recent legislation (D.L. 50/2017) introduces new rules on tourist rentals, which are defined as those of under 30 days. As of 1st June 2017 there will be an option to have the gross rental income taxed at a fixed rate of 21% under what is known as the “cedolare secca”. No costs are allowed against this income. We should make clear that for those who rent out their property directly, without using online portals or other intermediaries, this is only an option, so there is nothing to prevent you continuing to declare the rentals as you have to date.


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By 3rd May 2017

Once again a lightning move by the Italian government, this time in the field of short-term tourist rentals. The new Draft Law 50/2017 was published in the Official Gazette on 24th April and came into effect the following day. Its proposals are revolutionary: income from all short-term tourist rentals (defined as stays of under 30 days), whether organised directly or through agencies, AirBnB or similar online portals is to be taxed at a flat rate of 21% through the scheme known as cedolare secca.


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By 26th April 2017

Do you rent your house in Italy? There may be some good news for you. For some time there have been incentives available in the form of tax breaks for those renting under certain types of rental contracts, but these were mainly for long-term contracts which had been approved by the tenants’ and landlords’ unions – of limited application to the majority of renters. However deductions are also available for those on lower incomes who are renting their main residence: for those with incomes of less than around €15k, the tax deduction amounts to €495.80, while for those with incomes below €31k, the deduction available is €247.90.


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By 24th March 2017

News comes of an Agenzia request to the Comuni to forward details of all Italian ex-pats who have renounced their residency since 2010 and moved abroad. The Agenzia is keen to establish that despite withdrawing their name from the Anagrafe these persons will still prove to be tax resident in Italy, thus allowing the Agenzia to claim tax from them. Possibly not of immediate interest to non-Italian ex-pats living in Italy, but an indicator that the Agenzia continues to raise its game.


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By 24th March 2017

Alarming news for those paying casual workers under the voucher scheme. For those of you who aren’t aware, the voucher scheme was introduced in 2003 as a less complicated method for paying casual workers. This was invaluable for those running small rental businesses and needing help with cleaning, welcome, gardening etc. However, as seems so often to happen in Italy, the system has been roundly abused –  in the south a furniture-making factory was discovered where the entire workforce were apparently working under the voucher scheme(!)


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By 15th February 2017

Calling all those owning property in Italy. Have you heard about IMU? This year it replaced the ICI council tax. And the bad news is that while most property owners were exempt from ICI on their first house (prima casa), IMU applies to all properties, prima casa or not. Which means that if you have property in Italy, you need to be paying IMU.


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